Economic trends
In 2009, China went through an economic crisis that is unrivaled since the big reforms undertaken by Deng Xiaoping, thirty years ago. Direct foreign investments in China showed a drop of 22.5% over a period of a year. As for Chinese exports, they dropped on a yearly sliding scale by 22.6%.
After a 2 figure growth rate between 2000 and 2007 (13% in 2007), the GDP growth rate dropped to 9% in 2008 because of the global financial crisis, particularly felt during the last months of the year. Despite the decrease, the Chinese economy was carried by the size of its domestic market and its capacity to save (its banks are healthy and do not offer toxic products). China was affected by the global economic crisis on three levels:
- the drop in global demand caused the sudden decrease of Chinese exports (-21%), a drop felt particularly in exclusively exporting companies and mainly in the textile, toys and small household appliances fields;
- the reversal of the real estate market dealt a blow to the national economy (-20% in 2008); and lastly
- the government financial investments in the United States (Treasury bonds and American pension funds) laid the country open to the international financial crisis.
In order to maintain China's growth and ensure social stability, the government has implemented in late 2008 a broad stimulus plan of 460 billion euros, either 12% of Chinese GDP over two years, focusing on development of domestic demand to try to offset declining imports. Priorities for Beijing include infrastructure, modernization of industry, openness to new technologies, health, education and support for countryside.
Main branches of industry
China is the most populated country in the world and one of the largest producers and consumers of agricultural produce. In 2008, China was the leading global producer of cereals (15%), corn (20%), rice (30%) and cotton (25%). China also held 53% of the world pig livestock and agriculture contributed to 12.5% of the GDP. Approximately half the Chinese labor force is employed in agriculture, although only 15% of the Chinese soil (about 1.2 M km ²) is arable.
China has significant coal reserves (the country's primary energy source), which account for two-thirds of the total primary energy consumption. It is the world leader in the production of certain ores (phosphate and titanium) and hydroelectric energy. It is the sixth biggest oil producer in the world with 3.8 million barrels.
The industry and the construction sectors contribute approximately half of China's GDP. China has become one of the preferred destinations for the relocation of global manufacturing units because of a cheap labor market, even though the cost of labor has increased since 2008. The Government sector still contributes approximately 40% to the GDP. More than half of the Chinese exports are made by companies with foreign capital. Their share in the sector's added-value varies according to the sector: more than 60% for electronics and at less than 20% for the majority of producer goods. In sectors with considerable amounts of foreign share capital companies (higher than 40%), exports account for more than 90% of their production. Economic emergence coincided mainly with the development of an export orientated competitive manufacturing sector.
The services sector has not progressed, encumbered by public monopolies and restrictive regulations. The tertiary sector's share has remained at nearly a third of the GDP in the last 15 years.
International trade
After having achieved a record trade surplus in 2006, China has subsequently become the world's primary exporter. Chinese exports are constantly increasing, despite a decrease noted in 2009, due to the international financial crisis (-20%). Most of its exports consist of manufactured goods. China's main trade partners are South East Asia, the United States and the European Union.
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