Economy - overview 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 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 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 2001, with its 1.27 billion people but a GDP of just $4,300 per capita, China stood as the 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 often experienced in its hybrid system the worst results of socialism (bureaucracy and lassitude) and of capitalism (windfall gains and 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 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. Beijing 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 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%.

GDP purchasing power parity - $5.56 trillion (2001 est.)

GDP - real growth rate 7.3% (official estimate) (2001 est.)

GDP - per capita purchasing power parity - $4,300 (2001 est.)

GDP - composition by sector
agriculture: 17.7%
industry: 49.3%
services: 33% (2001 est.)

Population below poverty line 10% (2001 est.)

Household income or consumption by percentage share
lowest 10%: 2.4%
highest 10%: 30.4% (1998)

Distribution of family income - Gini index 40 (2001)

Inflation rate (consumer prices) 0.8% (2001 est.)

Labor force 706 million (2000 est.)

Labor force - by occupation agriculture 50%, industry 23%, services 27% (2001 est.)

Unemployment rate urban unemployment roughly 10%; substantial unemployment and underemployment in rural areas (2001 est.)

Budget
revenues: $161.8 billion
expenditures: $191.8 billion, including capital expenditures of $NA (2000)

Industries iron and steel, coal, machine building, armaments, textiles and apparel, petroleum, cement, chemical fertilizers, footwear, toys, food processing, automobiles, consumer electronics, telecommunications

Industrial production growth rate 9.9% (2001 est.)

Electricity - production 1.308 trillion kWh (2000)

Electricity - production by source
fossil fuel: 81.83%
hydro: 16.83%
other: 0.12% (2000)
nuclear: 1.22%

Electricity - consumption 1.206 trillion kWh (2000)

Electricity - exports 10.25 billion kWh (2000)

Electricity - imports 400 million kWh (2000)

Agriculture - products rice, wheat, potatoes, sorghum, peanuts, tea, millet, barley, cotton, oilseed; pork; fish

Exports $262.1 billion (f.o.b., 2001 est.)

Exports - commodities machinery and equipment; textiles and clothing, footwear, toys and sporting goods; mineral fuels

Exports - partners US 21%, Hong Kong 18%, Japan 17%, South Korea, Germany, Netherlands, UK, Singapore, Taiwan (2000)

Imports $236.2 billion (f.o.b., 2001 est.)

Imports - commodities machinery and equipment, mineral fuels, plastics, iron and steel, chemicals

Imports - partners Japan 18%, Taiwan 11%, South Korea 10%, US 10% Germany, Hong Kong, Russia, Malaysia (2000)

Debt - external $167 billion (2001 est.)

Economic aid - recipient $NA

Currency yuan (CNY)

Currency code CNY

Exchange rates yuan per US dollar - 8.2767 (January 2002), 8.2771 (2001), 8.2785 (2000), 8.2783 (1999), 8.2790 (1998), 8.2898 (1997)

Fiscal year calendar year

NOTE: The information regarding China on this page is re-published from the 2002 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of China Economy 2002 information contained here. All suggestions for corrections of any errors about China Economy 2002 should be addressed to the CIA.