Overview of China's Economy

By Chong Loong Charles Chaw

The reform that started in late 1978 has turned China into the fastest growing major economy in the world. In 2008, China’s GDP grew 9.0% and reached RMB 30.1 trillion (US$4.4 trillion ). In the same year, China’s economy was the third-largest economy in the world, 20% larger than Germany’s. China is expected to replace Japan as the world’s second-largest economy in 2010.

• Language: English
• Publisher: Chong Loong Charles Chaw
• Release date: May 25, 2010
• ISBN: 9781311228246

Chong Loong Charles Chaw

Charles Chaw is the author of many business guidebooks and market research reports on China. His bestselling: “Manufacturing, Outsourcing and R&D in China” is the first rating guide on China’s industrial parks across the country. Began in 2000, he has researched, consulted and promoted China’s most established industrial parks. Today, his rating on hundreds of industrial parks set the benchmarks for the sector and made available in Bloomberg BMART, FactSet, Standard & Poor’s Capital IQ and Thomson Reuters Research Bank. Under his leadership, the company has published hundreds of research reports covering more than 40 industries on China for over a decade. Charles also appears regularly as guest speaker in numerous business channels with BBC Asia, CNBC, Bloomberg TV, Phoenix TV (Chinese), Channel News Asia, Russia TV 24 and Al Jazeera etc. Leveraging on his extensive knowledge and experience on China’s industrial parks development, he has produced a 5-episodes television documentary program titled: “Inside the World Largest Factory” in 2004, and another 6-episode: “Inside China Next Powerhouse” in 2007. Both programs were broadcast internationally in 4 languages. Charles had worked with Deutsche Morgan Grenfell’s investment banking unit and Cargill Financial Services Asia, the proprietary trading arm of Cargill Group prior founded China Knowledge.

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Overview of China’s Economy

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© China Knowledge Press Pte Ltd, 2010

China’s Economy at a Glance

The Rise of China

The reform that started in late 1978 has turned China into the fastest growing major economy in the world. In 2008, China’s GDP grew 9.0% and reached RMB 30.1 trillion (US$4.4 trillion). In the same year, China’s economy was the third-largest economy in the world, 20% larger than Germany’s. China is expected to replace Japan as the world’s second-largest economy in 2010.

Figure 2.1.1 World’s 10 Biggest Economies in 2008

Source: China Statistical Yearbook 2009

Figure 2.1.2 China’s GDP Growth (1978–2008)

Source: China Statistical Yearbook 2009

China’s GDP per capita exceeded US$1,000 for the first time in 2003. After a mere five-year period, China had more than tripled its GDP per capita to US$3,266 in 2008. Although this figure is still far behind those of developed countries, it represents a respectable achievement for a nation with a huge population, especially one where a majority of people lived below the poverty line three decades ago.

Industry and construction accounted for 48.6% of the total GDP in 2008, 0.1 percentage points more than in 2007; services accounted for 40.1%, 0.3 percentage points less; and agriculture accounted for 11.3%, 0.2 percentage points more.

Figure 2.1.3 China’s GDP Composition in 2008

Source: China Statistical Yearbook 2009

The Industrial and Service Sectors

Measured by the amount of industrial output, the smelting and pressing of ferrous metals has become China’s biggest industry. Rapid industrialization and urbanization have also shaped China into a big steelmaking country. Other important industries include the manufacturing of communications equipment, computers, raw chemical materials, chemical products, transportation equipment and electrical machinery and equipment. In contrast, textiles, China’s traditional strength, only ranked 10th in 2008.

Fueled by foreign investment and the development of local manufacturers, China has started to emerge as the world’s largest factory after over 30 years of reform. Both