Economic overview China, in 36 editions.

Beginning in late 1978 the Chinese leadership has been trying to move the economy from the sluggish Soviet-style centrally planned economy to a more productive and flexible economy with market elements--but still within the framework of monolithic Communist control. To this end the authorities have switched to a system of household responsibility in agriculture in place of the old collectivization, increased the authority of local officials and plant managers in industry, permitted a wide variety of small-scale enterprise in services and light manufacturing, and opened the foreign economic sector to increased trade and joint ventures. The most gratifying result has been a strong spurt in production, particularly in agriculture in the early 1980s. Otherwise, the leadership has often experienced in its hybrid system the worst results of socialism (bureaucracy, lassitude, corruption) and of capitalism (windfall gains and stepped-up inflation). Beijing thus has periodically backtracked, retightening central controls at intervals and thereby undermining the credibility of the reform process. Open inflation and excess demand continue to plague the economy, and political repression, following the crackdown at Tiananmen in mid-1989, has curtailed tourism, foreign aid, and new investment by foreign firms. Popular resistance and changes in central policy have weakened China's population control program, which is essential to the nation's long-term economic viability.

Beginning in late 1978 the Chinese leadership has been trying to move the
economy from the sluggish Soviet-style centrally planned economy to a more
productive and flexible economy with market elements--but elements, but still within the
framework of monolithic Communist control. To this end the authorities have
switched to a system of household responsibility in agriculture in place of
the old collectivization, increased the authority of local officials and
plant managers in industry, permitted a wide variety of small-scale
enterprise in services and light manufacturing, and opened the foreign
economic sector to increased trade and joint ventures. The most gratifying
result has been a strong spurt in production, particularly in agriculture in
the early 1980s. Otherwise, Industry also has posted major gains, especially in coastal
areas near Hong Kong and opposite Taiwan, where foreign investment and
modern production methods have helped spur production of both domestic and
export goods. Aggregate output has more than doubled since 1978. On the
darker side, the leadership has often experienced in its hybrid system the
worst results of socialism (bureaucracy, lassitude, corruption) and of
capitalism (windfall gains and stepped-up inflation). Beijing thus has
periodically backtracked, retightening central controls at intervals and
thereby undermining lessening the credibility of the reform process. In 1991 output rose
substantially, particularly in the favored coastal areas. Popular resistance and
resistance, changes in central policy policy, and loss of authority by rural cadres
have weakened China's population control program, which is essential to the
nation's long-term economic viability.

Beginning in late 1978 the Chinese leadership has been trying to move the
economy from the sluggish Soviet-style centrally planned economy to a more
productive and flexible economy with market elements, but still within the
framework of monolithic Communist control. To this end the authorities have
switched to a system of household responsibility in agriculture in place of
the old collectivization, increased the authority of local officials and
plant managers in industry, permitted a wide variety of small-scale
enterprise in services and light manufacturing, and opened the foreign
economic sector to increased trade and joint ventures. The most gratifying
result has been a strong spurt in production, particularly in agriculture in
the early 1980s. Industry also has posted major gains, especially in coastal
areas near Hong Kong and opposite Taiwan, where foreign investment and
modern production methods have helped spur production of both domestic and
export goods. Aggregate output has more than doubled since 1978. On the
darker side, the leadership has often experienced in its hybrid system the
worst results of socialism (bureaucracy, lassitude, corruption) and of
capitalism (windfall gains and stepped-up inflation). Beijing thus has
periodically backtracked, retightening central controls at intervals and
thereby lessening the credibility of the reform process. In 1991 1991, and again
in 1992, output rose
substantially, particularly in the favored coastal
areas. Popular
resistance, changes in central policy, and loss of authority
by rural cadres
have weakened China's population control program, which is
essential to the
nation's long-term economic viability.

Beginning in late 1978 the Chinese leadership has been trying to move the
the economy from the sluggish Soviet-style centrally planned economy
to a more
productive and flexible economy with market elements, but
still within the
framework of monolithic Communist control. To this
end the authorities have
switched to a system of household responsibility
in agriculture in place of
the old collectivization, increased the
authority of local officials and
plant managers in industry, permitted
a wide variety of small-scale
enterprise in services and light
manufacturing, and opened the foreign
economic sector economy to increased foreign trade and joint ventures. The most gratifying
investment. The result has been a strong spurt surge in production,
particularly in agriculture in
the early 1980s. Industry also has
posted major gains, especially in coastal
areas near Hong Kong and
opposite Taiwan, where foreign investment and
modern production
methods have helped spur production of both domestic and
export goods.
Aggregate output has more than doubled since 1978. On the
darker side,
the leadership has often experienced in its hybrid system the
worst
results of socialism (bureaucracy, lassitude, corruption) and of
capitalism (windfall gains and stepped-up inflation). Beijing thus has
periodically backtracked, retightening central controls at intervals and intervals.
thereby lessening the credibility of the reform process. In 1991, and again
in 1992, output rose substantially, 1992-93 annual growth of GDP has accelerated, particularly in the favored
coastal areas - to more than 10% annually according to official
areas. claims. In late 1993 China's leadership approved additional reforms
aimed at giving more play to market-oriented institutions and at
strengthening the center's control over the financial system. Popular
resistance, changes in central policy, and loss of authority
by rural
cadres have weakened China's population control program, which is
essential to the nation's long-term economic viability.

Beginning in late 1978 the Chinese leadership has been
trying to move
the economy from the sluggish Soviet-style centrally
planned economy
to a more productive and flexible economy with market
elements, but
still within the framework of monolithic Communist
control. To this
end the authorities switched to a system of household responsibility
responsibility in agriculture in place of the old collectivization,
increased the
authority of local officials and plant managers in
industry, permitted
a wide variety of small-scale enterprise in
services and light
manufacturing, and opened the economy to increased
foreign trade and
investment. The result has been a strong surge in production,
production, particularly in agriculture in the early 1980s. Industry
also has
posted major gains, especially in coastal areas near Hong
Kong and
opposite Taiwan, where foreign investment and modern production
production methods have helped spur production of both domestic and
export goods.
Aggregate output has more than doubled since 1978. On
the darker side,
the leadership has often experienced in its hybrid
system the worst
results of socialism (bureaucracy, lassitude,
corruption) and of
capitalism (windfall gains and stepped-up
inflation). Beijing thus has
periodically backtracked, retightening
central controls at intervals.
In 1992-93 1992-94 annual growth of GDP has
accelerated, particularly in the
coastal areas - to more than 10%
annually according to official
claims. In late 1993 China's leadership
approved additional long-term reforms
aimed at giving more play to
market-oriented institutions and at
strengthening the center's control
over the financial system. Popular In 1994 strong growth continued in the
widening market-oriented areas of the economy. At the same time, the
government struggled to (a) collect revenues due from provinces,
businesses, and individuals; (b) keep inflation within bounds; (c)
reduce extortion and other economic crimes; and (d) keep afloat the
large state-owned enterprises, most of which had not participated in
the vigorous expansion of the economy. From 60 to 100 million surplus
rural workers are adrift between the villages and the cities, many
barely subsisting through part-time low-pay jobs. Popular resistance,
changes in central policy, and loss of authority by rural
cadres have
weakened China's population control program, which is
essential to the
nation's long-term economic viability. One of the most dangerous
long-term threats to continued rapid economic growth is the
deterioration in the environment, notably air pollution, soil erosion,
and the steady fall of the water table especially in the north.

Beginning in late 1978 the Chinese leadership
has been
trying to move the economy from the a sluggish Soviet-style centrally
centrally planned economy to a one that is more productive and flexible economy with market
elements, market-oriented, but
still within the a rigid political framework of monolithic Communist
Party control.
To this end the authorities switched to a system of household
responsibility in agriculture in place of the old collectivization,
increased the authority of local officials and plant managers in
industry, permitted a wide variety of small-scale enterprise in
services and light manufacturing, and opened the economy to increased
increased foreign trade and investment. The result has been a strong surge in
production, particularly surge in agriculture production. Agricultural output doubled in the early 1980s. Industry 1980s, and
industry also has posted major gains, especially in coastal areas near Hong
Hong Kong and opposite Taiwan, where foreign investment and modern
production methods have helped spur production output of both domestic and
export
goods. Aggregate output GDP has more than doubled tripled since 1978. On
the darker side, the
leadership has often experienced in its hybrid
system the worst
results of socialism (bureaucracy, lassitude,
corruption) and of
capitalism (windfall gains and stepped-up
inflation). Beijing thus
has periodically backtracked, retightening
central controls at
intervals. In 1992-94 1992-95 annual growth of GDP
accelerated, particularly
in the coastal areas - to averaging more than 10%
annually according to
official claims. figures. In late 1993 China's leadership
approved
additional long-term reforms aimed at giving still more play to
market-oriented institutions and at strengthening the center's control
control over the financial system. In 1994 strong growth continued system; state enterprises would continue
to dominate many key industries in the what was now termed "a socialist
widening market-oriented areas of the economy. market economy." In 1995 inflation dropped sharply, reflecting
tighter monetary policies and stronger measures to control food
prices. At the same time, the
government struggled to (a) collect
revenues due from provinces,
businesses, and individuals; (b) keep inflation within bounds; (c)
reduce
extortion and other economic crimes; and (d) (c) keep afloat the
large
state-owned enterprises, most of which had not participated in
the
vigorous expansion of the economy. From 60 to 100 million surplus
rural workers are adrift between the villages and the cities, many
barely subsisting through part-time low-pay jobs. Popular resistance,
changes in central policy, and loss of authority by rural cadres have
have weakened China's population control program, which is essential
to the
nation's long-term economic viability. One of the most dangerous
dangerous long-term threats to continued rapid economic growth is the
the deterioration in the environment, notably air pollution, soil erosion,
erosion, and the steady fall of the water table especially in the
north. The amount of arable land continues to decline because of
erosion and economic development, the cumulative loss since the
Communist takeover in 1949 being more than 15%. The next few years
will witness increasing tensions between a highly centralized
political system and an increasingly decentralized economic system.

Beginning in late 1978 the Chinese leadership
has
been trying to move the economy from a sluggish Soviet-style
centrally
planned economy to one that is more market-oriented, market-oriented but
still within a
rigid political framework of Communist Party control.
To this end the
authorities switched to a system of household
responsibility in
agriculture in place of the old collectivization,
increased the
authority of local officials and plant managers in
industry, permitted
a wide variety of small-scale enterprise in
services and light
manufacturing, and opened the economy to
increased foreign trade and
investment. The result has been a strong quadrupling of GDP since 1978.
surge in production. Agricultural output doubled in the 1980s, and
industry also posted
major gains, especially in coastal areas near
Hong Kong and opposite
Taiwan, where foreign investment and modern
production methods helped spur output of both domestic
and export
goods. GDP has more than tripled since 1978. On the darker side, the
leadership has often
experienced in its hybrid system the worst
results of socialism
(bureaucracy, lassitude, corruption) and of
capitalism (windfall gains
and stepped-up inflation). Beijing thus
has periodically backtracked,
retightening central controls at
intervals. In 1992-95 1992-96 annual growth
of GDP accelerated, particularly
in the coastal areas - averaging more
than 10% annually according to
official figures. In late 1993 China's
leadership approved
additional long-term reforms aimed at giving still
more play to
market-oriented institutions and at strengthening the center's
center's control over the financial system; state enterprises would continue
continue to dominate many key industries in what was now termed "a socialist
socialist market economy." In 1995 1995-96 inflation dropped sharply, reflecting
reflecting tighter monetary policies and stronger measures to control food
food prices. At the same time, the government struggled to (a) collect
revenues due from provinces, businesses, and individuals; (b) reduce
extortion corruption and other economic crimes; and (c) keep afloat the large
state-owned enterprises, most of which had not participated in the
vigorous expansion of the economy. economy and many of which have been losing
the ability to pay full wages and pensions. From 60 to 100 million surplus
surplus rural workers are adrift between the villages and the cities, many
many subsisting through part-time low-pay low-paying jobs. Popular resistance,
changes in central policy, and loss of authority by rural cadres
have
weakened China's population control program, which is essential
to the nation's long-term economic viability. One of the most
dangerous maintaining growth in living standards. Another long-term threats threat to
continued rapid economic growth is
the deterioration in the
environment, notably air pollution, soil
erosion, and the steady fall
of the water table especially in the
north. The amount of arable land China continues to decline lose
arable land because of
erosion and economic development, the cumulative loss since the development; furthermore,
Communist takeover in 1949 being more than 15%. the regime gives insufficient priority to agricultural research. The
next few years
will witness increasing tensions between a highly centralized
centralized political system and an increasingly decentralized
economic system. Rapid economic growth likely will continue but at a
declining rate.

Beginning in late 1978 the Chinese leadership has
been trying to move the economy from a sluggish Soviet-style centrally
planned economy to one that is a more market-oriented economy but still within a
rigid political framework of Communist Party control. To this end the
authorities switched to a system of household responsibility in
agriculture in place of the old collectivization, increased the
authority of local officials and plant managers in industry, permitted
a wide variety of small-scale enterprise in services and light
manufacturing, and opened the economy to increased foreign trade and
investment. The result has been a quadrupling of GDP since 1978.
Agricultural output doubled in the 1980s, and industry also posted
major gains, especially in coastal areas near Hong Kong and opposite
Taiwan, where foreign investment helped spur output of both domestic
and export goods. On the darker side, the leadership has often
experienced in its hybrid system the worst results of socialism
(bureaucracy, lassitude, corruption) and of capitalism (windfall gains
and stepped-up inflation). Beijing thus has periodically backtracked,
retightening central controls at intervals. In 1992-96 1992-97 annual growth
of GDP accelerated, particularly in the coastal areas - averaging more areas-averaging about
than 10% annually according to official figures. In late 1993 China's
leadership approved additional long-term reforms aimed at giving still
more play to market-oriented institutions and at strengthening the
center's control over the financial system; state enterprises would
continue to dominate many key industries in what was now termed "a
socialist market economy." In 1995-96 1995-97 inflation dropped sharply,
reflecting tighter monetary policies and stronger measures to control
food prices. At the same time, the government struggled to (a) collect
revenues due from provinces, businesses, and individuals; (b) reduce
corruption and other economic crimes; and (c) keep afloat the large
state-owned enterprises, most of which had not participated in the
vigorous expansion of the economy and many of which have been losing
the ability to pay full wages and pensions. From 60 to 100 million
surplus rural workers are adrift between the villages and the cities,
many subsisting through part-time low-paying jobs. Popular resistance,
changes in central policy, and loss of authority by rural cadres have
weakened China's population control program, which is essential to
maintaining growth in living standards. Another long-term threat to
continued rapid economic growth is the deterioration in the
environment, notably air pollution, soil erosion, and the steady fall
of the water table especially in the north. China continues to lose
arable land because of erosion and economic development; furthermore,
the regime gives insufficient priority to agricultural research. The
next few years will may witness increasing tensions between a highly
centralized political system and an increasingly decentralized
economic system. Rapid economic growth likely will continue but at a
declining rate. Hong Kong's reversion on 1 July 1997 to Chinese
administration will strengthen the already close ties between the two
economies.

Beginning in late 1978 the Chinese leadership has
has been trying to move the economy from a sluggish Soviet-style centrally
centrally planned economy to a more market-oriented economy but
still within a
rigid political framework of Communist Party control.
To this end the
authorities switched to a system of household
responsibility in
agriculture in place of the old collectivization,
increased the
authority of local officials and plant managers in
industry, permitted
a wide variety of small-scale enterprise in
services and light
manufacturing, and opened the economy to
increased foreign trade and
investment. The result has been a
quadrupling of GDP since 1978.
Agricultural output doubled in the
1980s, and industry also posted
major gains, especially in coastal
areas near Hong Kong and opposite
Taiwan, where foreign investment
helped spur output of both domestic
and export goods. On the darker
side, the leadership has often
experienced in its hybrid system the
worst results of socialism
(bureaucracy, lassitude, corruption) and
of capitalism (windfall gains
and stepped-up inflation). Beijing
thus has periodically backtracked,
retightening central controls at intervals. In 1992-97 annual growth
of GDP accelerated, particularly in the coastal areas-averaging about
10% annually according to official figures. intervals. In late 1993 China's
leadership approved additional
long-term reforms aimed at giving still
more play to market-oriented
institutions and at strengthening the
center's control over the
financial system; state enterprises would
continue to dominate many
key industries in what was now termed "a
socialist market economy." economy".
In 1995-97 inflation dropped sharply,
reflecting tighter monetary
policies and stronger measures to control
food prices. At the same
time, the government struggled to (a) collect
revenues due from
provinces, businesses, and individuals; (b) reduce
corruption and
other economic crimes; and (c) keep afloat the large
state-owned
enterprises, most of which had not participated in the
vigorous
expansion of the economy and many of which have had been losing
the
ability to pay full wages and pensions. From 60 to 100 million
surplus rural workers are adrift between the villages and the cities,
cities, many subsisting through part-time low-paying jobs. Popular resistance,
resistance, changes in central policy, and loss of authority by
rural cadres have
weakened China's population control program, which
is essential to
maintaining growth in living standards. Another
long-term threat to
continued rapid economic growth is the
deterioration in the
environment, notably air pollution, soil
erosion, and the steady fall
of the water table especially in the
north. China continues to lose
arable land because of erosion and economic development; furthermore,
the regime gives insufficient priority to agricultural research. economic development. The
next few years may witness increasing
tensions between a highly
centralized political system and an
increasingly decentralized
economic system. Rapid economic Economic growth likely will continue but at a
declining rate. Hong Kong's reversion on 1 July 1997 to Chinese probably
administration will strengthen the already close ties between the two
economies. slow to more moderate levels in 1999-2000.

Beginning in late 1978 the Chinese leadership
has been trying to move moving the economy from a sluggish Soviet-style
centrally planned economy to a more market-oriented economy but
still within a rigid political framework of Communist Party control.
To this end the authorities have switched to a system of household
responsibility in agriculture in place of the old collectivization,
increased the authority of local officials and plant managers in
industry, permitted a wide variety of small-scale enterprise in
services and light manufacturing, and opened the economy to
increased foreign trade and investment. The result has been a
quadrupling of GDP since 1978. In 1999, with its 1.25 billion people but a GDP of just $3,800 per capita, China became the second largest economy in the world after the US. Agricultural output doubled in the
1980s, and industry also posted major gains, especially in coastal
areas near Hong Kong and opposite Taiwan, where foreign investment
helped spur output of both domestic and export goods. On the darker
side, the leadership has often experienced in its hybrid system the
worst results of socialism (bureaucracy, lassitude, corruption) and
of capitalism (windfall gains and stepped-up inflation). Beijing
thus has periodically backtracked, retightening central controls at
intervals. In late 1993 China's leadership approved additional
long-term reforms aimed at giving still more play to market-oriented
institutions and at strengthening the center's control over the
financial system; state enterprises would continue to dominate many
key industries in what was now termed "a socialist market economy".
In 1995-97 1995-99 inflation dropped sharply, reflecting tighter monetary
policies and stronger measures to control food prices. At the same
time, the government struggled to (a) collect revenues due from
provinces, businesses, and individuals; (b) reduce corruption and
other economic crimes; and (c) keep afloat the large state-owned
enterprises, most of which had not participated in the vigorous
expansion of the economy and many of which had been losing the
ability to pay full wages and pensions. From 60 50 to 100 million
surplus rural workers are adrift between the villages and the
cities, many subsisting through part-time low-paying jobs. Popular
resistance, changes in central policy, and loss of authority by
rural cadres have weakened China's population control program, which
is essential to maintaining growth in living standards. Another
long-term threat to continued rapid economic growth is the
deterioration in the environment, notably air pollution, soil
erosion, and the steady fall of the water table especially in the
north. China continues to lose arable land because of erosion and
economic development. The next few years may will witness increasing
tensions between a highly centralized political system and an
increasingly decentralized economic system. Economic growth probably
will slow to more moderate levels in 1999-2000.

Beginning in In late 1978 the Chinese leadership has been began moving the economy from a sluggish Soviet-style centrally planned economy to a more market-oriented economy but still system. Whereas the system operates within a rigid political framework of strict Communist Party control. To this end control, the economic influence of non-state managers and enterprises has been steadily increasing. The authorities have switched to a system of household responsibility in agriculture in place of the old collectivization, increased the authority of local officials and plant managers in industry, permitted a wide variety of small-scale enterprise in services and light manufacturing, and opened the economy to increased foreign trade and investment. The result has been a quadrupling of GDP since 1978. In 1999, 2000, with its 1.25 1.26 billion people but a GDP of just $3,800 $3,600 per capita, China became stood as the second largest economy in the world after the US. US (measured on a purchasing power parity basis). Agricultural output doubled in the 1980s, and industry also posted major gains, especially in coastal areas near Hong Kong and opposite Taiwan, where foreign investment helped spur output of both domestic and export goods. On the darker side, the leadership has often experienced in its hybrid system the worst results of socialism (bureaucracy, lassitude, corruption) (bureaucracy and lassitude) and of capitalism (windfall gains and stepped-up inflation). Beijing thus has periodically backtracked, retightening central controls at intervals. In late 1993 China's leadership approved additional long-term reforms aimed at giving still more play to market-oriented institutions and at strengthening the center's control over the financial system; state enterprises would continue to dominate many key industries in what was now termed "a socialist market economy". In 1995-99 inflation dropped sharply, reflecting tighter monetary policies and stronger measures to control food prices. At the same time, the The government has struggled to (a) collect revenues due from provinces, businesses, and individuals; (b) reduce corruption and other economic crimes; and (c) keep afloat the large state-owned enterprises, most enterprises many of which had not participated in the vigorous expansion of the economy been shielded from competition by subsides and many of which had been losing the ability to pay full wages and pensions. From 50 80 to 100 120 million surplus rural workers are adrift between the villages and the cities, many subsisting through part-time low-paying jobs. Popular resistance, changes in central policy, and loss of authority by rural cadres have weakened China's population control program, which is essential to maintaining growth in living standards. Another long-term threat to continued rapid economic growth is the deterioration in the environment, notably air pollution, soil erosion, and the steady fall of the water table especially in the north. China continues to lose arable land because of erosion and economic development. The next few years Weakness in the global economy in 2001 could hamper growth in exports. Beijing will witness increasing tensions between a highly centralized political system intensify efforts to stimulate growth through spending on infrastructure--such as water control and an increasingly decentralized economic system. power grids--and poverty relief and through rural tax reform aimed at eliminating arbitrary local levies on farmers.

In late 1978 the Chinese leadership began moving the economy from a sluggish Soviet-style centrally planned economy to a more market-oriented system. Whereas the system operates within a political framework of strict Communist control, the economic influence of non-state managers organizations and enterprises individual citizens has been steadily increasing. The authorities have switched to a system of household and village responsibility in agriculture in place of the old collectivization, increased the authority of local officials and plant managers in industry, permitted a wide variety of small-scale enterprise in services and light manufacturing, and opened the economy to increased foreign trade and investment. The result has been a quadrupling of GDP since 1978. In 2000, 2002, with its 1.26 1.28 billion people but a GDP of just $3,600 $4,600 per capita, China stood as the second largest economy in the world after the US (measured on a purchasing power parity basis). Agricultural output doubled in the 1980s, Agriculture and industry also have posted major gains, especially in coastal areas near Hong Kong and opposite Taiwan, where foreign investment has helped spur output of both domestic and export goods. On the darker side, the leadership has often experienced in its hybrid system the worst results of socialism (bureaucracy and lassitude) and of capitalism (windfall gains and stepped-up inflation). growing income disparities). Beijing thus has periodically backtracked, retightening central controls at intervals. The government has struggled to (a) collect revenues due from provinces, businesses, and individuals; (b) reduce corruption and other economic crimes; and (c) keep afloat the large state-owned enterprises many of which had been shielded from competition by subsides subsidies and had been losing the ability to pay full wages and pensions. From 80 to 120 million surplus rural workers are adrift between the villages and the cities, many subsisting through part-time low-paying jobs. Popular resistance, changes in central policy, and loss of authority by rural cadres have weakened China's population control program, which is essential to maintaining long-term growth in living standards. Another long-term threat to continued rapid economic growth is the deterioration in the environment, notably air pollution, soil erosion, and the steady fall of the water table especially in the north. China continues to lose arable land because of erosion and economic development. Weakness in the global economy in 2001 could hamper growth in exports. Beijing will intensify efforts to stimulate growth through spending on infrastructure--such infrastructure - such as water control and power grids--and grids - and poverty relief and through rural tax reform aimed at eliminating arbitrary local levies on farmers. Access to the World Trade Organization strengthens China's ability to maintain sturdy growth rates, and at the same time puts additional pressure on the hybrid system of strong political controls and growing market influences. Although Beijing has claimed 7%-8% annual growth in recent years, many observers believe the rate, while strong, is more like 5%.

In late 1978 the Chinese leadership began moving the economy from a sluggish sluggish, Soviet-style centrally planned economy to a more market-oriented system. Whereas the system operates within a political framework of strict Communist control, the economic influence of non-state organizations and individual citizens has been steadily increasing. The authorities have switched to a system of household and village responsibility in agriculture in place of the old collectivization, increased the authority of local officials and plant managers in industry, permitted a wide variety of small-scale enterprise enterprises in services and light manufacturing, and opened the economy to increased foreign trade and investment. The result has been a quadrupling of GDP since 1978. In 2002, 2003, with its 1.28 1.3 billion people but a GDP of just $4,600 $5,000 per capita, China stood as the second largest second-largest economy in the world after the US (measured on a purchasing power parity basis). Agriculture and industry have posted major gains, especially in coastal areas near Hong Kong and opposite Taiwan, where foreign investment has helped spur output of both domestic and export goods. On the darker side, the leadership has The leadership, however, often has experienced in - as a result of its hybrid system - the worst results of socialism (bureaucracy and lassitude) and of capitalism (windfall gains and growing income disparities). Beijing China thus has periodically backtracked, retightening central controls at intervals. The government has struggled to (a) collect revenues due from provinces, businesses, and individuals; (b) reduce corruption and other economic crimes; and (c) keep afloat the large state-owned enterprises enterprises, many of which had been shielded from competition by subsidies and had been losing the ability to pay full wages and pensions. From 80 to 120 million surplus rural workers are adrift between the villages and the cities, many subsisting through part-time low-paying jobs. Popular resistance, changes in central policy, and loss of authority by rural cadres have weakened China's population control program, which is essential to maintaining long-term growth in living standards. Another long-term threat to growth is the deterioration in the environment, notably air pollution, soil erosion, and the steady fall of the water table especially in the north. China continues to lose arable land because of erosion and economic development. Beijing says it will intensify efforts to stimulate growth through spending on infrastructure - such as water control and power grids - and poverty relief and through rural tax reform aimed at eliminating arbitrary local levies on farmers. Access Accession to the World Trade Organization strengthens helps strengthen China's ability to maintain sturdy strong growth rates, and rates but at the same time puts additional pressure on the hybrid system of strong political controls and growing market influences. Although Beijing China has claimed 7%-8% annual growth benefited from a huge expansion in recent years, many observers believe the rate, while strong, is more like 5%. computer internet use. Foreign investment remains a strong element in China's remarkable economic growth.

In late 1978 the Chinese leadership began moving the economy from a sluggish, inefficient, Soviet-style centrally planned economy to a more market-oriented system. Whereas the system operates within a political framework of strict Communist control, the economic influence of non-state organizations and individual citizens has been steadily increasing. The authorities switched to a system of household and village responsibility in agriculture in place of the old collectivization, increased the authority of local officials and plant managers in industry, permitted a wide variety of small-scale enterprises in services and light manufacturing, and opened the economy to increased foreign trade and investment. The result has been a quadrupling of GDP since 1978. In 2003, with its 1.3 billion people but Measured on a GDP of just $5,000 per capita, purchasing power parity (PPP) basis, China in 2003 stood as the second-largest economy in the world after the US (measured on a purchasing power parity basis). US, although in per capita terms the country is still poor. Agriculture and industry have posted major gains, gains especially in coastal areas near Hong Kong and Kong, opposite Taiwan, and in Shanghai, where foreign investment has helped spur output of both domestic and export goods. The leadership, however, often has experienced - as a result of its hybrid system - the worst results of socialism (bureaucracy and lassitude) and of capitalism (windfall gains and growing (growing income disparities). disparities and rising unemployment). China thus has periodically backtracked, retightening central controls at intervals. The government has struggled to (a) collect revenues due sustain adequate jobs growth for tens of millions of workers laid off from provinces, businesses, state-owned enterprises, migrants, and individuals; new entrants to the work force; (b) reduce corruption and other economic crimes; and (c) keep afloat the large state-owned enterprises, many of which had been shielded from competition by subsidies and had been losing the ability to pay full wages and pensions. From 80 to 120 million surplus rural workers are adrift between the villages and the cities, many subsisting through part-time part-time, low-paying jobs. Popular resistance, changes in central policy, and loss of authority by rural cadres have weakened China's population control program, which is essential to maintaining long-term growth in living standards. Another long-term threat to growth is the deterioration in the environment, notably air pollution, soil erosion, and the steady fall of the water table especially in the north. China continues to lose arable land because of erosion and economic development. Beijing says it will intensify efforts to stimulate growth through spending on infrastructure - such as water control supply and power grids - and poverty relief and through rural tax reform aimed at eliminating arbitrary local levies on farmers. reform. Accession to the World Trade Organization helps strengthen China's its ability to maintain strong growth rates but at the same time puts additional pressure on the hybrid system of strong political controls and growing market influences. China has benefited from a huge expansion in computer internet use. Foreign investment remains a strong element in China's remarkable economic growth. Growing shortages of electric power and raw materials will hold back the expansion of industrial output in 2004.

In late 1978 the Chinese leadership began moving the economy from a sluggish, inefficient, Soviet-style centrally planned economy to a more market-oriented system. Whereas the system operates within a political framework of strict Communist control, the economic influence of non-state organizations and individual citizens has been steadily increasing. The authorities switched to a system of household and village responsibility in agriculture in place of the old collectivization, increased the authority of local officials and plant managers in industry, permitted a wide variety of small-scale enterprises in services and light manufacturing, and opened the economy to increased foreign trade and investment. The result has been a quadrupling of GDP since 1978. Measured on a purchasing power parity (PPP) basis, China in 2003 2004 stood as the second-largest economy in the world after the US, although in per capita terms the country is still poor. Agriculture and industry have posted major gains especially in coastal areas near Hong Kong, Kong and opposite Taiwan, Taiwan and in Shanghai, where foreign investment has helped spur output of both domestic and export goods. The leadership, however, often has experienced - as a result of its hybrid system - the worst results of socialism (bureaucracy and lassitude) and of capitalism (growing income disparities and rising unemployment). China thus has periodically backtracked, retightening central controls at intervals. The government has struggled to (a) sustain adequate jobs growth for tens of millions of workers laid off from state-owned enterprises, migrants, and new entrants to the work force; (b) reduce corruption and other economic crimes; and (c) keep afloat the large state-owned enterprises, many of which had been shielded from competition by subsidies and had been losing the ability to pay full wages and pensions. From 80 100 to 120 150 million surplus rural workers are adrift between the villages and the cities, many subsisting through part-time, low-paying jobs. Popular resistance, changes in central policy, and loss of authority by rural cadres have weakened China's population control program, which is essential to maintaining long-term growth in living standards. At the same time, one demographic consequence of the "one child" policy is that China is now one of the most rapidly aging countries in the world. Another long-term threat to growth is the deterioration in the environment, environment - notably air pollution, soil erosion, and the steady fall of the water table especially in the north. China continues to lose arable land because of erosion and economic development. As part of its effort to gradually slow the rapid economic growth seen in 2004, Beijing says it will intensify efforts to stimulate growth through reduce somewhat its spending on infrastructure - such as water supply and power grids - and in 2005, while continuing to focus on poverty relief and through rural tax reform. Accession to the World Trade Organization helps strengthen its ability to maintain strong growth rates but at the same time puts additional pressure on the hybrid system of strong political controls and growing market influences. China has benefited from a huge expansion in computer internet use. Internet use, with 94 million users at the end of 2004. Foreign investment remains a strong element in China's remarkable economic growth. Growing shortages Shortages of electric power and raw materials will hold back the expansion of may affect industrial output in 2004. 2005. More power generating capacity is scheduled to come on line in 2006. In its rivalry with India as an economic power, China has a lead in the absorption of technology, the rising prominence in world trade, and the alleviation of poverty; India has one important advantage in its relative mastery of the English language, but the number of competent Chinese English-speakers is growing rapidly.

In late 1978 the Chinese leadership began moving the China's economy during the last quarter century has changed from a sluggish, inefficient, Soviet-style centrally planned economy system that was largely closed to international trade to a more market-oriented system. Whereas the system operates within a political framework of strict Communist control, the economic influence of non-state organizations and individual citizens economy that has been steadily increasing. The authorities switched to a system of household rapidly growing private sector and village responsibility is a major player in agriculture the global economy. Reforms started in place the late 1970s with the phasing out of collectivized agriculture, and expanded to include the old collectivization, gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, the authority foundation of local officials and plant managers in industry, permitted a wide variety diversified banking system, the development of small-scale enterprises in services and light manufacturing, stock markets, the rapid growth of the non-state sector, and opened the economy opening to increased foreign trade and investment. The result China has been generally implemented reforms in a quadrupling gradualist or piecemeal fashion. The process continues with key moves in 2005 including the sale of equity in China's largest state banks to foreign investors and refinements in foreign exchange and bond markets. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. Measured on a purchasing power parity (PPP) basis, China in 2004 2005 stood as the second-largest economy in the world after the US, although in per capita terms the country is still poor. Agriculture lower middle-income and industry have posted major gains especially 150 million Chinese fall below international poverty lines. Economic development has generally been more rapid in coastal areas near Hong Kong and opposite Taiwan and provinces than in Shanghai, where foreign investment has helped spur output of both domestic and export goods. The leadership, however, often has experienced - as a result of its hybrid system - the worst results of socialism (bureaucracy and lassitude) interior, and of capitalism (growing income there are large disparities and rising unemployment). China thus has periodically backtracked, retightening central controls at intervals. in per capita income between regions. The government has struggled to to: (a) sustain adequate jobs job growth for tens of millions of workers laid off from state-owned enterprises, migrants, and new entrants to the work force; (b) reduce corruption and other economic crimes; and (c) keep afloat the large state-owned enterprises, many of which had been shielded from competition by subsidies contain environmental damage and had been losing the ability social strife related to pay full wages and pensions. the economy's rapid transformation. From 100 to 150 million surplus rural workers are adrift between the villages and the cities, many subsisting through part-time, low-paying jobs. Popular resistance, changes in central policy, and loss of authority by rural cadres have weakened China's population control program, which is essential to maintaining long-term growth in living standards. At the same time, one One demographic consequence of the "one child" policy is that China is now one of the most rapidly aging countries in the world. Another long-term threat to growth is the deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table table, especially in the north. China continues to lose arable land because of erosion and economic development. As part of its effort to gradually slow the rapid economic growth seen in 2004, Beijing says it will reduce somewhat its spending on infrastructure in 2005, while continuing to focus on poverty relief and through rural tax reform. Accession to the World Trade Organization helps strengthen its ability to maintain strong growth rates but at the same time puts additional pressure on the hybrid system of strong political controls and growing market influences. China has benefited from a huge expansion in computer Internet use, with 94 more than 100 million users at the end of 2004. 2005. Foreign investment remains a strong element in China's remarkable economic growth. Shortages expansion in world trade and has been an important factor in the growth of urban jobs. In July 2005, China revalued its currency by 2.1% against the US dollar and moved to an exchange rate system that references a basket of currencies. Reports of shortages of electric power and raw materials may affect industrial output in 2005. the summer of 2005 in southern China receded by September-October and did not have a substantial impact on China's economy. More power generating capacity is scheduled to come on line in 2006. In its rivalry with India 2006 as an economic power, China has large scale investments are completed. Thirteen years in construction at a lead cost of $24 billion, the immense Three Gorges Dam across the Yangtze River will be essentially completed in 2006 and will revolutionize electrification and flood control in the absorption area. The Central Committee of technology, the rising prominence Chinese Communist Party in world trade, October 2005 approved the draft 11th Five-Year Plan and the alleviation of poverty; India has one important advantage National People's Congress is expected to give final approval in its relative mastery March 2006. The plan calls for a 20% reduction in energy consumption per unit of GDP by 2010 and an estimated 45% increase in GDP by 2010. The plan states that conserving resources and protecting the English language, environment are basic goals, but it lacks details on the number of competent Chinese English-speakers is growing rapidly. policies and reforms necessary to achieve these goals.

China's economy during the last quarter century has changed from a centrally planned system that was largely closed to international trade to a more market-oriented economy that has a rapidly growing private sector and is a major player in the global economy. Reforms started in the late 1970s with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, the foundation of a diversified banking system, the development of stock markets, the rapid growth of the non-state sector, and the opening to foreign trade and investment. China has generally implemented reforms in a gradualist or piecemeal fashion. The process continues with key moves in 2005 fashion, including the sale of equity in China's largest state banks to foreign investors and refinements in foreign exchange and bond markets. markets in 2005. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. Measured on a purchasing power parity (PPP) basis, China in 2005 2006 stood as the second-largest economy in the world after the US, although in per capita terms the country is still lower middle-income and 150 130 million Chinese fall below international poverty lines. Economic development has generally been more rapid in coastal provinces than in the interior, and there are large disparities in per capita income between regions. The government has struggled to: (a) sustain adequate job growth for tens of millions of workers laid off from state-owned enterprises, migrants, and new entrants to the work force; (b) reduce corruption and other economic crimes; and (c) contain environmental damage and social strife related to the economy's rapid transformation. From 100 million to 150 million surplus rural workers are adrift between the villages and the cities, many subsisting through part-time, low-paying jobs. One demographic consequence of the "one child" policy is that China is now one of the most rapidly aging countries in the world. Another long-term threat to growth is the deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the north. China continues to lose arable land because of erosion and economic development. China has benefited from a huge expansion in computer Internet use, with more than 100 million users at the end of 2005. Foreign investment remains a strong element in China's remarkable expansion in world trade and has been an important factor in the growth of urban jobs. In July 2005, China revalued its currency by 2.1% against the US dollar and moved to an exchange rate system that references a basket of currencies. Reports of shortages of electric power in In 2006 China had the summer of 2005 largest current account surplus in southern China receded by September-October and did not have a substantial impact on China's economy. the world - nearly $180 billion. More power generating capacity is scheduled to come came on line in 2006 as large scale investments are were completed. Thirteen years in construction at a cost of $24 billion, the immense Three Gorges Dam across the Yangtze River will be was essentially completed in 2006 and will revolutionize electrification and flood control in the area. The Central Committee of the Chinese Communist Party in October 2005 approved the draft 11th Five-Year Plan and Program (2006-10), approved by the National People's Congress is expected to give final approval in March 2006. The plan 2006, calls for a 20% reduction in energy consumption per unit of GDP by 2010 and an estimated 45% increase in GDP by 2010. The plan states that conserving resources and protecting the environment are basic goals, but it lacks details on the policies and reforms necessary to achieve these goals.

China's economy during the last quarter century has changed from a centrally planned system that was largely closed to international trade to a more market-oriented economy that has a rapidly growing private sector and is a major player in the global economy. Reforms started in the late 1970s with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, the foundation of a diversified banking system, the development of stock markets, the rapid growth of the non-state sector, and the opening to foreign trade and investment. China has generally implemented reforms in a gradualist or piecemeal fashion, including the sale of equity minority shares in four of China's largest state banks to foreign investors and refinements in foreign exchange and bond markets in 2005. After keeping its currency tightly linked to the US dollar for years, China in July 2005 revalued its currency by 2.1% against the US dollar and moved to an exchange rate system that references a basket of currencies. Cumulative appreciation of the renminbi against the US dollar since the end of the dollar peg reached 15% in January 2008. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. Measured on a purchasing power parity (PPP) basis, China in 2006 2007 stood as the second-largest economy in the world after the US, although in per capita terms the country is still lower middle-income and 130 million Chinese fall below international poverty lines. Economic development has generally been more rapid middle-income. Annual inflows of foreign direct investment in coastal provinces 2007 rose to $75 billion. By the end of 2007, more than 5,000 domestic Chinese enterprises had established direct investments in the interior, 172 countries and there are large disparities in per capita income between regions. regions around the world. The Chinese government has struggled to: faces several economic development challenges: (a) to sustain adequate job growth for tens of millions of workers laid off from state-owned enterprises, migrants, and new entrants to the work force; (b) to reduce corruption and other economic crimes; and (c) to contain environmental damage and social strife related to the economy's rapid transformation. From 100 million to 150 million surplus rural workers are adrift between Economic development has been more rapid in coastal provinces than in the villages interior, and the cities, many subsisting through part-time, low-paying jobs. approximately 200 million rural laborers have relocated to urban areas to find work. One demographic consequence of the "one child" policy is that China is now one of the most rapidly aging countries in the world. Another long-term threat to growth is the deterioration Deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the north. north - is another long-term problem. China continues to lose arable land because of erosion and economic development. In 2007 China has benefited from a huge expansion in computer Internet use, with more than 100 million users at intensified government efforts to improve environmental conditions, tying the end evaluation of 2005. Foreign investment remains local officials to environmental targets, publishing a strong element in China's remarkable expansion in world trade national climate change policy, and has been an important factor in the growth of urban jobs. In July 2005, China revalued its currency establishing a high level leading group on climate change, headed by 2.1% against the US dollar and moved Premier WEN Jiabao. The Chinese government seeks to an exchange rate system that references a basket of currencies. In 2006 China had the largest current account surplus add energy production capacity from sources other than coal and oil as its double-digit economic growth increases demand. Chinese energy officials in the world - nearly $180 billion. 2007 agreed to purchase five third generation nuclear reactors from Western companies. More power generating capacity came on line in 2006 as large scale investments were completed. Thirteen years in construction at a cost of $24 billion, - including the immense Three Gorges Dam across the Yangtze River was essentially completed in 2006 and will revolutionize electrification and flood control in the area. The 11th Five-Year Program (2006-10), approved by the National People's Congress in March 2006, calls for a 20% reduction in energy consumption per unit of GDP by 2010 and an estimated 45% increase in GDP by 2010. The plan states that conserving resources and protecting the environment are basic goals, but it lacks details on the policies and reforms necessary to achieve these goals. - were completed.

China's economy during the last quarter century past 30 years has changed from a centrally planned system that was largely closed to international trade to a more market-oriented economy that has a rapidly growing private sector and is a major player in the global economy. Reforms started in the late 1970s with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, the foundation of a diversified banking system, the development of stock markets, the rapid growth of the non-state sector, and the opening to foreign trade and investment. Annual inflows of foreign direct investment rose to nearly $84 billion in 2007. China has generally implemented reforms in a gradualist or piecemeal fashion, including the sale of minority shares fashion. In recent years, China has re-invigorated its support for leading state-owned enterprises in four of China's largest state banks sectors it considers important to foreign investors and refinements in foreign exchange and bond markets in 2005. "economic security," explicitly looking to foster globally competitive national champions. After keeping its currency tightly linked to the US dollar for years, China in July 2005 revalued its currency by 2.1% against the US dollar and moved to an exchange rate system that references a basket of currencies. Cumulative appreciation of the renminbi against the US dollar since the end of the dollar peg reached 15% in January 2008. was more than 20% by late 2008, but the exchange rate has changed little since the onset of the global financial crisis. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. Measured on a purchasing power parity (PPP) basis, basis that adjusts for price differences, China in 2007 2008 stood as the second-largest economy in the world after the US, although in per capita terms the country is still lower middle-income. Annual inflows of foreign direct investment in 2007 rose to $75 billion. By the end of 2007, more than 5,000 domestic Chinese enterprises had established direct investments in 172 countries and regions around the world. The Chinese government faces several numerous economic development challenges: challenges, including: (a) strengthening its social safety net, including pension and health system reform, to sustain counteract a high domestic savings rate and correspondingly low domestic demand; (b) sustaining adequate job growth for tens of millions of workers laid off from state-owned enterprises, migrants, and new entrants to the work force; (b) to reduce force, and workers laid off from state-owned enterprises deemed not worth saving; (c) reducing corruption and other economic crimes; and (c) to contain (d) containing environmental damage and social strife related to the economy's rapid transformation. Economic development has been more rapid in coastal provinces than in the interior, and approximately 200 million rural laborers and their dependents have relocated to urban areas to find work. work - in recent years many have returned to their villages. One demographic consequence of the "one child" policy is that China is now one of the most rapidly aging countries in the world. Deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the north - is another long-term problem. China continues to lose arable land because of erosion and economic development. In 2007 China intensified government efforts to improve environmental conditions, tying the evaluation of local officials to environmental targets, publishing a national climate change policy, and establishing a high level leading group on climate change, headed by Premier WEN Jiabao. The Chinese government seeks to add energy production capacity from sources other than coal and oil oil. In late 2008, as China commemorated the 30th anniversary of its double-digit historic economic growth increases demand. reforms, the global economic downturn began to slow foreign demand for Chinese energy officials exports for the first time in 2007 agreed many years. The government vowed to purchase five third generation nuclear reactors from Western companies. More power generating capacity came continue reforming the economy and emphasized the need to increase domestic consumption in order to make China less dependent on line foreign exports for GDP growth in 2006 as large scale investments - including the Three Gorges Dam across the Yangtze River - were completed. future.

China's economy during since the past 30 years late 1970s has changed from a closed, centrally planned system that was largely closed to international trade to a more market-oriented economy one that has a rapidly growing private sector and is plays a major player role in the global economy. Reforms started economy - in 2010 China became the late 1970s world's largest exporter. Reforms began with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, the foundation creation of a diversified banking system, the development of stock markets, the rapid growth of the non-state private sector, and the opening to foreign trade and investment. Annual inflows of foreign direct investment rose to nearly $84 billion in 2007. China has generally has implemented reforms in a gradualist or piecemeal fashion. In recent years, China has re-invigorated renewed its support for leading state-owned enterprises in sectors it considers important to "economic security," explicitly looking to foster globally competitive national champions. After keeping its currency tightly linked to the US dollar for years, China in July 2005 China revalued its currency by 2.1% against the US dollar and moved to an exchange rate system that references a basket of currencies. Cumulative From mid 2005 to late 2008 cumulative appreciation of the renminbi against the US dollar since the end of the dollar peg was more than 20% by late 2008, 20%, but the exchange rate has changed little since remained virtually pegged to the dollar from the onset of the global financial crisis. crisis until June 2010, when Beijing allowed resumption of a gradual appreciation. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2008 2010 stood as the second-largest economy in the world after the US, having surpassed Japan in 2001. The dollar values of China's agricultural and industrial output each exceeded those of the US, although China was second to the US in the value of services it produced. Still, per capita terms the country income is still lower middle-income. below the world average. The Chinese government faces numerous economic development challenges, including: (a) strengthening reducing its social safety net, including pension and health system reform, to counteract a high domestic savings rate and correspondingly low domestic demand; (b) sustaining adequate job growth for tens of millions of migrants, migrants and new entrants to the work force, and workers laid off from state-owned enterprises deemed not worth saving; force; (c) reducing corruption and other economic crimes; and (d) containing environmental damage and social strife related to the economy's rapid transformation. Economic development has been more rapid progressed further in coastal provinces than in the interior, and approximately 200 million rural laborers and their dependents have relocated to urban areas to find work - in recent years many have returned to their villages. work. One demographic consequence of the "one child" policy is that China is now one of the most rapidly aging countries in the world. Deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the north - is another long-term problem. China continues to lose arable land because of erosion and economic development. In 2007 China intensified government efforts to improve environmental conditions, tying the evaluation of local officials to environmental targets, publishing a national climate change policy, and establishing a high level leading group on climate change, headed by Premier WEN Jiabao. The Chinese government seeks is seeking to add energy production capacity from sources other than coal and oil. oil, focusing on nuclear and alternative energy development. In late 2008, as China commemorated the 30th anniversary of its historic economic reforms, 2009, the global economic downturn began to slow reduced foreign demand for Chinese exports for the first time in many years. years, but China rebounded quickly, outperforming all other major economies in 2010 with GDP growth around 10%. The economy appears set to remain on a strong growth trajectory in 2011, lending credibility to the stimulus policies the regime rolled out during the global financial crisis. The government vowed vows to continue reforming the economy and emphasized emphasizes the need to increase domestic consumption in order to make China the economy less dependent on foreign exports for GDP growth in the future. future, but China likely will make only marginal progress toward these rebalancing goals in 2011. Two economic problems China currently faces are inflation - which, late in 2010, surpassed the government's target of 3% - and local government debt, which swelled as a result of stimulus policies, and is largely off-the-books and potentially low-quality.

China's economy since Since the late 1970s China has changed moved from a closed, centrally planned system to a more market-oriented one that plays a major role in the global economy role - in 2010 China became the world's largest exporter. Reforms began with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, creation of a diversified banking system, development of stock markets, rapid growth of the private sector, and opening to foreign trade and investment. China generally has implemented reforms in a gradualist fashion. In recent years, China has renewed its support for state-owned enterprises in sectors it considers important to "economic security," explicitly looking to foster globally competitive national champions. After keeping its currency tightly linked to the US dollar for years, in July 2005 China revalued its currency by 2.1% against the US dollar and moved to an exchange rate system that references a basket of currencies. From mid 2005 to late 2008 cumulative appreciation of the renminbi against the US dollar was more than 20%, but the exchange rate remained virtually pegged to the dollar from the onset of the global financial crisis until June 2010, when Beijing allowed resumption of a gradual appreciation. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2010 stood as the second-largest economy in the world after the US, having surpassed Japan in 2001. The dollar values of China's agricultural and industrial output each exceeded exceed those of the US, although US; China was is second to the US in the value of services it produced. produces. Still, per capita income is below the world average. The Chinese government faces numerous economic development challenges, including: (a) reducing its high domestic savings rate and correspondingly low domestic demand; (b) sustaining adequate job growth for tens of millions of migrants and new entrants to the work force; (c) reducing corruption and other economic crimes; and (d) containing environmental damage and social strife related to the economy's rapid transformation. Economic development has progressed further in coastal provinces than in the interior, and approximately 200 million rural laborers and their dependents have relocated to urban areas to find work. One demographic consequence of the "one child" policy is that China is now one of the most rapidly aging countries in the world. Deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the north - is another long-term problem. China continues to lose arable land because of erosion and economic development. The Chinese government is seeking to add energy production capacity from sources other than coal and oil, focusing on nuclear and alternative energy development. In 2009, the global economic downturn reduced foreign demand for Chinese exports for the first time in many years, but China rebounded quickly, outperforming all other major economies in 2010 with GDP growth around 10%. The economy appears set to remain on a strong growth trajectory in 2011, lending credibility to the stimulus policies the regime rolled out during the global financial crisis. The government vows vows, in the 12th Five-Year Plan adopted in March 2011, to continue reforming the economy and emphasizes the need to increase domestic consumption in order to make the economy less dependent on exports for GDP growth in the future, but future. However, China likely will make only marginal progress toward these rebalancing goals in 2011. Two economic problems China currently faces are inflation - which, late in 2010, surpassed the government's target of 3% - and local government debt, which swelled as a result of stimulus policies, and is largely off-the-books and potentially low-quality.

Since the late 1970s China has moved from a closed, centrally planned system to a more market-oriented one that plays a major global role - in 2010 China became the world's largest exporter. Reforms began with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, creation of a diversified banking system, development of stock markets, rapid growth of the private sector, and opening to foreign trade and investment. China has implemented reforms in a gradualist fashion. In recent years, China has renewed its support for state-owned enterprises in sectors it considers important to "economic security," explicitly looking to foster globally competitive national champions. After keeping its currency tightly linked to the US dollar for years, in July 2005 China revalued its currency by 2.1% against the US dollar and moved to an exchange rate system that references a basket of currencies. From mid 2005 to late 2008 cumulative appreciation of the renminbi against the US dollar was more than 20%, but the exchange rate remained virtually pegged to the dollar from the onset of the global financial crisis until June 2010, when Beijing allowed resumption of a gradual appreciation. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2010 2012 stood as the second-largest economy in the world after the US, having surpassed Japan in 2001. The dollar values of China's agricultural and industrial output each exceed those of the US; China is second to the US in the value of services it produces. Still, per capita income is below the world average. The Chinese government faces numerous economic challenges, including: (a) reducing its high domestic savings rate and correspondingly low domestic demand; (b) sustaining adequate job growth for tens of millions of migrants and new entrants to the work force; (c) reducing corruption and other economic crimes; and (d) containing environmental damage and social strife related to the economy's rapid transformation. Economic development has progressed further in coastal provinces than in the interior, and approximately 200 by 2011 more than 250 million rural laborers migrant workers and their dependents have had relocated to urban areas to find work. One consequence of the "one child" population control policy is that China is now one of the most rapidly aging countries in the world. Deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the north North - is another long-term problem. China continues to lose arable land because of erosion and economic development. The Chinese government is seeking to add energy production capacity from sources other than coal and oil, focusing on nuclear and alternative energy development. In 2009, the global economic downturn reduced foreign demand for Chinese exports for the first time in many years, but 2010-11, China rebounded quickly, outperforming all other major economies in 2010 with faced high inflation resulting largely from its credit-fueled stimulus program. Some tightening measures appear to have controlled inflation, but GDP growth around 10%. The economy appears set consequently slowed to remain on a strong growth trajectory under 8% for 2012. An economic slowdown in 2011, lending credibility Europe contributed to China's, and is expected to further drag Chinese growth in 2013. Debt overhang from the stimulus policies the regime rolled out during the global financial crisis. program, particularly among local governments, and a property price bubble challenge policy makers currently. The government vows, in the government's 12th Five-Year Plan Plan, adopted in March 2011, to continue reforming the economy and emphasizes continued economic reforms and the need to increase domestic consumption in order to make the economy less dependent on exports for GDP growth in the future. However, China likely will make has made only marginal progress toward these rebalancing goals in 2011. Two economic problems China currently faces are inflation - which, late in 2010, surpassed the government's target of 3% - and local government debt, which swelled as a result of stimulus policies, and is largely off-the-books and potentially low-quality. goals.

Since the late 1970s China has moved from a closed, centrally planned system to a more market-oriented one that plays a major global role - in 2010 China became the world's largest exporter. Reforms began with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, creation of a diversified banking system, development of stock markets, rapid growth of the private sector, development of stock markets and a modern banking system, and opening to foreign trade and investment. China has implemented reforms in a gradualist fashion. In recent years, China has renewed its support for state-owned enterprises in sectors it considers considered important to "economic security," explicitly looking to foster globally competitive national champions. industries. After keeping its currency tightly linked to the US dollar for years, in July 2005 China revalued its currency by 2.1% against the US dollar and moved to an exchange rate system that references a basket of currencies. From mid 2005 to late 2008 cumulative appreciation of the renminbi against the US dollar was more than 20%, but the exchange rate remained virtually pegged to the dollar from the onset of the global financial crisis until June 2010, when Beijing allowed resumption of a gradual appreciation. appreciation and expanded the daily trading band within which the RMB is permitted to fluctuate. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2012 2013 stood as the second-largest economy in the world after the US, having surpassed Japan in 2001. The dollar values of China's agricultural and industrial output each exceed those of the US; China is second to the US in the value of services it produces. Still, per capita income is below the world average. The Chinese government faces numerous economic challenges, including: (a) reducing its high domestic savings rate and correspondingly low domestic demand; consumption; (b) sustaining adequate facilitating higher-wage job growth opportunities for tens of millions of the aspiring middle class, including rural migrants and new entrants to the work force; increasing numbers of college graduates; (c) reducing corruption and other economic crimes; and (d) containing environmental damage and social strife related to the economy's rapid transformation. Economic development has progressed further in coastal provinces than in the interior, and by 2011 more than 250 million migrant workers and their dependents had relocated to urban areas to find work. One consequence of population control policy is that China is now one of the most rapidly aging countries in the world. Deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the North - is another long-term problem. China continues to lose arable land because of erosion and economic development. The Chinese government is seeking to add energy production capacity from sources other than coal and oil, focusing on nuclear and alternative energy development. In 2010-11, China faced high inflation resulting largely from its credit-fueled stimulus program. Some tightening measures appear to have controlled inflation, but GDP growth consequently slowed to under 8% for 2012. An economic slowdown in Europe contributed to China's, and is expected Several factors are converging to further drag Chinese growth in 2013. Debt slow China's growth, including debt overhang from the its credit-fueled stimulus program, particularly among local governments, industrial overcapacity, inefficient allocation of capital by state-owned banks, and a property price bubble challenge policy makers currently. the slow recovery of China's trading partners. The government's 12th Five-Year Plan, adopted in March 2011, 2011 and reiterated at the Communist Party's "Third Plenum" meeting in November 2013, emphasizes continued economic reforms and the need to increase domestic consumption in order to make the economy less dependent on exports in the future. future on fixed investments, exports, and heavy industry. However, China has made only marginal progress toward these rebalancing goals. The new government of President XI Jinping has signaled a greater willingness to undertake reforms that focus on China's long-term economic health, including giving the market a more decisive role in allocating resources.

Since the late 1970s China has moved from a closed, centrally planned system to a more market-oriented one that plays a major global role - in 2010 China became the world's largest exporter. Reforms began with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, growth of the private sector, development of stock markets and a modern banking system, and opening to foreign trade and investment. China has implemented reforms in a gradualist fashion. In recent years, China has renewed its support for state-owned enterprises in sectors considered important to "economic security," explicitly looking to foster globally competitive industries. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2014 stood as the largest economy in the world, surpassing the US for the first time in modern history. Still, China's per capita income is below the world average.
After keeping its currency tightly linked to the US dollar for years, in July 2005 China moved to an exchange rate system that references a basket of currencies. From mid 2005 to late 2008 cumulative appreciation of the renminbi against the US dollar was more than 20%, but the exchange rate remained virtually pegged to the dollar from the onset of the global financial crisis until June 2010, when Beijing allowed resumption of a gradual appreciation and expanded appreciation. In 2014 the People’s Bank of China (PBOC) doubled the daily trading band within which the RMB is permitted to fluctuate. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2013 stood as the second-largest economy in the world after the US, having surpassed Japan in 2001. The dollar values of China's agricultural and industrial output each exceed those of the US; China is second to the US in the value of services it produces. Still, per capita income is below the world average.
The Chinese government faces numerous economic challenges, including: (a) reducing its high domestic savings rate and correspondingly low domestic consumption; (b) facilitating higher-wage job opportunities for the aspiring middle class, including rural migrants and increasing numbers of college graduates; (c) reducing corruption and other economic crimes; and (d) containing environmental damage and social strife related to the economy's rapid transformation. Economic development has progressed further in coastal provinces than in the interior, and by 2011 2014 more than 250 274 million migrant workers and their dependents had relocated to urban areas to find work. One consequence of population control policy is that China is now one of the most rapidly aging countries in the world. Deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the North - is another long-term problem. China continues to lose arable land because of erosion and economic development. The Chinese government is seeking to add energy production capacity from sources other than coal and oil, focusing on nuclear and alternative energy development.
Several factors are converging to slow China's growth, including debt overhang from its credit-fueled stimulus program, industrial overcapacity, inefficient allocation of capital by state-owned banks, and the slow recovery of China's trading partners. The government's 12th Five-Year Plan, adopted in March 2011 and reiterated at the Communist Party's "Third Plenum" meeting in November 2013, emphasizes continued economic reforms and the need to increase domestic consumption in order to make the economy less dependent in the future on fixed investments, exports, and heavy industry. However, China has made only marginal progress toward these rebalancing goals. The new government of President XI Jinping has signaled a greater willingness to undertake reforms that focus on China's long-term economic health, including giving the market a more decisive role in allocating resources. In 2014 China agreed to begin limiting carbon dioxide emissions by 2030. China also implemented several economic reforms in 2014, including passing legislation to allow local governments to issue bonds, opening several state-owned enterprises to further private investment, loosening the one-child policy, passing harsher pollution fines, and cutting administrative red tape.

Since the late 1970s 1970s, China has moved from a closed, centrally planned system to a more market-oriented one that plays a major global role - role; in 2010 2010, China became the world's largest exporter. Reforms began with the phasing out phaseout of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, growth of the private sector, development of stock markets and a modern banking system, and opening to foreign trade and investment. China has implemented reforms in a gradualist fashion. In recent years, China has renewed its support for state-owned enterprises in sectors considered important to "economic security," explicitly looking to foster globally competitive industries. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2014 2015 stood as the largest economy in the world, surpassing the US in 2014 for the first time in modern history. Still, China's per capita income is below the world average.
After keeping its currency tightly linked to the US dollar for years, China in July 2005 China moved to an exchange rate system that references a basket of currencies. From mid 2005 mid-2005 to late 2008 2008, cumulative appreciation of the renminbi against the US dollar was more than 20%, but the exchange rate remained virtually pegged to the dollar from the onset of the global financial crisis until June 2010, when Beijing allowed resumption of a gradual appreciation. In 2014 2015, the People’s Bank of China (PBOC) doubled announced it would continue to carefully push for full convertibility of the daily trading band within which renminbi after the RMB is permitted to fluctuate. currency was accepted as part of the IMF’s special drawing rights basket.
The Chinese government Government faces numerous economic challenges, challenges including: (a) reducing its high domestic savings rate and correspondingly low domestic consumption; (b) facilitating higher-wage job opportunities for the aspiring middle class, including rural migrants and increasing numbers of college graduates; (c) reducing corruption and other economic crimes; and (d) containing environmental damage and social strife related to the economy's rapid transformation. Economic development has progressed further in coastal provinces than in the interior, and by 2014 more than 274 million migrant workers and their dependents had relocated to urban areas to find work. One consequence of population control policy is that China is now one of the most rapidly aging countries in the world. Deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the North - is another long-term problem. China continues to lose arable land because of erosion and economic development. The Chinese government is seeking to add energy production capacity from sources other than coal and oil, focusing on nuclear and alternative energy development.
Several factors are converging to slow China's growth, including debt overhang from its credit-fueled stimulus program, industrial overcapacity, inefficient allocation of capital by state-owned banks, and the slow recovery of China's trading partners. The government's 12th 13th Five-Year Plan, adopted in March 2011 and reiterated at the Communist Party's "Third Plenum" meeting unveiled in November 2013, 2015, emphasizes continued economic reforms and the need to increase innovation and domestic consumption in order to make the economy less dependent in the future on fixed investments, exports, and heavy industry. However, China has made only marginal progress toward these rebalancing goals. The new government of President XI Jinping has signaled a greater willingness to undertake reforms that focus on China's long-term economic health, including giving the market a more decisive role in allocating resources. In 2014 2014, China agreed to begin limiting carbon dioxide emissions by 2030. China also implemented several economic reforms in 2014, including passing legislation to allow local governments to issue bonds, opening several state-owned enterprises to further private investment, loosening the one-child policy, passing harsher pollution fines, and cutting administrative red tape.

Since the late 1970s, China has moved from a closed, centrally planned system to a more market-oriented one that plays a major global role; in 2010, role. China became the world's largest exporter. has implemented reforms in a gradualist fashion, resulting in efficiency gains that have contributed to a more than tenfold increase in GDP since 1978. Reforms began with the phaseout of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, growth of the private sector, development of stock markets and a modern banking system, and opening to foreign trade and investment. China has implemented reforms in a gradualist fashion. In recent years, China has renewed its support for state-owned enterprises in sectors considered important to "economic security," explicitly looking continues to foster globally competitive industries. The restructuring pursue an industrial policy, state-support of the economy key sectors, and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. restrictive investment regime. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2015 2016 stood as the largest economy in the world, surpassing the US in 2014 for the first time in modern history. China became the world's largest exporter in 2010, and the largest trading nation in 2013. Still, China's per capita income is below the world average.
After keeping its currency tightly linked to the US dollar for years, China in July 2005 moved to an exchange rate system that references a basket of currencies. From mid-2005 to late 2008, cumulative appreciation of the renminbi appreciated more than 20% against the US dollar was more than 20%, dollar, but the exchange rate remained virtually pegged to the dollar from the onset of the global financial crisis until June 2010, when Beijing allowed resumption of a gradual appreciation. liberalization. In 2015, the People’s Bank of China announced it would continue to carefully push for full convertibility of the renminbi (RMB) after the currency was accepted as part of the IMF’s special drawing rights basket. After engaging in one-way, large-scale intervention to resist appreciation of the RMB for a decade, China’s 2016 intervention in foreign exchange markets has sought to prevent a rapid RMB depreciation that would have negative consequences for the United States, China, and the global economy.
China’s economic growth has slowed since 2011. The Chinese Government faces numerous economic challenges including: (a) reducing its high domestic savings rate and correspondingly low domestic household consumption; (b) servicing its high corporate debt burdens to maintain financial stability; (c) facilitating higher-wage job opportunities for the aspiring middle class, including rural migrants and increasing numbers of college graduates; (c) reducing corruption and other economic crimes; and graduates, while maintaining competitiveness; (d) containing environmental damage dampening speculative investment in the real estate sector; (e) reducing industrial overcapacity; and social strife related to (f) raising productivity growth rates through the economy's rapid transformation. more efficient allocation of capital. Economic development has progressed further in coastal provinces than in the interior, and by 2014 2016 more than 274 169.3 million migrant workers and their dependents had relocated to urban areas to find work. One consequence of China’s population control policy known as the “one-child policy” - which was relaxed in 2016 to permit all families to have two children - is that China is now one of the most rapidly aging countries in the world. Deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the North - is another long-term problem. China continues to lose arable land because of erosion and economic development. urbanization. The Chinese government is seeking to add energy production capacity from sources other than coal and oil, focusing on nuclear natural gas, nuclear, and alternative clean energy development.
Several factors are converging In 2016, China ratified the Paris Agreement, a multilateral agreement to slow China's growth, including debt overhang from combat climate change, and committed to peak its credit-fueled stimulus program, industrial overcapacity, inefficient allocation of capital by state-owned banks, carbon dioxide emissions between 2025 and the slow recovery of China's trading partners. 2030.
The government's 13th Five-Year Plan, unveiled in November 2015, March 2016, emphasizes continued economic reforms and the need to increase innovation and boost domestic consumption in order to make the economy less dependent in the future on fixed investments, government investment, exports, and heavy industry. However, China has made only marginal progress toward these rebalancing goals. The new government of Under President XI Jinping Jinping, Beijing has signaled a greater willingness to undertake reforms its understanding that focus on China's long-term economic health, including health depends on giving the market a more decisive role in allocating resources. resources, but has moved slowly on market-oriented reforms because of potential negative consequences for stability and short-term economic growth. He has also increased state-control over key sectors and Party control over state-owned enterprises. Chinese leaders in 2010 pledged to double China’s GDP by 2020, and the 13th Five Year Plan includes annual economic growth targets of at least 6.5% through 2020 to achieve that goal. In 2014, recent years, China agreed has renewed its support for state-owned enterprises in sectors considered important to begin limiting carbon dioxide emissions "economic security," explicitly looking to foster globally competitive industries. Chinese leaders also have undermined some market-oriented reforms by 2030. reaffirming the “dominant” role of the state in the economy, a stance that threatens to discourage private initiative and make the economy less efficient over time.

Since the late 1970s, China has moved from a closed, centrally planned system to a more market-oriented one that plays a major global role. China has implemented reforms in a gradualist fashion, resulting in efficiency gains that have contributed to a more than tenfold increase in GDP since 1978. Reforms began with the phaseout of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, growth of the private sector, development of stock markets and a modern banking system, and opening to foreign trade and investment. China continues to pursue an industrial policy, state-support state support of key sectors, and a restrictive investment regime. From 2013 to 2017, China had one of the fastest growing economies in the world, averaging slightly more than 7% real growth per year. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2016 2017 stood as the largest economy in the world, surpassing the US in 2014 for the first time in modern history. China became the world's largest exporter in 2010, and the largest trading nation in 2013. Still, China's per capita income is below the world average.
After keeping its currency tightly linked to the US dollar for years, China in In July 2005 moved to an exchange rate system that references a basket of currencies. From mid-2005 to late 2008, the renminbi (RMB) appreciated more than 20% against the US dollar, but the exchange rate remained virtually pegged to the dollar from the onset of the global financial crisis until June 2010, when Beijing allowed resumption of announced it would resume a gradual liberalization. appreciation. From 2013 until early 2015, the renminbi held steady against the dollar, but it depreciated 13% from mid-2015 until end-2016 amid strong capital outflows; in 2017 the RMB resumed appreciating against the dollar – roughly 7% from end-of-2016 to end-of-2017. In 2015, the People’s Bank of China announced it would continue to carefully push for full convertibility of the renminbi (RMB) renminbi, after the currency was accepted as part of the IMF’s special drawing rights basket. After engaging in one-way, large-scale intervention to resist appreciation of However, since late 2015 the RMB for a decade, China’s 2016 intervention in foreign exchange markets Chinese Government has sought strengthened capital controls and oversight of overseas investments to prevent a rapid RMB depreciation that would have negative consequences for better manage the United States, China, exchange rate and the global economy.
China’s economic growth has slowed since 2011. maintain financial stability. The Chinese Government faces numerous economic challenges including: (a) reducing its high domestic savings rate and correspondingly low domestic household consumption; (b) servicing managing its high corporate debt burdens burden to maintain financial stability; (c) controlling off-balance sheet local government debt used to finance infrastructure stimulus; (d) facilitating higher-wage job opportunities for the aspiring middle class, including rural migrants and college graduates, while maintaining competitiveness; (d) (e) dampening speculative investment in the real estate sector; (e) sector without sharply slowing the economy; (f) reducing industrial overcapacity; and (f) (g) raising productivity growth rates through the more efficient allocation of capital. capital and state-support for innovation. Economic development has progressed further in coastal provinces than in the interior, and by 2016 more than 169.3 million migrant workers and their dependents had relocated to urban areas to find work. One consequence of China’s population control policy known as the “one-child policy” "one-child policy" - which was relaxed in 2016 to permit all families to have two children - is that China is now one of the most rapidly aging countries in the world. Deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the North - is another long-term problem. China continues to lose arable land because of erosion and urbanization. The Chinese government Government is seeking to add energy production capacity from sources other than coal and oil, focusing on natural gas, nuclear, and clean energy development. In 2016, China ratified the Paris Agreement, a multilateral agreement to combat climate change, and committed to peak its carbon dioxide emissions between 2025 and 2030.
The government's 13th Five-Year Plan, unveiled in March 2016, emphasizes the need to increase innovation and boost domestic consumption to make the economy less dependent on government investment, exports, and heavy industry. However, China has made only marginal more progress toward these on subsidizing innovation than rebalancing goals. Under President XI Jinping, the economy. Beijing has signaled its understanding that China's long-term economic health depends on committed to giving the market a more decisive role in allocating resources, but has moved slowly on market-oriented reforms because of potential negative consequences for stability and short-term economic growth. He has also increased state-control over key sectors and Party control over the Chinese Government’s policies continue to favor state-owned enterprises. enterprises and emphasize stability. Chinese leaders in 2010 pledged to double China’s GDP by 2020, and the 13th Five Year Plan includes annual economic growth targets of at least 6.5% through 2020 to achieve that goal. In recent years, China has renewed its support for state-owned enterprises in sectors considered important to "economic security," explicitly looking to foster globally competitive industries. Chinese leaders also have undermined some market-oriented reforms by reaffirming the “dominant” "dominant" role of the state in the economy, a stance that threatens to discourage private initiative and make the economy less efficient over time. The slight acceleration in economic growth in 2017—the first such uptick since 2010—gives Beijing more latitude to pursue its economic reforms, focusing on financial sector deleveraging and its Supply-Side Structural Reform agenda, first announced in late 2015.

Since the late 1970s, China has moved from a closed, centrally planned system to a more market-oriented one that plays a major global role. China has implemented reforms in a gradualist fashion, resulting in efficiency gains that have contributed to a more than tenfold increase in GDP since 1978. Reforms began with the phaseout of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, growth of the private sector, development of stock markets and a modern banking system, and opening to foreign trade and investment. China continues to pursue an industrial policy, state support of key sectors, and a restrictive investment regime. From 2013 to 2017, China had one of the fastest growing economies in the world, averaging slightly more than 7% real growth per year. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2017 stood as the largest economy in the world, surpassing the US in 2014 for the first time in modern history. China became the world's largest exporter in 2010, and the largest trading nation in 2013. Still, China's per capita income is below the world average.
In July 2005 moved to an exchange rate system that references a basket of currencies. From mid-2005 to late 2008, the renminbi (RMB) appreciated more than 20% against the US dollar, but the exchange rate remained virtually pegged to the dollar from the onset of the global financial crisis until June 2010, when Beijing announced it would resume a gradual appreciation. From 2013 until early 2015, the renminbi held steady against the dollar, but it depreciated 13% from mid-2015 until end-2016 amid strong capital outflows; in 2017 the RMB resumed appreciating against the dollar – roughly 7% from end-of-2016 to end-of-2017. In 2015, the People’s Bank of China announced it would continue to carefully push for full convertibility of the renminbi, after the currency was accepted as part of the IMF’s special drawing rights basket. However, since late 2015 the Chinese Government has strengthened capital controls and oversight of overseas investments to better manage the exchange rate and maintain financial stability.
The Chinese Government faces numerous economic challenges including: (a) reducing its high domestic savings rate and correspondingly low domestic household consumption; (b) managing its high corporate debt burden to maintain financial stability; (c) controlling off-balance sheet local government debt used to finance infrastructure stimulus; (d) facilitating higher-wage job opportunities for the aspiring middle class, including rural migrants and college graduates, while maintaining competitiveness; (e) dampening speculative investment in the real estate sector without sharply slowing the economy; (f) reducing industrial overcapacity; and (g) raising productivity growth rates through the more efficient allocation of capital and state-support for innovation. Economic development has progressed further in coastal provinces than in the interior, and by 2016 more than 169.3 million migrant workers and their dependents had relocated to urban areas to find work. One consequence of China’s population control policy known as the "one-child policy" - which was relaxed in 2016 to permit all families to have two children - is that China is now one of the most rapidly aging countries in the world. Deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the North - is another long-term problem. China continues to lose arable land because of erosion and urbanization. The Chinese Government is seeking to add energy production capacity from sources other than coal and oil, focusing on natural gas, nuclear, and clean energy development. In 2016, China ratified the Paris Agreement, a multilateral agreement to combat climate change, and committed to peak its carbon dioxide emissions between 2025 and 2030.
The government's 13th Five-Year Plan, unveiled in March 2016, emphasizes the need to increase innovation and boost domestic consumption to make the economy less dependent on government investment, exports, and heavy industry. However, China has made more progress on subsidizing innovation than rebalancing the economy. Beijing has committed to giving the market a more decisive role in allocating resources, but the Chinese Government’s policies continue to favor state-owned enterprises and emphasize stability. Chinese leaders in 2010 pledged to double China’s GDP by 2020, and the 13th Five Year Plan includes annual economic growth targets of at least 6.5% through 2020 to achieve that goal. In recent years, China has renewed its support for state-owned enterprises in sectors considered important to "economic security," explicitly looking to foster globally competitive industries. Chinese leaders also have undermined some market-oriented reforms by reaffirming the "dominant" role of the state in the economy, a stance that threatens to discourage private initiative and make the economy less efficient over time. The slight acceleration in economic growth in 2017—the first such uptick since 2010—gives Beijing more latitude to pursue its economic reforms, focusing on financial sector deleveraging and its Supply-Side Structural Reform agenda, first announced in late 2015.

Since the late 1970s, China has moved from a closed, centrally planned system to a more market-oriented one that plays a major global role. China has implemented reforms in a gradualist fashion, resulting in efficiency gains that have contributed to a more than tenfold increase in GDP since 1978. Reforms began with the phaseout of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, growth of the private sector, development of stock markets and a modern banking system, and opening to foreign trade and investment. China continues to pursue an industrial policy, state support of key sectors, and a restrictive investment regime. From 2013 to 2017, China had one of the fastest growing economies in the world, averaging slightly more than 7% real growth per year. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2017 stood as the largest economy in the world, surpassing the US in 2014 for the first time in modern history. China became the world's largest exporter in 2010, and the largest trading nation in 2013. Still, China's per capita income is below the world average.
In July 2005 moved to an exchange rate system that references a basket of currencies. From mid-2005 to late 2008, the renminbi (RMB) appreciated more than 20% against the US dollar, but the exchange rate remained virtually pegged to the dollar from the onset of the global financial crisis until June 2010, when Beijing announced it would resume a gradual appreciation. From 2013 until early 2015, the renminbi held steady against the dollar, but it depreciated 13% from mid-2015 until end-2016 amid strong capital outflows; in 2017 the RMB resumed appreciating against the dollar – roughly 7% from end-of-2016 to end-of-2017. In 2015, the People’s Bank of China announced it would continue to carefully push for full convertibility of the renminbi, after the currency was accepted as part of the IMF’s special drawing rights basket. However, since late 2015 the Chinese Government Beijing has strengthened capital controls and oversight of overseas investments to better manage the exchange rate and maintain financial stability.
The Chinese Government Beijing faces numerous economic challenges including: (a) reducing its high domestic savings rate and correspondingly low domestic household consumption; (b) managing its high corporate debt burden to maintain financial stability; (c) controlling off-balance sheet local government debt used to finance infrastructure stimulus; (d) facilitating higher-wage job opportunities for the aspiring middle class, including rural migrants and college graduates, while maintaining competitiveness; (e) dampening speculative investment in the real estate sector without sharply slowing the economy; (f) reducing industrial overcapacity; and (g) raising productivity growth rates through the more efficient allocation of capital and state-support for innovation. Economic development has progressed further in coastal provinces than in the interior, and by 2016 more than 169.3 million migrant workers and their dependents had relocated to urban areas to find work. One consequence of China’s population control policy known as the "one-child policy" - which was relaxed in 2016 to permit all families to have two children - is that China is now one of the most rapidly aging countries in the world. Deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the North - is another long-term problem. China continues to lose arable land because of erosion and urbanization. The Chinese Government Beijing is seeking to add energy production capacity from sources other than coal and oil, focusing on natural gas, nuclear, and clean energy development. In 2016, China ratified the Paris Agreement, a multilateral agreement to combat climate change, and committed to peak its carbon dioxide emissions between 2025 and 2030.
The government's 13th Five-Year Plan, unveiled in March 2016, emphasizes the need to increase innovation and boost domestic consumption to make the economy less dependent on government investment, exports, and heavy industry. However, China has made more progress on subsidizing innovation than rebalancing the economy. Beijing has committed to giving the market a more decisive role in allocating resources, but the Chinese Government’s its policies continue to favor state-owned enterprises and emphasize stability. Chinese leaders Beijing in 2010 pledged to double China’s GDP by 2020, and the 13th Five Year Plan includes annual economic growth targets of at least 6.5% through 2020 to achieve that goal. In recent years, China has renewed its support for state-owned enterprises in sectors considered important to "economic security," explicitly looking to foster globally competitive industries. Chinese leaders Beijing also have has undermined some market-oriented reforms by reaffirming the "dominant" role of the state in the economy, a stance that threatens to discourage private initiative and make the economy less efficient over time. The slight acceleration in economic growth in 2017—the first such uptick since 2010—gives Beijing more latitude to pursue its economic reforms, focusing on financial sector deleveraging and its Supply-Side Structural Reform agenda, first announced in late 2015.