Friday, July 27, 2007
[IWS] CRS: CHINA'S ECONOMIC CONDITIONS [13 July 2007]
IWS Documented News Service
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Congressional Research Service (CRS)
China's Economic Conditions
Updated July 13, 2007
Wayne M. Morrison, Specialist in International Trade and Finance
Foreign Affairs, Defense, and Trade Division
http://www.fas.org/sgp/crs/row/RL33534.pdf
[full-text, 29 pages]
Summary
Since the initiation of economic reforms in 1979, China has become one of the
world's fastest-growing economies. From 1979 to 2005 China's real gross domestic
product (GDP) grew at an average annual rate of 9.7%. Real GDP grew by 11.1%
in 2006, and during the first quarter of 2007, it rose by 11.1% over the same period
in 2006. China is expected to continue to enjoy rapid economic growth over the next
several years, provided that it continues to implement needed reforms, particularly
in regard to its inefficient state-owned enterprises and the state banking system. If
projected growth levels continue, China could become the world's largest economy
within a decade or so.
Trade and foreign investment continues to play a major role in China's booming
economy. In 2006, exports rose by 27% to $969 billion, while imports were up by
20% to $792 billion. This produced an trade surplus of about $177 billion. From
2003 to 2006, the value of total Chinese trade doubled. On the basis of current
trends, China could surpass the United States in 2007 to become the second largest
merchandise exporter (after the European Union). Well over half of China's trade
is conducted by foreign firms operating in China. The combination of trade
surpluses, foreign direct investment flows, and large-scale purchases of foreign
currency have helped make China the world's largest holder of foreign exchange
reserves at $1.3 trillion as of June 2007.
Although the economy has shown remarkable growth in recent years, Chinese
officials have expressed concern over a number of areas that they perceive as
threatening future growth, including rising inflation, over-dependence on exports and
fixed investment for growth, widening income gaps, and growing pollution. The
government has indicated its goal over the coming years to create a "harmonious
society" that would promote more economic balanced growth and address a number
of economic and social issues.
China's economy continues to be a concern to many U.S. policymakers. On the
one hand, U.S. consumers, exporters, and investors have greatly benefitted from
China's rapid economic and trade growth. On the other hand, the surge in Chinese
exports to the United States has put competitive pressures on various U.S. industries.
Many U.S. policymakers have argued that China often does not play by the rules
when it comes to trade and they have called for greater efforts to pressure China to
fully implement its World Trade Organization (WTO) commitments and to change
various economic policies deemed harmful to U.S. economic interests, such as its
currency policy, its use of subsidies to support state-owned firms, and trade and
investment barriers to U.S. goods and services. In addition, China's rising demand
for energy and raw materials has raised prices for such commodities and has sharply
increased pollution levels, which may have important global implications.
This report provides an overview of China's economic development, challenges
China faces to maintain growth, and the implications of China's rise as a major
economic power for the United States. This report will be updated as events warrant.
Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
An Overview of China's Economic Development . . . . . . . . . . . . . . . . . . . . . . . . 2
China's Economy Prior to Reforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
The Introduction of Economic Reforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
China's Economic Growth Since Reforms: 1979-Present . . . . . . . . . . . . . . 3
Causes of China's Economic Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
China's Industrial Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Measuring the Size of China's Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Foreign Direct Investment in China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
China's Trade Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
China's Major Trading Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Major Chinese Trade Commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
China's Growing Trade with Africa and Latin America . . . . . . . . . . . . . . . 15
Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Latin America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
China's Trade with North Korea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Major Long-Term Challenges Facing the Chinese Economy . . . . . . . . . . . . . . . 20
Outlook for China's Economy and Implications for the United States . . . . . . . . 23
List of Figures
Figure 1. China's Foreign Exchange Reserves: 1996-June 2007 . . . . . . . . . . . . 10
List of Tables
Table 1. China's Average Annual Real GDP Growth: 1960-2007 . . . . . . . . . . . 4
Table 2. Major Chinese Industries Based on Value-Added Output:
1995 and 2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Table 3. Comparisons of U.S., Japanese, and Chinese GDP and Per Capita
GDP in Nominal U.S. Dollars and PPP, 2006 . . . . . . . . . . . . . . . . . . . . . . . . 7
Table 4. Major Foreign Investors in China: 1979-2006 . . . . . . . . . . . . . . . . . . . . 8
Table 5. Foreign Direct Investment by Sectors in 2006 . . . . . . . . . . . . . . . . . . . . . 8
Table 6. China's Merchandise World Trade, 1979-2006 . . . . . . . . . . . . . . . . . . . 9
Table 7. Monthly U.S. and Chinese Total Merchandise Exports:
August 2006-May 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Table 8. China's Major Trading Partners: 2006 . . . . . . . . . . . . . . . . . . . . . . . . 12
Table 9. Top 10 Chinese Exports: 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Table 10. Top 10 Chinese Imports: 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Table 11. Top 5 African Sources of Chinese Imports: 2004-2006 . . . . . . . . . . . 16
Table 12. Top Five Chinese Imports from Africa: 2004-2006 . . . . . . . . . . . . . . 16
Table 13. China's Top 5 Export Markets: 2004-2006 . . . . . . . . . . . . . . . . . . . . 16
Table 14. Top 5 Chinese Exports to Africa: 2004-2006 . . . . . . . . . . . . . . . . . . 17
Table 15. China's Top 5 Latin American Import Partners: 2004-2006 . . . . . . . 18
Table 16. China's Top Five Imports From Latin America: 2004-2006 . . . . . . . 18
Table 17. China's Top 5 Latin American Export Markets: 2004-2006 . . . . . . . 18
Table 18. China's Top 5 Imports From Latin America: 2004-2006 . . . . . . . . . . 19
Table 19. Major Chinese Exports to North Korea: 2003-2006 . . . . . . . . . . . . . 20
Table 20. Major Chinese Imports From North Korea: 2003-2006 . . . . . . . . . . . 20
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Congressional Research Service (CRS)
China's Economic Conditions
Updated July 13, 2007
Wayne M. Morrison, Specialist in International Trade and Finance
Foreign Affairs, Defense, and Trade Division
http://www.fas.org/sgp/crs/row/RL33534.pdf
[full-text, 29 pages]
Summary
Since the initiation of economic reforms in 1979, China has become one of the
world's fastest-growing economies. From 1979 to 2005 China's real gross domestic
product (GDP) grew at an average annual rate of 9.7%. Real GDP grew by 11.1%
in 2006, and during the first quarter of 2007, it rose by 11.1% over the same period
in 2006. China is expected to continue to enjoy rapid economic growth over the next
several years, provided that it continues to implement needed reforms, particularly
in regard to its inefficient state-owned enterprises and the state banking system. If
projected growth levels continue, China could become the world's largest economy
within a decade or so.
Trade and foreign investment continues to play a major role in China's booming
economy. In 2006, exports rose by 27% to $969 billion, while imports were up by
20% to $792 billion. This produced an trade surplus of about $177 billion. From
2003 to 2006, the value of total Chinese trade doubled. On the basis of current
trends, China could surpass the United States in 2007 to become the second largest
merchandise exporter (after the European Union). Well over half of China's trade
is conducted by foreign firms operating in China. The combination of trade
surpluses, foreign direct investment flows, and large-scale purchases of foreign
currency have helped make China the world's largest holder of foreign exchange
reserves at $1.3 trillion as of June 2007.
Although the economy has shown remarkable growth in recent years, Chinese
officials have expressed concern over a number of areas that they perceive as
threatening future growth, including rising inflation, over-dependence on exports and
fixed investment for growth, widening income gaps, and growing pollution. The
government has indicated its goal over the coming years to create a "harmonious
society" that would promote more economic balanced growth and address a number
of economic and social issues.
China's economy continues to be a concern to many U.S. policymakers. On the
one hand, U.S. consumers, exporters, and investors have greatly benefitted from
China's rapid economic and trade growth. On the other hand, the surge in Chinese
exports to the United States has put competitive pressures on various U.S. industries.
Many U.S. policymakers have argued that China often does not play by the rules
when it comes to trade and they have called for greater efforts to pressure China to
fully implement its World Trade Organization (WTO) commitments and to change
various economic policies deemed harmful to U.S. economic interests, such as its
currency policy, its use of subsidies to support state-owned firms, and trade and
investment barriers to U.S. goods and services. In addition, China's rising demand
for energy and raw materials has raised prices for such commodities and has sharply
increased pollution levels, which may have important global implications.
This report provides an overview of China's economic development, challenges
China faces to maintain growth, and the implications of China's rise as a major
economic power for the United States. This report will be updated as events warrant.
Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
An Overview of China's Economic Development . . . . . . . . . . . . . . . . . . . . . . . . 2
China's Economy Prior to Reforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
The Introduction of Economic Reforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
China's Economic Growth Since Reforms: 1979-Present . . . . . . . . . . . . . . 3
Causes of China's Economic Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
China's Industrial Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Measuring the Size of China's Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Foreign Direct Investment in China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
China's Trade Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
China's Major Trading Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Major Chinese Trade Commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
China's Growing Trade with Africa and Latin America . . . . . . . . . . . . . . . 15
Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Latin America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
China's Trade with North Korea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Major Long-Term Challenges Facing the Chinese Economy . . . . . . . . . . . . . . . 20
Outlook for China's Economy and Implications for the United States . . . . . . . . 23
List of Figures
Figure 1. China's Foreign Exchange Reserves: 1996-June 2007 . . . . . . . . . . . . 10
List of Tables
Table 1. China's Average Annual Real GDP Growth: 1960-2007 . . . . . . . . . . . 4
Table 2. Major Chinese Industries Based on Value-Added Output:
1995 and 2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Table 3. Comparisons of U.S., Japanese, and Chinese GDP and Per Capita
GDP in Nominal U.S. Dollars and PPP, 2006 . . . . . . . . . . . . . . . . . . . . . . . . 7
Table 4. Major Foreign Investors in China: 1979-2006 . . . . . . . . . . . . . . . . . . . . 8
Table 5. Foreign Direct Investment by Sectors in 2006 . . . . . . . . . . . . . . . . . . . . . 8
Table 6. China's Merchandise World Trade, 1979-2006 . . . . . . . . . . . . . . . . . . . 9
Table 7. Monthly U.S. and Chinese Total Merchandise Exports:
August 2006-May 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Table 8. China's Major Trading Partners: 2006 . . . . . . . . . . . . . . . . . . . . . . . . 12
Table 9. Top 10 Chinese Exports: 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Table 10. Top 10 Chinese Imports: 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Table 11. Top 5 African Sources of Chinese Imports: 2004-2006 . . . . . . . . . . . 16
Table 12. Top Five Chinese Imports from Africa: 2004-2006 . . . . . . . . . . . . . . 16
Table 13. China's Top 5 Export Markets: 2004-2006 . . . . . . . . . . . . . . . . . . . . 16
Table 14. Top 5 Chinese Exports to Africa: 2004-2006 . . . . . . . . . . . . . . . . . . 17
Table 15. China's Top 5 Latin American Import Partners: 2004-2006 . . . . . . . 18
Table 16. China's Top Five Imports From Latin America: 2004-2006 . . . . . . . 18
Table 17. China's Top 5 Latin American Export Markets: 2004-2006 . . . . . . . 18
Table 18. China's Top 5 Imports From Latin America: 2004-2006 . . . . . . . . . . 19
Table 19. Major Chinese Exports to North Korea: 2003-2006 . . . . . . . . . . . . . 20
Table 20. Major Chinese Imports From North Korea: 2003-2006 . . . . . . . . . . . 20
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
# posted by SBasefsky : 6:08 AM
