 Shanghai, thefinancial center of China | |
| Currency | Renminbi (CNY,¥) |
|---|---|
| Calendar year | |
Trade organizations | WTO,BRICS,SCO,APEC,RCEP,G20,G77 and others |
Country group | |
| Statistics | |
| Population |  1,408,050,000 (2024)[4] |
| GDP | |
| GDP rank | |
GDP growth | |
GDP per capita | |
GDP per capita rank | |
GDP by sector |
|
GDP by component |
|
| 1.0% (2024)[7] | |
Population belowpoverty line |  21% on less than $8.30/day (2021)[8] |
 36.0medium (2022)[9][note 1] | |
| |
 43 out of 100 points (2024)[11] (rank 76th) | |
Labor force | |
Labor force by occupation |
|
| Unemployment | |
Average gross salary | US$ 1,453 (urban non-private sector) US$ 813 (urban private sector) per month (2024) |
| US$ 1,026 (urban non-private sector) US$ 580 (urban private sector) per month (2024) | |
| 56.6% of GDP (2024)[6] | |
Grosscapital formation | 40.6% of GDP (2024)[6] |
| Gross savings | 43.46% of GDP (2024)[16] |
| 10-Year Bond 2.831% (April 2023)[17] | |
Main industries |
|
| External | |
| Exports | $3.577 trillion (2024)[20] |
Export goods |
|
Main export partners |
|
| Imports | $2.586 trillion (2024)[20] |
Import goods |
|
Main import partners |
|
FDI stock | |
Grossexternal debt | $2.45 trillion (March 2025) |
| Public finances | |
| |
| $3.3 trillion (2023)[23][24] (1st) | |
| |
| Revenues | ¥33.229 trillion[16] 26.5% of GDP (2023) |
| Expenses | ¥42.140 trillion[16] 33.6% of GDP (2023) |
All values, unless otherwise stated, are inUS dollars. | |
ThePeople's Republic of China has adevelopingmixedsocialist market economy, incorporatingindustrial policies and strategicfive-year plans.[29] China has theworld's second-largest economy by nominal GDP and since 2016 has been theworld's largest economy when measured bypurchasing power parity (PPP).[30][note 2] China accounted for 19% of theglobal economy in 2022 in PPP terms,[31] and around 18% in nominal terms in 2022.[31][32] The economy consists ofstate-owned enterprises (SOEs) and mixed-ownership enterprises, as well as a large domestic private sector which contribute approximately 60% of the GDP, 80% of urban employment and 90% of new jobs.
China is the world'slargest manufacturing industrial economy andexporter of goods. China is widely regarded as the "powerhouse of manufacturing", "the factory of the world" and the world's "manufacturing superpower".[33] Its production exceeds that of the nine next largest manufacturers combined.[34][35][36] However,exports as a percentage of GDP have steadily dropped to just around 20%, reflecting its decreasing importance to the Chinese economy. Nevertheless, it remains the largest trading nation in the world and plays a prominent role ininternational trade.[37][38] Manufacturing has been transitioning toward high-tech industries such aselectric vehicles,renewable energy,telecommunications andIT equipment, and services has also grown as a percentage of GDP. However, recent research indicates that China’sTotal factor productivity (TFP) growth has slowed significantly. IMF estimates show that TFP growth declined from approximately 3.7% in the 2000s to around 1.9% during 2010–2019.[39] Structural reforms and technological progress in manufacturing between 2010 and 2020 contributed only modestly to productivity gains. Additionally, a 2024–2025IMF working paper finds that factor misallocation resulting from industrial and regulatory policies implemented since the early 2010s reduces China’s aggregate TFP by roughly 1.2% annually.[40] IMF research suggests that while China’s state-led push for high-tech self-reliance since 2013 has supported rapid innovation, it has been accompanied by efficiency losses. Policy measures, including targeted state subsidies appear to favor politically connected firms, crowd out competition, and lead to overcapacity, undermining overall productivity.[41] China is the world's largesthigh technology exporter.[42] As of 2023[update], the country spendsaround 2.6% of GDP to advanceresearch and development across various sectors of the economy.[43] It is also the world'ssecond-largest importer of goods.[44] China is a net importer of services products.[45]
China has a network offree trade agreements withseveral countries, thoughRegional Comprehensive Economic Partnership (RCEP) accounts for the bulk of its trade integration.[46] Of the world's500 largest companies, 142 are headquartered in China.[47] It has three of the world's top tenmost competitive financial centers[48] and three of the world's tenlargest stock exchanges (both bymarket capitalization and bytrade volume).[49] China has thesecond-largest financial assets in the world, valued at $17.9 trillion as of 2021.[50] China was the largest recipient offoreign direct investment (FDI) in the world as of 2020, receiving inflows of $163 billion.[51] but more recently, inbound FDI has fallen sharply to negative levels.[52][53] It has the thirdlargest outbound FDI, at US$192.20 billion for 2024.[54] China's economic growth is stagnating in the 2020s as it deals with a range of challenges from arapidly aging population,higher youth unemployment and aproperty crisis.[55]
With 773 million workers, the Chineselabor force isthe world's largest as of 2024, although it's shrinking rapidly.[56] As of 2025, China was second in the world intotal number of billionaires,[57] although this number has been falling since its peak around 2020,[58][59] and second in millionaires with 4.1 million according to statistia.[60]Public social expenditure in China was around 10% of GDP.[61]
Historically, China was one of theworld's foremost economic powers for most of the two-millenniaPax Sinica fromthe 1st until the 19th century.[63][64] China accounted for around one-quarter to one-third of global GDP until the mid-1800s. China's share of global GDP was one-third in 1820 as the Industrial Revolution was beginning in Great Britain.[65][66][67][68] China's GDP in 1820 was six times as large as Britain's, the largest economy in Europe – and almost twenty times the GDP of the nascent United States.[69]
At the end of theChinese Civil War, the economy was devastated.[70] As the defeatedNationalists fled to Taiwan, they stripped China of liquid assets including gold, silver, and the country'sdollar reserves.[70] By the time the KMT was defeated, commerce had been destroyed, the national currency rendered valueless, and the economy was based on barter.[70]
The People's Republic of China's development from one of the poorest countries to one of the largest economies was the quickest of any country.[71]: 11 From 1949 until theChinese economic reform in 1978, a self-sufficient and self-reliant economy was established that was state-led and focused on rapid industrialization with market activity remaining underground.[72][73] Economic reforms began underDeng Xiaoping.[73] China subsequently became the world'sfastest-growing major economy, withgrowth rates averaging 10% over 30 years.[74][75] Many scholars consider theChinese economic model as an example ofauthoritarian capitalism,[76][77]state capitalism[78] orparty-state capitalism under thegeneral secretaryship of Xi Jinping.[79][80]
China brought more people out of extremepoverty than any other country in history[81][82]—between 1978 and 2018, China reduced extreme poverty by 800 million.[83] Between 1981 and 2019, the percentage of the population living inextreme poverty decreased from 88.1% to 0.2%.[84] Itscurrent account surplus increased by a factor of 53 between 1982 and 2021, from $5.67 billion to $317 billion.[85] During this time, China also became an industrial powerhouse, moving beyond initial successes in low-wage sectors likeclothing andfootwear to the increasingly sophisticated production ofcomputers,pharmaceuticals, andautomobiles. China's factories generated $3.7 trillion real manufacturing value added, more than the US, South Korea, Germany and the UK combined. China's manufacturing sector benefits from one of the world's largest domestic markets, immense manufacturing scale, and highly developed manufacturing supply chains.[86] It also has two (Shenzhen-Hong Kong-Guangzhou andBeijing in the 2nd and 3rd spots respectively) of the global top 5 science and technology clusters, which is more than any other country.[87][88]
China has sustained growth due to export relations, itsmanufacturing sector, and low-wage workers.[89] China's was the only major world economy to experience GDP growth in 2020, when its GDP increased by 2.3%.[90] However, it posted one of its worst economic performances in decades because of theCOVID-19 pandemic in 2022.[91] In 2023,IMF predicted China to continue being one of the fastest growing major economies.[92] China's economy is both a contributor to rising global greenhouse gas (GHG) emissions causing climate change and severelyaffected by its adverse impacts, although its per capita emissions are still much lower than developed economies such as the United States.[93]
China's unequaltransportation system, combined with important differences in the availability ofnatural andhuman resources and in industrialinfrastructure, has produced significant variations in the regional economies of China.[94] The economic development ofShenzhen has caused the city to be referred to as the world's nextSilicon Valley.[95][96]
Economic development has generally been more rapid incoastal provinces than in the interior and there are large disparities inper capita income between regions. The three wealthiest regions are theYangtze Delta in East China; thePearl River Delta in South China; and Jing-Jin-Ji region in North China. It is the rapid development of these areas that is expected to have the most significant effect on the Asian regional economy as a whole and Chinese government policy is designed to remove the obstacles to accelerated growth in these wealthier regions. By 2035, China's four cities (Shanghai, Beijing,Guangzhou and Shenzhen) are projected to be among the global top ten largest cities bynominal GDP according to a report by Oxford Economics.[97]
| provinces | CN¥ | US$ | share (%) |
|---|---|---|---|
| China (mainland) | 141,020.72 | 19,700.70 | 100 |
| Guangdong | 13,911.86 | 2,119.67 | 10.67 |
| Jiangsu | 12,287.56 | 1,826.85 | 10.15 |
| Shandong | 8,743.51 | 1,299.94 | 7.22 |
| Zhejiang | 7,771.54 | 1,155.43 | 6.42 |
| Henan | 6,134.51 | 912.05 | 5.07 |
| Sichuan | 10,674.98 | 1,843.73 | 4.69 |
| Hubei | 5,373.49 | 798.90 | 4.44 |
| Fujian | 5,310.99 | 789.61 | 4.39 |
| Hunan | 4,867.04 | 723.61 | 4.02 |
| Anhui | 4,504.50 | 669.70 | 3.72 |
| Shanghai | 4,465.28 | 663.87 | 3.69 |
| Hebei | 4,237.04 | 629.94 | 3.50 |
| Beijing | 4,161.10 | 618.65 | 3.44 |
| Shaanxi | 3,277.27 | 487.25 | 2.71 |
| Jiangxi | 3,207.47 | 476.87 | 2.65 |
| Chongqing | 2,912.90 | 433.07 | 2.41 |
| Liaoning | 2,897.51 | 430.79 | 2.39 |
| Yunnan | 2,895.42 | 430.48 | 2.39 |
| Guangxi | 2,630.09 | 391.03 | 2.17 |
| Shanxi | 2,564.26 | 381.24 | 2.12 |
| Inner Mongolia | 2,315.87 | 344.31 | 1.91 |
| Guizhou | 2,016.46 | 299.80 | 1.67 |
| Xinjiang | 1,774.13 | 263.77 | 1.47 |
| Tianjin | 1,631.13 | 242.51 | 1.35 |
| Heilongjiang | 1,590.10 | 236.41 | 1.31 |
| Jilin | 1,307.02 | 194.32 | 1.08 |
| Gansu | 1,120.16 | 166.54 | 0.93 |
| Hainan | 681.82 | 101.37 | 0.56 |
| Ningxia | 506.96 | 75.37 | 0.42 |
| Qinghai | 361.01 | 53.67 | 0.30 |
| Tibet | 213.26 | 31.71 | 0.18 |
In accordance with theone country, two systems policy, the economies of the former British colony of Hong Kong and Portuguese colony of Macau formally preserve a capitalist system separate from mainland China.[98][99]
 | ||
| Eastern China | ||
| "Rise of Central China" | ||
| "Revitalize Northeast China" | ||
| "China Western Development" | ||
These strategies are aimed at the relatively underdeveloped regions of China in an attempt to address unequal development:
China engages in state-led investment and industrial policy and with a significant state-owned enterprise sector.[101]: 11 TheChinese Communist Party (CCP) describes China's economic system as thesocialist market economy. To guide economic development, the Chinese central government adoptsfive-year plans that detail its economic priorities and essential policies. Thefourteenth five-year plan (2021–2025) is currently being implemented, placing an emphasis on consumption-driven growth and technological self-sufficiency while China transitions from being an upper middle-income economy to a high-income economy.[102]
Thepublic sector plays a central role in China's economy.[103] This development is also in line with the planning goals of the Chinese central government to achieve theTwo Centenaries, namely the material goal of China becoming amoderately prosperous society in all respects by 2021 and the modernization goal of China becoming a "strong, democratic, civilized, harmonious and modern socialist country" by 2049, the 100th anniversary of the founding of the People's Republic.[104] China retains state control over thecommanding heights of the economy in key industries like infrastructure, telecommunications, and finance despite significant marketization of the economy sincereform and opening up.[105]: 20 Specific mechanisms implementing government control of the commanding heights of the economy include public property rights, pervasive administrative involvement, and CCP supervision of senior managers.[105]: 20
The state is more likely to intervene in areas where the prices of goods and services are socially and politically sensitive.[106]: 105 For example, China's government intervenes more actively in the commercial banking sector than in private equity, where significantly fewer households participate.[106]: 100 The state's involvement in the allocation of finance, contracts, and resources facilitates Chinese government efforts to minimize the effects of market volatility.[107]: 3
Local governments' level of authority and autonomy in economic decision-making is high, and they have played a major role in national economic development.[108]: 1 Local governments may also offer incentives or subsidies to attract business.[108]: 41 One common tax incentive is "three tax-free and three half-tax", through which businesses can be allowed not to pay corporate income tax for their first three years of operation, and paying half rate for the next three years.[108]: 41
China's SOEs perform important functions that benefit the state.[109] Academic Wendy Leutert writes, "They contribute to central and local governments revenues through dividends and taxes, support urban employment, keep key input prices low, channel capital towards targeted industries and technologies, support sub-national redistribution to poorer interior and western provinces, and aid the state's response to natural disasters, financial crises and social instability."[109]
Almost 867,000 enterprises in China have a degree of state ownership, according toFranklin Allen ofImperial College London.[110] As of 2017, China has more SOEs than any other country, and the most SOEs among large national companies.[109] State-owned enterprises accounted for over 60% of China's market capitalization in 2019[111] and generated 40% of China's GDP of US$15.98 trillion dollars (101.36 trillion yuan) in 2020, with domestic and foreign private businesses and investment accounting for the remaining 60%.[112][113] As of the end of 2019, the total assets of all China's SOEs, including those operating in the financial sector, reached US$58.97 trillion In 2015.[114] Ninety-one (91) of these SOEs belong to the 2020 Fortune Global 500 companies.[115] As of 2023[update], private firms represent 37% of the country's top-100 listed firms, according to thePeterson Institute for International Economics.[110]
There exists disputes over reliability of official economic data. Foreign and some Chinese sources have claimed that official Chinese government statistics overstate China's economic growth.[116][117][118] However, several Western academics and institutions have stated that China's economic growth is higher than indicated by official figures.[119] Others, such as theEconomist Intelligence Unit, state that while there's evidence China's GDP data is "smoothed", they believe that China's nominal and real GDP data are broadly accurate.[120] Still, others state that reported GDP growth is irreconcilable with data coming out of China.[121] According to 2007 documents obtained by WikiLeaks,Liaoning Party Secretary and future PremierLi Keqiang said he is far from confident in the country's GDP estimates, calling them "man-made" and unreliable and that data releases, especially the GDP numbers, should be used "for reference only".[122] In its place, he developed theLi Keqiang index is an alternative measurement of Chinese economic performance that uses three variables he preferred.[123]
Chinese provinces and cities have long been suspected of cooking their numbers, with the focus on local government officials, whose performance are often assessed based on how well their respective economies have performed.[124] Local governments have come under increased scrutiny over economic data, with CCP general secretaryXi Jinping stating that economic data forgery "not only hurt our judgment of the economic situation, but also seriously undermined the Communist Party's ideas and truth-seeking style".[116][125]
Satellite measurements oflight pollution are used by some analysts to model Chinese economic growth and suggest growth rate numbers in Chinese official data are more reliable, though are likely to be smoothed.[126] According to an article by theFederal Reserve Bank of St. Louis, China's official statistics are of a high quality compared to other developing, middle-income and low-income countries. In 2016, China was at the 83rd percentile of middle and low-income countries, up from the 38th percentile in 2004.[127] A study by theFederal Reserve Bank of San Francisco found that China's official GDP statistics are "significantly and positively correlated" with externally verifiable measures of economic activity such as import and export data from China's trade partners, suggesting that China's economic growth was no slower than the official figures indicated.[119]
Several Western academics and institutions have supported the claim that China's economy is likely to be underestimated.[128][129][130][119][131][132][133] A paper by the US-basedNational Bureau of Economic Research claimed that China's economic growth may be higher than what is reported by official statistics.[134] An article by Hunter Clarka, Maxim Pinkovskiya andXavier Sala-i-Martin published by theElsevier Science Direct in 2018 employs an innovative method of satellite-recorded nighttime lights, which the authors claim to be a best-unbiased predictor of the economic growth in Chinese cities. The results suggest that the Chinese economic growth rate is higher than the official reported data.[128]
The study byDaniel H. Rosen and Beibei Bao, published by theCenter for Strategic and International Studies in 2015, showed that GDP in 2008 was actually 13–16 percent bigger than the official data, while 2013 GDP was accurately at $10.5 trillion rather than the official figure at $9.5 trillion.[131] According to a research conducted byArvind Subramanian, a former economist at theInternational Money Fund (IMF) and a senior fellow at the Peterson Institute for International Economics, the size of the Chinese economy byPurchasing Power Parity in 2010 was about $14.8 trillion rather than an official estimate at $10.1 trillion by IMF, meaning that China's GDP was underestimated by 47 percent.[130]
According to a 2019 research paper published by theBrookings Institution adjusting the historical GDP time series usingvalue-added tax data, which the authors said are "highly resistant to fraud and tampering",[135][136] China's economic growth may have been overstated by 1.7 percent each year between 2008 and 2016, meaning that the government may have been overstating the size of the Chinese economy by 12–16 percent in 2016.[136][137]
The Rhodium Group, an independent researchthink tank, has consistently questioned the accuracy of China's official GDP figures, estimating actual GDP growth in 2024 to be between 2.4% and 2.8%, significantly lower than the official claim of 4.8%.[138] As observers raised their skepticism of the Chinese economy, in 2025, the United StatesFederal Reserve conducted economic research on whether China was growing at its 5% growth target. They concluded that Chinese official figures were not overstated, with alternative indicators, including trade, consumption, and the property sector data, closely aligned with the official GDP figure. China's strong supply-side economy for international trade and self-reliance offsets the weakness in consumption after the pandemic.[139]
In 2022, China's total government debt stood at approximately CN¥ 94 trillion (US$ 14 trillion), equivalent to about 77.1% ofGDP.[140] In 2014, many analysts expressed concern over the overall size of China's government debt.[141][142][143][144] At the end of 2014, the International Monetary Fund reported that China's general government gross debt-to-GDP ratio was 41.44 percent.[145][146] In 2015, a report by the International Monetary Fund concluded that China's public debt is relatively low "and on a stable path in all standard stress tests except for the scenario with contingent liability shocks", such as "a large-scale bank recapitalization or financial system bailout to deal, for example, with a potential rise inNPLs from deleveraging".[147] Per theState Administration of Foreign Exchange's 2019balance of payments report, the external debt balance of the entire Chinese government at year end was 2% of GDP.[108]: 104
Chinese authorities have dismissed analysts' worries, insisting "the country still has room to increase government debt".[148] Former Fed ChairmanBen Bernanke, earlier in 2016, commented that "the ... debt pile facing China [is] an 'internal' problem", given the majority of the borrowings was issued in local currency.[149] A 2019 survey by theOECD found that China's corporate debt is higher than other major countries.[150]Shadow banking has risen in China, posing risks to the financial system.[151][152] Off the books debt is a grey area, but estimates place the amount for local governments alone as high as $9 trillion[153] or 63 trillion yuan, up from estimates of around 30 trillion yuan in 2020.[154]
Though China's economy has expanded rapidly, its regulatory environment has not kept pace. Since Deng Xiaoping's open market reforms, the growth of new businesses has outpaced the government's ability to regulate them. This has created a situation where businesses, faced with mounting competition and poor oversight, take drastic measures to increaseprofit margins, often at the expense ofconsumer safety. This issue became more prominent in 2007, with a number of restrictions being placed on problematic Chinese exports by the United States.[155][156]
The Chinese technology sector has been characterized as being dominated by few, larger entities includingAnt Group and Tencent.[157] There have been attempts by theXi Jinping Administration to enforceeconomic competition rules, and probes into Alibaba and Tencent have been launched by Chinese economic regulators.[158]
The crackdown on tech giants and internet companies during the2020–2021 Xi Jinping Administration reform spree were followed with calls by thePolitburo against monopolistic practices by commercial retail giants likeAlibaba.[159] In March 2021, Xi stated China would strengthen itsantitrust enforcement in an effort to advance what he described as the healthy and sustainable development of the platform economy.[160]: 100 Two major institutional changes resulted.[160]: 100 In November 2021, China upgraded the bureaucratic status of theState Administration for Market Regulation's antitrust bureau.[160]: 100–101 In June 2022, it made major amendments to theAnti-Monopoly Law, including explicit language focused on regulation of the platform economy.[160]: 101
The following table shows the main economic indicators in 1980–2024 (with IMF staff estimates in 2025–2029). Inflation below 5% is in green.[161]
| Year | GDP (in bn. US$PPP) | GDP per capita (in US$ PPP) | GDP (in bn. US$nominal) | GDP per capita (in US$ nominal) | GDP growth (real) | Inflation rate (in Percent) | Unemployment (in Percent) | Government debt (in % of GDP) |
|---|---|---|---|---|---|---|---|---|
| 1980 | 271.1 | 275 | 303.0 | 307 | 7.9% | n/a | n/a | n/a |
| 1981 | 311.8 | 312 | 288.7 | 288 | 5.1% | 2.5% | n/a | n/a |
| 1982 | 360.9 | 355 | 284.6 | 280 | 9.0% | 2.0% | n/a | n/a |
| 1983 | 415.6 | 403 | 305.4 | 297 | 10.8% | 2.0% | n/a | n/a |
| 1984 | 496.0 | 475 | 314.2 | 301 | 15.2% | 2.7% | n/a | n/a |
| 1985 | 580.8 | 549 | 310.1 | 293 | 13.5% | 9.3% | n/a | n/a |
| 1986 | 645.2 | 600 | 300.9 | 280 | 8.9% | 6.5% | n/a | n/a |
| 1987 | 738.5 | 676 | 327.7 | 300 | 11.7% | 7.3% | n/a | n/a |
| 1988 | 850.2 | 766 | 408.7 | 368 | 11.2% | 18.8% | n/a | n/a |
| 1989 | 920.7 | 817 | 458.2 | 407 | 4.2% | 18.0% | n/a | n/a |
| 1990 | 992.2 | 868 | 396.6 | 347 | 3.9% | 3.3% | n/a | n/a |
| 1991 | 1,118.1 | 965 | 413.2 | 357 | 9.0% | 3.6% | n/a | n/a |
| 1992 | 1,306.8 | 1,115 | 492.1 | 420 | 14.3% | 6.4% | n/a | n/a |
| 1993 | 1,523.5 | 1,285 | 617.4 | 521 | 13.9% | 14.6% | n/a | n/a |
| 1994 | 1,758.8 | 1,467 | 561.7 | 469 | 13.0% | 24.3% | n/a | n/a |
| 1995 | 1,992.6 | 1,645 | 731.0 | 604 | 11.0% | 16.8% | n/a | 21.6% |
| 1996 | 2,230.4 | 1,822 | 860.5 | 703 | 9.9% | 8.3% | n/a | 21.4% |
| 1997 | 2,478.6 | 2,005 | 958.0 | 775 | 9.2% | 2.8% | n/a | 20.6% |
| 1998 | 2,703.4 | 2,167 | 1,024.2 | 821 | 7.9% | -0.8% | n/a | 20.7% |
| 1999 | 2,952.2 | 2,347 | 1,088.3 | 865 | 7.7% | -1.4% | n/a | 21.9% |
| 2000 | 3,274.9 | 2,584 | 1,205.5 | 951 | 8.5% | 0.3% | n/a | 23.0% |
| 2001 | 3,627.2 | 2,842 | 1,333.6 | 1,045 | 8.3% | 0.7% | n/a | 24.6% |
| 2002 | 4,019.3 | 3,129 | 1,465.8 | 1,141 | 9.1% | -0.8% | n/a | 25.9% |
| 2003 | 4,509.4 | 3,490 | 1,657.0 | 1,282 | 10.0% | 1.2% | n/a | 26.8% |
| 2004 | 5,099.0 | 3,923 | 1,949.4 | 1,500 | 10.1% | 3.9% | n/a | 26.4% |
| 2005 | 5,857.9 | 4,480 | 2,290.0 | 1,751 | 11.4% | 1.8% | n/a | 26.3% |
| 2006 | 6,806.0 | 5,178 | 2,754.1 | 2,095 | 12.7% | 1.5% | n/a | 25.6% |
| 2007 | 7,986.3 | 6,044 | 3,555.7 | 2,691 | 14.2% | 4.8% | n/a | 29.2% |
| 2008 | 8,921.0 | 6,718 | 4,577.3 | 3,447 | 9.6% | 5.8% | n/a | 27.2% |
| 2009 | 9,823.9 | 7,361 | 5,089.0 | 3,813 | 9.4% | -0.7% | n/a | 34.6% |
| 2010 | 10,998.3 | 8,202 | 6,033.8 | 4,500 | 10.6% | 3.3% | n/a | 33.9% |
| 2011 | 12,297.4 | 9,115 | 7,492.2 | 5,553 | 9.6% | 5.4% | n/a | 33.8% |
| 2012 | 13,509.4 | 9,939 | 8,539.6 | 6,283 | 7.8% | 2.6% | n/a | 34.4% |
| 2013 | 14,806.9 | 10,830 | 9,624.9 | 7,040 | 7.8% | 2.6% | n/a | 37.0% |
| 2014 | 16,178.3 | 11,754 | 10,524.2 | 7,646 | 7.4% | 2.0% | n/a | 40.0% |
| 2015 | 17,474.4 | 12,633 | 11,113.5 | 8,034 | 7.0% | 1.4% | n/a | 41.5% |
| 2016 | 18,848.6 | 13,538 | 11,226.9 | 8,063 | 6.8% | 2.0% | n/a | 50.7% |
| 2017 | 20,519.1 | 14,655 | 12,265.3 | 8,760 | 6.9% | 1.6% | 5.0% | 55.0% |
| 2018 | 22,368.2 | 15,916 | 13,841.8 | 9,849 | 6.7% | 2.1% | 4.9% | 56.7% |
| 2019 | 24,404.0 | 17,307 | 14,340.6 | 10,170 | 6.0% | 2.9% | 5.2% | 60.4% |
| 2020 | 25,547.1 | 18,091 | 14,862.6 | 10,525 | 2.2% | 2.5% | 5.6% | 70.2% |
| 2021 | 28,722.5 | 20,333 | 17,759.3 | 12,572 | 8.4% | 0.9% | 5.1% | 71.9% |
| 2022 | 31,678.1 | 22,439 | 17,848.5 | 12,643 | 3.0% | 2.0% | 5.6% | 77.4% |
| 2023 | 34,540.9 | 24,503 | 17,758.0 | 12,597 | 5.3% | 0.2% | 5.2% | 84.4% |
| 2024 | 37,072.1 | 26,310 | 18,273.4 | 12,969 | 4.8% | 0.4% | 5.1% | 90.1% |
| 2025e | 39,438.1 | 28,008 | 19,534.9 | 13,873 | 4.5% | 1.7% |  5.1% | 93.8% |
| 2026e | 41,817.2 | 29,725 | 20,810.9 | 14,793 | 4.1% | 2.0% | 5.1% | 97.7% |
| 2027e | 44,108.4 | 31,389 | 22,050.8 | 15,692 | 3.6% | 2.0% | 5.1% | 102.1% |
| 2028e | 46,428.1 | 33,084 | 23,319.7 | 16,617 | 3.4% | 2.0% | 5.1% | 106.6% |
| 2029e | 48,836.3 | 34,848 | 24,589.7 | 17,546 | 3.3% | 2.0% | 5.1% | 111.1% |
As of 2025, China had experienced three inflation peaks: 1987–1989 (18.8%), 1993–1996 (peaking at 24%), and 2008 (8.2%).[162]: 47
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Chinese investment has always been highly cyclical.[163]
In China, the majority of investment is carried out by entities that are at least partially state-owned. Most of these are under the control of local governments. Thus, booms are primarily the result ofperverse incentives at the local-government level.[164] Unlike entrepreneurs in a free-enterprise economy, Chinese local officials are motivated primarily by political considerations. As their performance evaluations are based, to a large extent, on GDP growth within their jurisdictions, they have a strong incentive to promote large-scale investment projects.[165][166]
A typical cycle begins with a relaxation of central government credit and industrial policy. This allows local governments to push investment aggressively, both through state-sector entities they control directly and by offering investment-promotion incentives to private investors and enterprises outside their jurisdictions.[167] The resulting boom puts upward pressure on prices and may also result in shortages of key inputs such as coal and electricity (as was the case in 2003).[168] Once inflation has risen to a level at which it begins to threaten social stability, the central government will intervene by tightening enforcement of industrial and credit policy. Projects that went ahead without required approvals will be halted. Bank lending to particular types of investors will be restricted. Credit then becomes tight and investment growth begins to decline.[169]
China's unemployment landscape has become a pressing concern, particularly among its youth. Official figures indicate a relatively stable urban surveyed unemployment rate of 5.0% as of late 2024, with annual unemployment projected to decline slightly from 5.2% in 2023 to 5.1% in 2024. However, youth unemployment paints a more troubling picture. Officially, the unemployment rate for individuals aged 16 to 24 peaked at 21.3% in mid-2023, before declining to 16.1% by November 2024. Yet, independent estimates suggest that the true youth unemployment rate may have been significantly higher, with some analysts, including a prominent Chinese professor, suggesting it could have reached as high as 46.5%, while others speculated it may have approached or exceeded 50%. Reports have also surfaced about the creation of "fake jobs" or positions that exist on paper but provide no meaningful work or income, aimed at artificially lowering the reported unemployment figures. These issues, compounded by a slowing economy, a prolonged property market crisis, and insufficient demand for skilled labor, have led many young Chinese to "lie flat" or retreat from the workforce altogether. As China implements reforms to improve labor conditions and stimulate economic growth, achieving a projected 5% GDP growth target, youth unemployment and underemployment remain critical challenges for policymakers and society alike.[170][171]
China has the world's largest total banking sector assets of around $45.838 trillion (309.41 trillion CNY) with $42.063 trillion in total deposits and other liabilities.[172] Most of China's financial institutions are state-owned and governed.[173] The chief instruments offinancial andfiscal control are thePeople's Bank of China (PBC) and theMinistry of Finance, both under the authority of theState Council. The People's Bank of China replaced theCentral Bank of China in 1950 and gradually took overprivate banks. It fulfills many of the functions of othercentral andcommercial banks. It issues the currency, controls circulation, and plays an important role in disbursing budgetary expenditures. Additionally, it administers the accounts, payments, and receipts of government organizations and other bodies, which enables it to exert thorough supervision over their financial and general performances in consideration of the government's economic plans. The PBC is also responsible forinternational trade and other overseastransactions.Remittances byoverseas Chinese are managed by theBank of China (BOC), which has a number of branch offices in several countries.[citation needed]
Other financial institutions that are crucial, include theChina Development Bank (CDB), which funds economic development and directsforeign investment; theAgricultural Bank of China (ABC), which provides for the agricultural sector; theChina Construction Bank (CCB), which is responsible for capitalizing a portion of overall investment and for providingcapital funds for certain industrial and construction enterprises; and theIndustrial and Commercial Bank of China (ICBC), which conducts ordinary commercial transactions and acts as asavings bank for the public.[citation needed] China initiated the founding of theAsian Infrastructure Investment Bank in 2015 and theSilk Road Fund in 2014, an investment fund of the Chinese government to foster increased investment and provide financial supports in countries along theOne Belt, One Road.[174]
China's economic reforms greatly increased the economic role of thebanking system. In theory any enterprises or individuals can go to the banks to obtain loans outside the state plan, in practice, 75% of state bank loans go toState Owned Enterprises. (SOEs)[175] Even though nearly all investmentcapital was previously provided on agrant basis according to the state plan, policy has since the start of the reform shifted to a loan basis through the various state-directed financial institutions. It is estimated that, as of 2011, 14 trillion Yuan in loans was outstanding to local governments. Much of that total is believed by outside observers to be nonperforming.[176] Increasing amounts of funds are made available through the banks for economic and commercial purposes. Foreign sources of capital have also increased. China has received loans from theWorld Bank and severalUnited Nations programs, as well as from countries (particularlyJapan) and, to a lesser extent, commercial banks.Hong Kong has been a major conduit of this investment, as well as a source itself. On 23 February 2012, the PBC evinced its inclination to liberalize its capital markets when it circulated a telling ten-year timetable.[177] Following on the heels of this development, Shenzhen banks were able to launch cross-border yuan remittances for individuals, a significant shift in the PBC'scapital control strictures since Chinese nationals had been previously barred from transferring their yuan to overseas account.[178]
China has four of the world's top ten most competitivefinancial centers (Shanghai, Hong Kong, Beijing, and Shenzhen), more than any other country.[179] China has three of the world's tenlargest stock exchanges (Shanghai,Hong Kong andShenzhen), both bymarket capitalization and bytrade volume.[49][180] As of 12 October 2020, the total market capitalization of mainland Chinese stock markets, consisting of the Shanghai Stock Exchange and Shenzhen Stock Exchange, topped US$10 trillion, excluding the Hong Kong Stock Exchange, with about US$5.9 trillion.[181]
As of June 2020, foreign investors had bought a total of US$440 billion in Chinese stocks, representing about 2.9% of the total value, and indicating that foreign investors scooped up a total of US$156.6 billion in the stocks just in the first half of 2020.[182] The total value of China's bond market topped US$15.4 trillion, ranked above that of Japan and the UK, and second only to that of the U.S. with US$40 trillion, as of the beginning of September 2020.[183] As of September 2020, foreign holdings of Chinese bonds reached US$388 billion, or 2.5%, of the total value, notwithstanding an increase by 44.66% year on year.[184]
As of 2024, China has the second-largest equity markets and futures markets in the world, as well as the third largest bond market.[185]: 153 China's stock market exchanges include theBeijing Stock Exchange, the Shanghai Stock Exchange (including theSTAR Market), the Shenzhen Stock Exchange, and the Hong Kong Stock Exchange. China's stock market is relatively underdeveloped in comparison to other aspects of its economy.[186]: 148–150
To be listed on China's stock exchange, companies must demonstrate good financial standing (including sustained profitability), solid corporate governance, including a board of independent directors, supervisory board, auditing, and no history of misreporting or fraud, and have a market capitalization equivalent to at least US$4 million.[90]: 271–272 The government regulatesinitial public offerings, encouraging them when the market is high in an effort to cool down prices and prohibiting them when the market is low.[106]: 109
When the stock markets re-opened in the PRC period in 1990, most of the listed companies were state-owned enterprises; this was part of an experiment in subjecting SOEs to market discipline.[186]: 152–153 The Shanghai and Shenzhen stock exchanges were under municipal control and termed "experimental points" until 1997.[105]: 102–103 In 1997, the central government brought the exchanges under central government control and affirmed that the exchanges had a legitimate role in the socialist market economy.[105]: 102 In 2015, astock market plunge in China eliminated $2 trillion of global stock market value.[186]: 147
The renminbi ("people's currency") is the currency of China, denominated as theyuan, subdivided into 10 jiao or 100 fen. The renminbi is issued by the People's Bank of China, the monetary authority of China. TheISO 4217 abbreviation is CNY, although also commonly abbreviated as "RMB". As of 2005, the yuan was generally considered by outside observers to be undervalued by about 30–40%.[187][188] However, in 2017, the IMF stated that the yuan was correctly valued.[189]
There is a complex relationship between China'sbalance of trade, inflation, measured by theconsumer price index and the value of its currency. Despite allowing the value of the yuan to "float", China's central bank has decisive ability to control its value with relationship to other currencies[190] An article published in International Review of Economics & Finance in 2010 by Mete Feridun (University of Greenwich Business School) and his colleagues provide empirical evidence that financial development fosters economic growth in China.[191]
The renminbi is held in a floatingexchange-rate system managed primarily against theUS dollar. China has moved to an exchange rate system that references a basket of currencies and has allowed the renminbi to fluctuate at a daily rate of up to half a percent.[citation needed] A market-based "representative" exchange rate against the U.S. dollar is one of the requirements for designation of a currency as one withSpecial Drawing Rights (SDR) by the International Monetary Fund (IMF), one of China's goals.[192] Since the late-2000s, China has sought tointernationalize the renminbi.[193] As of 2013, the RMB is the 8th most widely traded currency in the world.[194] The internationalization of the Chinese economy continues to affect the standardized economic forecast officially launched in China by thePurchasing Managers Index in 2005.
China aims for roughly 5% GDP growth and 2% inflation, using higher fiscal deficits and expanded local government bond issuance to replace shadow LGFVs with official debt. Total government borrowing, including LGFVs, has risen sharply to 124% of GDP, with local government debt over 60% and overall non-financial debt at 312%. In 2014, nonfinancial debt to GDP stood at ~140%. Despite accommodative monetary policies, weak domestic consumption and uncertain exports make growth targets challenging.[195][196] Nonfinancial debt is the total nominal value of outstanding debt instruments issued by the non-financial corporate sector. This includes corporate, household and government debt.[197]
Household debt has risen past 60% of GDP, mainly from mortgages and leveraged investments, affecting 5–7% of adults. High savings provide some buffer, but a property slump, youth unemployment, and aggressive debt collection heighten financial and social stress. Limited regulations, including cautious personal bankruptcy laws, leave many households exposed while the government balances support with broader economic stability.[198]
According toFortune Global, of the world's 500 largest companies, 135 are headquartered in China.[199] As of 2023, mainland China and Hong Kong were home to 324 largest listed companies measured byrevenue in theFortune Global 2000, ranking second globally.[200] China is also home to more than two hundred privately held technology startups (tech unicorns), each with a valuation of over $1 billion, the highest number in the world.[201]
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China is the world's largest producer and consumer of agricultural products – and some 300 million Chinesefarm workers are in the industry, mostly laboring on pieces of land about the size of U.S. farms. Virtually allarable land is used for foodcrops. China is the world's largest producer ofrice and is among the principal sources ofwheat, corn (maize),tobacco,soybeans,potatoes,sorghum,peanuts,tea,millet,barley,oilseed,pork, andfish. Major non-food crops, including cotton, other fibers, andoilseeds, furnish China with a small proportion of its foreign trade revenue. Agricultural exports, such as vegetables and fruits, fish and shellfish, grain and meat products, are exported to Hong Kong. Yields are high because ofintensive cultivation, for example, China's cropland area is only 75% of the U.S. total, but China still produces about 30% more crops and livestock than the United States. China hopes to further increase agricultural production through improved plant stocks,fertilizers, and technology.
According to the United NationsWorld Food Programme, in 2022, China fed eighteen percent of the world's population with only seven percent of the world's arable land.[202]
Animal husbandry constitutes the second most important component of agricultural production. China is the world's leading producer of pigs, chickens, and eggs, and it also has sizable herds of sheep and cattle. Since the mid-1970s, greater emphasis has been placed on increasing thelivestock output. China has a long tradition of ocean and freshwater fishing and ofaquaculture.Pond raising has always been important and has been increasingly emphasized to supplement coastal and inlandfisheries threatened byoverfishing and to provide such valuable export commodities asprawns. China is also unmatched in the size and reach of its fishing armada with anywhere from 200,000 to 800,000 boats, some as far afield as Argentina. Fueled primarily by government subsidies, its growth and activities have largely gone unchecked.[203]
Environmental problems such as floods, drought, and erosion pose serious threats to farming in many parts of the country. The wholesale destruction of forests gave way to an energeticreforestation program that proved inadequate, and forest resources are still fairly meagre.[204] The principal forests are found in theQin Mountains and the central mountains and on theYunnan–Guizhou Plateau. Because they are inaccessible, the Qinling forests are not worked extensively, and much of the country'stimber comes fromHeilongjiang,Jilin,Sichuan, andYunnan.
Western China, comprisingTibet,Xinjiang, andQinghai, has little agricultural significance except for areas offloriculture andcattle raising. Rice, China's most important crop, is dominant in the southern provinces and many of the farms here yield twoharvests a year. In the north, wheat is of the greatest importance, while incentral China wheat and rice vie with each other for the top place.Millet andkaoliang (a variety of grain sorghum) are grown mainly in the northeast and some central provinces, which, together with some northern areas, also provide considerable quantities ofbarley. Most of thesoybean crop is derived from the north and the northeast; corn (maize) is grown in the center and the north, whiletea comes mainly from the warm and humid hilly areas of the south. Cotton is grown extensively in the central provinces, but it is also found to a lesser extent in the southeast and in the north.Tobacco comes from the center and parts of the south. Other important crops are potatoes,sugar beets, and oilseeds.
In the past decade, the government has been encouraging agricultural mechanization andland consolidation to raise yields and compensate for the loss of rural workers who have migrated to the cities.[205] According to statistics by the UN Food and Agriculture Organization, the annual growth rate of agricultural mechanization in China is 6.4%. By 2014, the integrated mechanization rate had risen to nearly 60%, with the rate for wheat surpassing 90% and that for maize approaching 80%.[206] In addition to standard agricultural equipment like tractors, China's agriculture cooperatives have begun using high-tech equipment, including unmanned aerial vehicles, which are used to spray crops with pesticides.[207] Good progress has been made in increasingwater conservancy, and about half the cultivated land is under irrigation.
In the late 1970s and early 1980s, economic reforms were introduced. First of all this began with the shift of farming work to asystem of household responsibility and a phasing out ofcollectivized agriculture. Later this expanded to include a gradual liberalization of price controls;fiscaldecentralization; massive privatization of state enterprises, thereby allowing a wide variety ofprivate enterprises in theservices andlight manufacturing; the foundation of a diversifiedbanking system (but with large amounts of state control); the development of astock market; and the opening of the economy to increasedforeign trade and foreign investment.
In 2010, China became the world's largest market for construction.[185]: 112 It has remained the world's largest through at least 2024.[185]: 112 The real estate industry is about 20% of the Chinese economy.[208] As of 2023, real property accounts for 60% of Chinese household assets.[186]: 161 Also as of 2023, China has the highest rate of home ownership in the world.[186]: 170 90% of urban households own their home.[186]: 170
Compared to other nations, investing in stock markets and other assets is harder due to currency controls within the country. As a result, many Chinese citizens own multiple properties, as they are one of the few ways in which it is comparatively easy to grow and preserve wealth. Due to this, many economists have speculated about a property bubble within the Chinese economy.[209] On 16 July 2020, the Wall Street Journal reported that the housing market within the Chinese economy had grown to US$52 trillion, eclipsing the US 2008 housing market before the2008 financial crisis.[210]
Electricity – production by source (2023):[212]
Oil:
Natural gas:
Over the years, large subsidies were built into the price structure of certain commodities and these subsidies grew substantially in the late 1970s and 1980s.[214] Since 1980, China's energy production has grown dramatically, as has the proportion allocated to domestic consumption. Some 80 percent of all power is generated from fossil fuel atthermal plants, with about 17 percent athydroelectric installations; only about two percent is fromnuclear energy, mainly from plants located inGuangdong andZhejiang.[215] Though China has rich overall energy potential, most have yet to be developed. In addition, the geographical distribution of energy puts most of these resources relatively far from their major industrial users. The northeast is rich incoal andoil, the central part of north China has abundant coal, and the southwest has immensehydroelectric potential. But the industrialized regions aroundGuangzhou and theLower Yangtze region around Shanghai have too little energy, while there is relatively littleheavy industry located near major energy resource areas other than in the southern part of the northeast.
Due in large part to environmental concerns, China has wanted to shift China's currentenergy mix from a heavy reliance on coal, which accounts for 70–75% of China's energy, toward greater reliance on oil,natural gas,renewable energy, andnuclear power. China has closed thousands ofcoal mines over the past five to ten years to cutoverproduction. Since 1993, China has been a net importer of oil, a large portion of which comes from the Middle East. According to Chinese statistics, this has reduced coal production by over 25%. as of 2023, solar power has become cheaper than coal-fired power in China.[106]: 167
Since the early 2000s, China's clean energy sector has rapidly developed.[216]: 23 This growth has enabled renewable energy to have an important role in China's international cooperation, includingSouth-South cooperation in which China is a major source of clean energy technology transfer to other developing countries.[216]: 4, 23 As of 2023, China is the world's leading producer of solar panels and wind turbines.[106]: 167
By 2010, rapidly rising wages and a general increase in the standard of living had put increased energy use on a collision course with the need to reducecarbon emissions in order to controlglobal warming.[93] There were diligent efforts to increaseenergy efficiency and increase use ofrenewable sources; over 1,000 inefficient power plants had been closed, but projections continued to show a dramatic rise in carbon emissions from burningfossil fuels.[217]
While not the largest source of historical cumulative emissions, today China accounts for one quarter of global greenhouse gas emissions.[218] On a per capita basis, China's emissions in 2019 (9 tonnes CO2-equivalent [tCO2e] per year) surpass those of the European Union (7.6 tCO2e) but remain slightly below the Organisation for Economic Co-operation and Development (OECD) average (10.7 tCO2e) and well below the United States average (17.6 tCO2e). However, the carbon intensity of China's GDP—the amount of carbon used to generate a unit of output—remains relatively high.[93] To avoid the long-term socioeconomic cost[219] of environmentalpollution in China,[220][221] it has been suggested byNicholas Stern and Fergus Green of theGrantham Research Institute on Climate Change and the Environment that the economy of China be shifted to more advanced industrial development with low carbon dioxide emissions and better allocation of national resources to innovation and R&D for sustainable economic growth in order to reduce the impact of China's heavy industry. This is in accord with the planning goals of the central government.[222] Contrary to the publicized goals, China is building a large number of coal fired power plants and it carbon emissions could further increase.[223][224]
As of 2022[update], more than 200 types of minerals are actively explored or mined in thePeople's Republic of China (PRC). These resources are widely but not evenly distributed throughout the country. Taken as a whole, China's economy and exports do not rely on the mining industry, but the industry is critical to various subnational governments of the PRC.
Mining is extensively regulated in the PRC and involves numerous regulatory bodies. Thestate owns all mineral rights, regardless of the ownership of the land on which the minerals are located. Mining rights can be obtained upon government approval, and payment of mining and prospecting fees.
During theMao Zedong era, mineral exploration and mining was limited tostate-owned enterprises and collectively owned enterprises and private exploration of mineral resources was largely prohibited. The industry was opened to private enterprises during theChinese economic reform in the 1980s and became increasingly marketized in the 1990s. In the mid-2000s, the Chinese government sought to consolidate the industry due to concerns about underutilization of resources, workplace safety, and environmental harm. During that period, state-owned enterprises purchased smaller privately owned mines. China's mining industry grew substantially and the period from the early 2000s to 2012 is often referred to as a "golden decade" in the mining industry.
China has an abundant potential forhydroelectric power production due to its considerable river network and mountainous terrain. Most of the total hydroelectric capacity is situated in thesouthwest of the country, where coal supplies are poor butdemand for energy is rising swiftly. The potential in the northeast is fairly small, but it was there that the first hydroelectric stations were built – by the Japanese during its occupation ofManchuria.[225]
China is well endowed with mineral resources,[226] the most important of which iscoal. China's mineral resources include large reserves ofcoal andiron ore, plus adequate to abundant supplies of nearly all other industrialminerals. Although coal deposits are widely scattered (some types of coal is found in every province), most of the total is located in the northern part of the country. The province ofShanxi, in fact, is thought to contain about half of the total; other important coal-bearing provinces includeHeilongjiang,Liaoning,Jilin,Hebei, andShandong.[227] Apart from these northern provinces, significant quantities of coal are present inSichuan, and there are some deposits of importance inGuangdong,Guangxi,Yunnan, andGuizhou.[227] A large part of the country's reserves consists of goodbituminous coal, but there are also large deposits oflignite.Anthracite is present in several places (especiallyLiaoning,Guizhou, andHenan), but overall, it is not very significant.[228]
To ensure a more even distribution of coal supplies and to reduce the strain on the less than adequatetransportation network, the authorities pressed for the development of a large number of small, locally runmines throughout the country. This campaign was energetically pursued after the 1960s, with the result that thousands of small pits have been established, and they produce more than half the country's coal. This output, however, is typically expensive and is used for local consumption. It has also led to a less than stringent implementation of safety measures in these unregulated mines, which cause several thousands of deaths each year.[229]
Coal makes up the bulk of China's energy consumption (55% in 2021), and China is the largest producer and consumer of coal in the world. As China's economy continues to grow, China's coal demand is projected to rise significantly. Although coal's share of China's overall energy consumption will decrease, coal consumption will continue to rise in absolute terms. China's continued and increasing reliance on coal as a power source has contributed significantly to putting China on the path to becoming the world's largest emitter ofacid rain-causingsulfur dioxide andgreenhouse gases, includingcarbon dioxide.
China's onshoreoil resources are mostly located in theNortheast and inXinjiang,Gansu,Qinghai,Sichuan,Shandong, andHenan provinces.Oil shale is found in a number of places, especially atFushun in Liaoning, where the deposits overlie the coal reserves, as well as in Guangdong. High qualitylight oil has been found in thePearl River estuary of theSouth China Sea, theQaidam Basin in Qinghai, and theTarim Basin in Xinjiang. The country consumes most of its oil output but does export some crude oil and oil products. China has explored and developed oil deposits in theSouth China Sea andEast China Sea, theYellow Sea, theGulf of Tonkin, and theBohai Sea.
In 2013, the pace of China's economic growth exceeded the domestic oil capacity and floods damaged the nation's oil fields in the middle of the year. Consequently, China imported oil to compensate for the supply reduction and surpassed the US in September 2013 to become the world's largest importer of oil.[230]
The total extent of China'snatural gas reserves is unknown, as relatively little exploration for natural gas has been done.[231] Sichuan accounts for almost half of the known natural gas reserves and production.[232] Most of the rest of China's natural gas is associated gas produced in the Northeast's major oil fields, especiallyDaqing oilfield. Other gas deposits have been found in the Qaidam Basin,Hebei,Jiangsu,Shanghai, andZhejiang, and offshore to the southwest ofHainan.[233] According to an article published in Energy Economics in 2011 by economists Mete Feridun (University of Greenwich) and Abdul Jalil (Wuhan University in China), financial development in China has not taken place at the expense of environmental pollution and financial development has led to a decrease in environmental pollution. Authors conclude that carbon emissions are mainly determined by income, energy consumption and trade openness and their findings confirm the existence of an Environmental Kuznets Curve in the case of China.[234]
Iron ore reserves are found in most provinces, includingHainan. Gansu, Guizhou, southern Sichuan, and Guangdong provinces have rich deposits. The largest mined reserves are located north of theYangtze River and supply neighboring iron and steel enterprises. With the exception ofnickel,chromium, andcobalt, China is well supplied withferroalloys andmanganese. Reserves oftungsten are also known to be fairly large.Copper resources are moderate, and high-quality ore is present only in a few deposits. Discoveries have been reported fromNingxia.Lead andzinc are available, andbauxite resources are thought to be plentiful. China'santimony reserves are the largest in the world.Tin resources are plentiful, and there are fairly rich deposits of gold. China is the world's fifth largest producer ofgold and in the early 21st century became an important producer and exporter of rare metals needed in high-technology industries.
China also produces a fairly wide range ofnonmetallic minerals. One of the most important of these issalt, which is derived from coastalevaporation sites in Jiangsu, Hebei, Shandong, and Liaoning, as well as from extensive salt fields in Sichuan, Ningxia, and the Qaidam Basin. There are important deposits ofphosphate rock in a number of areas, Jiangxi, Guangxi, Yunnan and Hubei. Production has been accelerating every year. As of 2013 China is producing 97,000,000 metric tons of phosphate rock a year.[235]Pyrites occur in several places; Liaoning, Hebei, Shandong, and Shanxi have the most important deposits. China also has large resources offluorite (fluorspar),gypsum,asbestos, and has the world's largest reserves and production ofcement, clinker and limestone.
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China has a strong global position in the production of industrial goods and some of its companies are global leader in the areas of steel, solar energy, and telecommunications accessories.[236]: 131 As of 2024[update], industry accounts for 36.5% of China's GDP.[6] From 2010 until at least 2023, China produces more industrial goods than any other country.[107]: 1 As of 2023, China manufactures approximately one fifth of the world's total output of industrial products.[236]: 133
Major industries include mining and ore processing;iron andsteel;aluminium;coal;machinery;armaments;textiles andapparel;petroleum;cement;chemical;fertilizers;food processing;automobiles and other transportation equipment including rail cars and locomotives, ships, and aircraft;consumer products includingfootwear,toys, andelectronics;telecommunications andinformation technology.
Since the founding of the People's Republic, industrial development has been given considerable attention; as of 2011 46% of China's national output continued to be devoted to investment; a percentage far higher than any other nation.[237] Among the various industrial branches themachine-building andmetallurgical industries have received the highest priority. These two areas alone now account for about 20–30 percent of the total gross value of industrial output.[238] In these, as in most other areas of industry, however,innovation has generally suffered at the hands of a system that has rewarded increases in gross output rather than improvements in variety, sophistication and quality. China, therefore, still imports significant quantities of specialized steels. Overall industrial output has grown at an average rate of more than ten percent per year, having surpassed all other sectors ineconomic growth and degree ofmodernization.[239]
Following its 2001 entry into the World Trade Organization, China quickly developed a reputation as the "world's factory" through its manufacturing exports.[108]: 256 The complexity of its exports increased over time, and as of 2019 it accounts for approximately 25% of all high tech goods produced globally.[108]: 256 The proportion of Chinese manufactured goods at the higher end of thevalue chain grew at a faster rate after 2020.[162]: 38 As of 2024, China has significant industrial capacity in excess of its domestic needs.[107]: 34 The government has sought to alleviate industrial capacity by channeling it abroad, including through theBelt and Road Initiative.[107]: 34
The predominant focus of development in thechemical industry is to expand the output of chemicalfertilizers,plastics, andsynthetic fibers. The growth of this industry has placed China among the world's leading producers ofnitrogenous fertilizers. In theconsumer goods sector the main emphasis is on textiles andclothing, which also form an important part of China's exports. Textile manufacturing, a rapidly growing proportion of which consists of synthetics, account for about ten percent of the gross industrial output and continues to be important, but less so than before. The industry tends to be scattered throughout the country, but there are a number of importanttextile centers, includingShanghai,Guangzhou, andHarbin.[240][241] There is agrowing consumer culture in China.
In 2020, China produced over 1053 million tonnes of steel, over half of the world total. This was an increase of 5.6% over the previous year as global steel production fell by 0.9%. China's share of global crude steel production increased from 53.3% in 2019 to 56.5% in 2020, decreasing -2.1% in 2021.[242]
Iron ore production kept pace with steel production in the early 1990s but was soon outpaced by imported iron ore and other metals in the early 2000s. Steel production, an estimated 140 million tons in 2000 increased to 419 million tons in 2006 and 928 million tons by 2018. China was the top exporter of steel in the world in 2021; export volumes in 2021 were 66.2 million tons.[243] Domestic demand remains strong, particularly in the developing west where steel production inXinjiang was expanding.[244] Of the 45 largest steel producing companies in the world, 21 are Chinese, including the world's largest,China Baowu Steel Group.
China is the world's largest automobile producer, manufacturing more than 31.28 million vehicles in 2024, with 5.86 million of those being exported overseas.[245] As of 2024[update], China is the world's largest automobile market in terms of both sales and ownership.[106]: 105 Due to rapid advancements by Chinese companies, China's automotive industry is regarded as one of the most competitive and innovative in the world.[246]
Automobile manufacturing has soared during the reform and opening up period. In 1975 only 139,800 automobiles were produced annually, but by 1985 production had reached 443,377, then jumped to nearly 1.1 million by 1992 and increased fairly evenly each year up until 2001, when it reached 2.3 million. By 2006 China had become the world's third largest automotive vehicle manufacturer and the second-largest consumer. By 2010, China was manufacturing more vehicles than the U.S. and Japan combined. Domestic sales have kept pace with production. After respectable annual increases in the mid- and late 1990s, passenger car sales soared in the early 2000s. In 2010, China became the world's largest automotive vehicle manufacturer as well as the largest consumer ahead of theUnited States with an estimated 18 million new cars sold.[247]
China began exporting car parts in 1999. China began to plan major moves into the automobile and components export business starting in 2005. By 2004, twelve major foreign automotive manufacturers hadjoint-venture plants in China. They produced a wide range of automobiles,minivans,sport utility vehicles,buses, andtrucks. In 2003, China exported US$4.7 billion worth of vehicles and components. The vehicle export was 78,000 units in 2004, 173,000 units in 2005, and 340,000 units in 2006. China's exports of cars increased significantly since 2020, boosted bynew energy vehicles. It overtook Germany and Japan in 2022 and 2023 respectively in vehicle exports, becoming the world's largest exporter of cars.[248]
The electric vehicle industry in China is the largest in the world, accounting for around 58% of global consumption of EVs.[249] In 2023, CAAM reported China had sold 9.05 million passenger electric vehicles, consisting 6.26 million BEVs (battery-only EVs) and 2.79 million PHEV (plug-in hybrid electric vehicles).[250] China also dominates the plug-inelectric bus andlight commercial vehicle market, reaching over 500,000 buses (98% of global stock) and 247,500 electric commercial vehicles (65% of global stock) in 2019,[251] and recording new sales of 447,000 commercial EVs in 2023.[250]
Plug-in electric vehicle (BEV and PHEV) sales were 37% of the overall automotive sales in China in 2023, with BEVs and PHEVs having 25% and 12% market share respectively. This is a significant increase from 2020, when plug-in electric vehicles accounted for only 6.3% of total sales.[252] The plug-in market in China was dominated by Chinese companies, withBYD Auto andSAIC Motor occupying the top two spots, and 5 out of the top 7 spots.[253]
The battery industry is closely related to the EV industry asbatteries constitute around 1/3 of the cost of EVs[255] and around 80% of lithium-ion batteries in the world are used in EVs.[256] The industry also has significant Chinese presence, with major players including world's largestCATL,BYD, CALB, Gotion, SVOLT and WeLion.[257]
The Chinese semiconductor industry, includingIC design and manufacturing, forms a major part of China's IT industry. China's semiconductor industry consists of a wide variety of companies, fromintegrated device manufacturers topure-play foundries tofabless semiconductor companies.Integrated device manufacturers (IDMs) design and manufacture integrated circuits.Pure-play foundries only manufacture devices for other companies, without designing them, whilefabless semiconductor companies only design devices. Examples of Chinese IDMs areYMTC andCXMT, examples of Chinese pure-play foundries areSMIC,Hua Hong Semiconductor andWingtech, and examples of Chinese fabless companies areZhaoxin,HiSilicon andUNISOC.
China is the currently the world's largest semiconductor market in terms of consumption. In 2020, China represented 53.7% of worldwide chip sales, or $239.45 billion out of $446.1 billion. However, a large percentage are imported from multinational suppliers. In 2020, imports took up 83.38% ($199.7 billion) of total chip sales. In response, the country has launched a number of initiatives to close the gap, including investing $150 billion into its domestic IC industry, with a "Made in China 2025" goal of 70% domestic production.[258][259][260] China leads the world in terms of number of new fabs under construction, with 8 out of 19 worldwide in 2021, and 17 fabs in total are expected to start construction from 2021 to 2023. Total installed capacity of Chinese-owned chipmakers will also increase from 2.96 million wafers per month (wpm) in 2020 to 3.572 million wpm in 2021.[258]
Substantial investments were made in the manufacture ofsolar panels andwind generators by a number of companies, supported by liberal loans by banks and local governments. However, by 2012 manufacturing capacity had far outstripped domestic and global demand for both products, particularly solar panels, which were subjected to anti-dumping penalties by both the United States and Europe. The global oversupply has resulted in bankruptcies and production cutbacks both inside and outside China. China has budgeted $50 billion to subsidize production of solar power over the two decades following 2015.[261]
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China is the world's biggest sex toy producer and accounts for 70% of the worldwide sex toys production.[262] In the country, 1,000 manufacturers are active in this industry, which generates about two billion dollars a year.[262] As of 2011, China was the world's largest market for personal computers.[263] China has the second-largest reserve of computers in the world as of 2024.[106]: 16–17
Prior to the onset of economic reforms in 1978, China's services sector was characterized by state-operatedshops,rationing, and regulated prices – with reform came private markets, individual entrepreneurs, and a commercial sector. Thewholesale andretail trade has expanded quickly, with numerousshopping malls, retail shops, restaurant chains and hotels constructed in urban areas.Public administration remains a main component of the service sector, whiletourism has become a significant factor inemployment and a source offoreign exchange.[264]
The affordability of mobile phones and internet data in China has resulted in the number of mobile internet users in China surpassing the number of computer internet users.[265]: 178 By 2023, the number of Internet users in China increased to over 1.09 billion. The proportions of Chinese netizens accessing the Internet via mobile phones, desktop computers, laptop computers, TVs and tablet computers were 99.9%, 33.9%, 30.3%, 22.5% and 26.6%, respectively.[266]
China's economy is one of the world's leaders in consumer internet andmobile payments.[236]: 130 As of 2024[update], China has moreinternet users than any other country.[106]: 18 Internet users in China generate large amounts of data, thereby providing a competitive benefit in the development of machine learning for artificial intelligence technology.[106]: 18 Mobile payment methods via apps includingAlipay andWeChat Pay were quickly adopted in China in part due to the relative lack of credit cards in the country.[236]: 130 This technologicalleapfrogging also led to a boom in online shopping and retail banking.[236]: 130
China's platform economy has grown substantially since the early 2010s, with its transactional volume reaching RMB 3.7 trillion in 2021.[160]: 155 The platform economy has absorbed a large number of workers from China's decreasing manufacturing workforce and from its population ofinternal migrant workers.[160]: 155 As of 2020, 84 million people worked as platform economy service providers and 6 million were employees of platform companies.[160]: 155
The platform economy sector is highly concentrated inAlibaba andTencent, both of which have ride-hailing and food delivery businesses as key assets in their investment portfolios.[160]: 155 Ride-hailing and food delivery businesses have significantly consolidated since 2016.[160]: 155–156
In 2020, China's market forfilms surpassed the U.S. market to become the largest such market in the world.[106]: 16 Domestic movies dominate the Chinese market.[267]
China hosts the world's secondlargest number ofWorld Heritage Sites (59). China'stourism industry is one of the fastest-growing industries in the national economy and is also one of the industries with a very distinct global competitive edge. According to theWorld Travel and Tourism Council, travel and tourism directly contributed CNY 1,362 billion (US$216 billion) to the Chinese economy (about 2.6% of GDP).[268] In 2011, total international tourist arrivals was 58 million, and international tourism receipts were US$48 billion.[269]
The Chinese tourism industry was hit hard by both theCOVID-19 lockdowns and strained relations with many foreign nations.[270][271] Foreign flights into China, both for business and tourism are way down, especially from the US.[272][273][274] Recent much increased internal security activity decreases the desire of foreigners to live in China, or to go to China, for fear of being targeted and not allowed to leave. Thus many foreigners are leaving and others crossing it off as a travel destination.[275][276]
Hong Kong and Macau benefit from favorable taxation rules and are favored locations for tourists from elsewhere in China to purchase luxury goods like cosmetics, jewelry, and designer fashion goods.[277]: 116 Porcelain has long been one of China's most important luxury exports.[277]: 226 It was especially important to early trade between China and the West, with much of that trade being conducted through Macau.[277]: 226 Many shops in international travel destinations have specialized staff devoted to Chinese customers.[278]
China has the largest national proportion of the global middle class.[108]: 204 As of 2020, China had 400 million middle-income citizens.[106]: 159 It is projected to reach 1.2 billion by 2027, making up one fourth of the world total.[279] According to a 2021Pew Research Center survey, there were 23 million Chinese individuals with a per capita daily income of $50 or more, 242 million with a daily income between $20–50 per day, 493 million between $10–20, 641 million $2–10 per day, and 4 million under $2 per day; all the figures are expressed ininternational dollars and 2011 purchasing power parity values.[280] In 2022, theNational Bureau of Statistics reported that China's average disposable income per capita was ¥36,883, of which ¥20,590 was from wages and salaries, ¥6,175 was net business income, ¥3,227 was net income from property, and ¥6,892 was net transfer income.[281]
As of April 2023[update], China was second in the world, after the US, intotal number of billionaires andtotal number of millionaires, with 495 Chinese billionaires[282] and 6.2 million millionaires in 2022.[283] According to the Hurun Global Rich Report In 2020, China had the world's highest number of billionaires, which is more than the US and India combined,[284] and as of March 2021, the number of billionaires in China reach 1,058 with the combined wealth of US$4.5 trillion.[285] According to the 2019 Global Wealth Report by Credit Suisse Group, China surpassed the US in the wealth of the top ten percent of the world's population.[286][note 3] In other words, as of 2019, a hundred million Chinese are in the top ten percent of the wealthiest individuals in the world – those who have a net personal wealth of at least $110,000.[287] According to the list in 2021, China is home to six of the world's top ten cities (Beijing, Shanghai, Shenzhen, Hong Kong,Hangzhou andGuangzhou in the 1st, 2nd, 4th, 5th, 8th and 9th spots, respectively) by the highest number of billionaires, which is more than any other country.[285] As of January 2021, China had 85 female billionaires, two-thirds of the global total.[288]
The average income of a rural resident in China is 30% of the average income for an urban resident.[106]: 191 The rural population is relatively older as the rural youth migrate to cities for higher earning jobs while the aged stay behind. Much of this rural population works small plots of land in order to survive and have little earning power. Former Chinese Premier Li Keqiang stated, in 2020, that 600 million Chinese live on or under 1,000 yuan per month.[289][290] At a conversion rate of 7 yuan to the dollar, this translates to $143 per month. A family of 3 at this income level would have a yearly income of $5,150. The difference in income is also a reflection of the difference in retirement payments to urban retirees versus rural retirees. Urban workers receive much more a month in retirement benefits on average compared to rural/farm workers who receive a pittance.[291][292] Despite income inequality in China, the absolute income of nearly all income groups has risen quickly.[108]: 204 From 1988 to 2018, China's rural and urban populations had per capita increases inreal income (i.e., accounting for inflation) of 8–10 times.[108]: 204
China's economic growth led to a major decrease in world inequality.[108]: 202 Since China's reform and opening up, more than 1 billion Chinese people have been lifted out of poverty.[293]: 202 The majority of global poverty reduction between 1981 and 2008 occurred in China.[108]: 202 As academic Lan Xiaohuan writes, during that period, "the number of poor people in the world outside China remained more or less unchanged. It can therefore be concluded that achievements in global poverty reduction come mainly from China."[108]: 202–203 The historical consensus is that the policies of theMao-era significantly reducedpoverty.[294]
In terms of domesticsaving, defined as combined saving of households, businesses, and governments, China is the world's largest saving country as of 2022.[295]: 27
In 1979–1980, the state reformed factories by giving wage increases to workers, which was immediately offset by sharply risinginflation rates of 6–7%. The reforms also dismantled the iron rice bowl, which meant it witnessed a rise in unemployment in the economy. In 1979–80 there were twenty million unemployed people.[296]
Urban wages rose rapidly from 2004 to 2007, at a rate of 13 to 19% per year with average wages near $200/month in 2007.[297] By 2016 the average monthly wage for workers engaged in manufacturing goods for export was $424. This wage, combined with other costs of doing business in China, had, more or less, equalized any Chinese cost advantage with respect to developed economies.[298]
The government's tax revenues primarily result from indirect taxes like the value added tax.[160]: 6 China's personal income tax accounts for about 6.5% of tax revenues, as of 2024.[160]: 6 It is aprogressive tax, with the top income tax bracket is taxed at 45% of income.[160]: 6
International trade makes up a sizeable portion of China's overall economy. Since 2018, firms have begun a broad reorganisation of supply chains away from China, with 244 documented relocation decisions between 2018 and 2023; Vietnam, Taiwan, the United States, Mexico, Thailand and India were the principal destinations, and only 15.6% of moves constituted reshoring to the home country.[299] Companies predominantly pursued “China-plus-many” strategies that spread production across multiple countries rather than exiting China altogether, with two-thirds (66.4%) of moves involving multi-country portfolios.[299] Executive statements most frequently cited geopolitical tensions (164 mentions) and increases in US-facing tariffs (163) as triggers for relocation, alongside cost and COVID-19 constraints.[299]
In 2010, China became the world's largest exporter, and has continued to be the world's largest exporter as of 2023.[300]: 88 It hasfree trade agreements with several nations, includingASEAN,Australia,Cambodia,New Zealand,Pakistan,South Korea andSwitzerland.[301][302] By 2020, China became the largest trading partner of more than 120 countries.[186]: 228 As of 2022[update], China'slargest trading partners are ASEAN, the European Union, Japan, South Korea, Taiwan, Australia, Russia, Brazil, India, Canada, and the United Kingdom.[20]
During theCold War, a meaningful segment of China's trade with theThird World was financed through grants, credits, and other forms of assistance. However, afterMao Zedong's death in 1976, these efforts were scaled back. After which, trade with developing countries became negligible, though during that time, Hong Kong andTaiwan both began to emerge as major trading partners.
Since economic reforms began in the late 1970s, China sought to decentralize its foreign trade system to integrate itself into the international trading system. In November 1991, China joined theAsia-Pacific Economic Cooperation (APEC) group, which promotesfree trade and cooperation in the economic, trade, investment, and technology spheres. China served as APEC chair in 2001, and Shanghai hosted the annual APEC leaders meeting in October of that year.
China became a member of theWorld Trade Organization in 2001.[303] The completion of its accession protocol and Working Party Report paved the way for its entry into the WTO on 11 December 2001, after 16 years of negotiations, the longest in the history of theGeneral Agreement on Tariffs and Trade. However, U.S. exporters continue to have concerns about fair market access due to China's restrictive trade policies and U.S. export restrictions. In October 2019, Chinese Vice Premier Han Zheng promised to further decrease tariffs and remove non-tariff barriers for global investors, he also welcomed multinational companies to invest more in China.[304]
China's global trade exceeded $4.16 trillion at the end of 2013, having broken the hundred-billion mark in 1988 and half a trillion by 2001. China global trade exceeded US$6 Trillion in 2021[306] The table below shows the average annual growth (in nominal US dollar terms) of China's foreign trade during the reform era:[307]
| Period | Two-way trade | Exports | Imports |
|---|---|---|---|
| 1981–1985 | +12.8% | +8.6% | +16.1% |
| 1986–1990 | +10.6% | +17.8% | +4.8% |
| 1991–1995 | +19.5% | +19.1% | +19.9% |
| 1996–2000 | +11.0% | +10.9% | +11.3% |
| 2001–2005 | +24.6% | +25.0% | +24.0% |
| 2006–2010 | +15.9% | +15.7% | +16.1% |
| 2016–2021 | +11.0% |
The vast majority of China's imports consists of industrial supplies and capital goods, notably machinery and high-technology equipment, the majority of which comes from the developed countries, primarily Japan[citation needed] and the United States[citation needed]. Regionally, almost half of China's imports come from East and Southeast Asia, and about a fourth of China's exports go to the same destinations[citation needed]. About 80 percent of China's exports consist of manufactured goods, most of which are textiles and electronic equipment, with agricultural products and chemicals constituting the remainder. Out of the five busiestports in the world, three are in China.[citation needed] By 2022, trade between China and Russia reached a record $190 billion,[20] with China becoming Russia's trading partner.[308]
Export growth has continued to be a major component supporting China's rapid economic growth. To increase exports, China pursued policies such as fostering the rapid development of foreign-invested factories, which assembled imported components into consumer goods for export and liberalizing trading rights. Particularly since 2000, the product complexity of China's exports have increased.[108]: 139 This has been driven both by increasing technical capabilities and infrastructure as well as factors like China's business and legal environment.[108]: 139
China is a member of theRegional Comprehensive Economic Partnership (RCEP), the world's largest free-trade area which was signed into agreement in November 2020. The RCEP, which includes China, Japan, South Korea, Australia, New Zealand and the ASEAN nations, represents about a third of the world's population and 29% of global gross domestic product. The RCEP aims to eliminate tariffs on a variety of products within 20 years.[309] On 17 September 2021, China formally applied to join another large Asia-Pacific free-trade pact, theComprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).[310]
From 1992 until at least 2023, China has been either the number one or number two worldwide destination for foreign direct investment.[106]: 81 In 2022, China attracted $180 billion.[311] As of the end of June 2020, FDI stock in China reached US$2.947 trillion, and China's outgoing FDI stock stood at US$2.128 trillion. Relocation decisions in 2018–2023 often leveraged established supplier relationships—67% of recorded capacity shifts went to existing suppliers overall (including about 60% in Vietnam and about 90% in Mexico)—with a gradual rise in new-supplier entries as firms expanded or built dual supply chains.[299] The total foreign financial assets owned by China reached US$7.860 trillion, and its foreign financial liabilities US$5.716 trillion, making China the second-largest creditor nation after Japan in the world.[312]
China's investment climate has changed dramatically with more than two decades of reform. In the early 1980s, China restricted foreign investments to export-oriented operations and required foreign investors to form joint-venture partnerships with Chinese firms. TheEncouraged Industry Catalogue sets out the degree of foreign involvement allowed in various industry sectors. From the beginning of the reforms legalizing foreign investment, capital inflows expanded every year until 1999.[313] Foreign-invested enterprises account for 58–60% of China's imports and exports.[314]
Since the early 1990s, the government has allowed foreign investors to manufacture and sell a wide range of goods on the domestic market, eliminated time restrictions on the establishment of joint ventures, provided some assurances againstnationalization, allowed foreign partners to become chairs ofjoint venture boards, and authorized the establishment of wholly foreign-owned enterprises, now the preferred form of FDI. In 1991, China granted more preferential tax treatment forWholly Foreign Owned Enterprises and contractual ventures and for foreign companies, which invested in selected economic zones or in projects encouraged by the state.[citation needed]
China also authorized some foreign banks to open branches in Shanghai and allowed foreign investors to purchase special "B" shares ofstock in selected companies listed on the Shanghai and Shenzhen Securities Exchanges. These "B" shares sold to foreigners carried no ownership rights in a company. In 1997, China approved 21,046 foreign investment projects and received over $45 billion in foreign direct investment. China revised significantly its laws on Wholly Foreign-Owned Enterprises and China Foreign Equity Joint Ventures in 2000 and 2001. The Vice Minister of Finance Zhu Guangyao announced, foreign investors will be allowed to own up to 51% on domestic financial service companies. Formerly foreign ownership was limited to a 49% stake in these firms.[315]
Foreign investment remains a strong element in China's rapid expansion in world trade and has been an important factor in the growth of urban jobs. China's economic leadership on global capital flows emphasizes long-term infrastructure and development finance over short-term flows which, under the current order, have imposed large costs on many economies.[316] In 1998, foreign-invested enterprises produced about 40% of China's exports, and foreign exchange reserves totaled about $145 billion. Foreign-invested enterprises today produce about half of China's exports (the majority of China's foreign investment come from Hong Kong,Macau and Taiwan), and China continues to attract large investment inflows. However, the Chinese government's emphasis on guiding FDI into manufacturing has led to market saturation in some industries, while leaving China's services sectors underdeveloped. From 1993 to 2001, China was the world's second-largest recipient of foreign direct investment (FDI) after the United States, receiving $39 billion in 1999 and $41 billion in 2000. China is now one of the leading FDI recipients in the world, receiving almost $80 billion in 2005 according to World Bank statistics. In 2006, China received $69.47 billion.[317] By 2011, with the U.S. seeing a decline in foreign investment following the 2008 financial crisis, China overtook it as the top destination for FDI, receiving over $280 billion that year.[318]
Amid slowing economic conditions and a weakening yuan in 2015, December of that year saw a 5.8% drop in FDI to China.[319] While China's rank as the top receiver of FDI continued through 2014, the slowing of inbound investment in 2015 combined with a massive rebound in foreign investment to the United States resulted in the U.S. reclaiming its position as the top investment destination.[320] Data from the American Chamber of Commerce in China's2016 China Business Climate Survey confirms this trend, although it also demonstrates that China remains a top investment destination. This survey of over 500 members found that "China remains a top three investment priority for six out of ten member companies," though this is a decline from the 2012 high of eight out of ten respondents considering China a top priority.[321]
Foreign exchange reserves totaled $155 billion in 1999 and $165 billion in 2000. Foreign exchange reserves exceeded $800 billion in 2005, more than doubling from 2003. Foreign exchange reserves were $819 billion at the end of 2005, $1.066 trillion at the end of 2006, $1.9 trillion by June 2008. In addition, by the end of September 2008 China replaced Japan for the first time as the largest foreign holder of US treasury securities with a total of $585 billion, vs Japan $573 billion. China's foreign exchange reserves are thelargest in the world.[322]
As part of its WTO accession, China undertook to eliminate certain trade-related investment measures and to open up specified sectors that had previously been closed to foreign investment. New laws, regulations, and administrative measures to implement these commitments are being issued. Major remaining barriers to foreign investment include opaque and inconsistently enforced laws and regulations and the lack of a rules-based legal infrastructure. Warner Bros., for instance, withdrew its cinema business in China as a result of a regulation that requires Chinese investors to own at least a 51 percent stake or play a leading role in a foreign joint venture.[323]
Another major development in the history of foreign investment in China was the establishment of theShanghai Free Trade Zone in September 2013.[324] The Zone is considered a testing ground for a number of economic and social reforms.[325][326] Critically, foreign investment is controlled via a "negative list" approach, where FDI is permitted in all sectors unless explicitly prohibited by the inclusion of a given sector on thenegative list published by theShanghai Municipal Government.[327]
On 15 March 2019, China'sNational People's Congress adopted theForeign Investment Law,[328] which came into effect on 1 January 2020. Foreign investment in China comes with a number of ethical risks which pose major challenges which investors must navigate.[329]
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Outward foreign direct investment is a new feature of Chinese globalization, where local Chinese firms seek to make investments in both developing and developed countries.[330] It was reported in 2011 that there was increasing investment by capital rich Chinese firms in promising firms in the United States. Such investments offer access to expertise in marketing and distribution potentially useful in exploiting the developing Chinese domestic market.[331]
Since 2005, Chinese companies have been actively expanding outside of China, in both developed and developing countries. In 2013, Chinese companies invested US$90 billion globally in non-financial sectors, 16% more than 2012.[332]
China is willing to invest in riskier countries.[107]: 1
During the administration of Xi Jinping, outbound foreign investment and infrastructure projects have often been construed as part of the Belt and Road Initiative.[107]: 1 Between 2013 and 2021, the Middle East was a prominent recipient of China's outbound FDI, particularly because of the importance of its energy supplies for China.[107]: 83
There are two ways Chinese companies choose to enter a foreign market: organic growth and Merge & Acquisition (M&A). Many Chinese companies would prefer M&A for the following reasons:
At the beginning, state-owned enterprises dominate the foreign acquisition and most of the money goes to oil and minerals. Since 2005, more and more private companies start to acquire non-raw material foreign companies. As of 2018, the top 15 outbound deals from Chinese companies:[335]
| Date | Acquirer | Acquirer industry | Target | Target industry | Target country | Deal value in millions of USD |
|---|---|---|---|---|---|---|
| 3 February 2016 | CNAC Saturn (NL) BV | Chemicals | Syngenta AG | Chemicals | Switzerland | 41,840.11 |
| 23 July 2012 | CNOOC Canada Holding Ltd | Other financials | Nexen Inc | Oil and gas | Canada | 19,119.31 |
| 1 February 2008 | Shining Prospect Pte Ltd | Other financials | Rio Tinto PLC | Metals and mining | United Kingdom | 14,284.17 |
| 2 June 2017 | China Investment Corp | Alternative financial investments | Logicor Ltd | Non residential | United Kingdom | 13,742.43 |
| 14 July 2017 | Nesta Investment Holdings Ltd | Other financials | Global Logistic Properties Ltd | Non residential | Singapore | 11,553.58 |
| 22 August 2017 | China Unicom (BVI) Ltd | Telecommunications services | China Unicom Hong Kong Ltd | Telecommunications services | Hong Kong | 11,255.81 |
| 6 October 2016 | Park Aerospace Holdings Ltd | Transportation and infrastructure | C2 Aviation Capital LLC | Transportation and infrastructure | United States | 10,380.00 |
| 14 October 2015 | China Tower Corp Ltd | Telecommunications services | China-Telecommun tower asts | Wireless | China | 9,948.41 |
| 21 June 2016 | Halti SA | Other financials | Supercell Oy | Software | Finland | 8,600.00 |
| 24 June 2009 | Mirror Lake Oil & Gas Co Ltd | Oil and gas | Addax Petroleum Corp | Oil and gas | Switzerland | 7,157.40 |
| 1 October 2010 | China Petrochemical Corporation | Oil and gas | Repsol YPF Brasil SA | Oil and gas | Brazil | 7,111.00 |
| 16 March 2016 | Anbang Insurance Group Co Ltd | Insurance | Strategic Hotels & Resorts Inc | REITs | United States | 6,500.00 |
| 24 October 2016 | Hna Tourism Grp Co Ltd | Travel services | Hilton Worldwide Holdings Inc | Hotels and lodging | United States | 6,496.88 |
| 17 February 2016 | Tianjin Tianhai Investment Co Ltd | Transportation and infrastructure | Ingram Micro Inc. | Computers and peripherals | United States | 6,067.41 |
| 22 March 2015 | Marco Polo Industrial Hldg SpA | Other financials | Pirelli & C SpA | Automobiles and components | Italy |
However, the fast growth and M&A deals did not change consumers' low quality and low-price perception of Chinese goods and brands. According to market consecutive research by the Monogram Group, a Chicago-based advertising agency, in 2007, 2009, 2011 and 2012, American consumers' willingness to purchase Chinese products across all categories except PC remained the same or became worse during 2007–2012. The only sector in which Americans were more likely to purchase was personal computers.[336]
From 1993 to 2010, Chinese companies have been involved as either an acquiror or acquired company in 25,284mergers and acquisitions with a total known value of US$969 billion.[337]
China's estimated employed labor force in 2005 totaled 791 million people, about 60% of the total population. During 2003, 49% of the labor force worked inagriculture,forestry, andfishing; 22% inmining,manufacturing,energy, andconstruction industries; and 29% in theservices sector and other categories. In 2004 some 25 million persons were employed by 743,000 private enterprises.[citation needed]
In January 2016, atwo-child policy replaced theone-child policy, which was in turn was replaced with athree-child policy in May 2021.[339] In July 2021, all family size limits as well as penalties for exceeding them were removed.[340]
TheAll-China Federation of Trade Unions is the country's only legally permissible trade union. Attempts to form trade unions independent of the ACFTU have been rare and short-lived. One notable example is theBeijing Workers' Autonomous Federation formed during the1989 Tiananmen Square protests and massacre. Martial Law Command Headquarters issued a public notice declaring the BWAF an illegal organization and ordering it to disband on the grounds that Federation leaders were among "the main instigators and organizers in the capital of the counterrevolutionary rebellion.[341][342]
As of 2024, China has one of the lowestretirement ages among major world economies, with many working women eligible for retirement at 50 and men at 60.[343]: 167
China has the world's longest and most extensively used high-speed rail network in the world — the network extends over 45,000 kilometers.[344]
China's transportation policy, influenced by political, military, and economic concerns, has undergone major changes since 1949. Immediately after the People's Republic was founded, the primary goal was to repair existing transportation infrastructure in order to meetmilitary transport andlogistics needs as well as to strengthen territorial integrity. During most of the 1950s, new road and rail links were built, while at the same time old ones were improved. During the 1960s much of the improvement of regional transportation became the responsibility of the local governments, and many small railways were constructed. Emphasis was also placed on developing transportation in remote rural, mountainous, and forested areas, in order to integrate poorer regions of the country and to help promote economies of scale in the agricultural sector.[citation needed]
Before the reform era began in the late 1970s, China's transportation links were mostly concentrated in the coastal areas and access to the inner regions was generally poor. This situation has been improved considerably since then, as railways and highways have been built in the remote and frontier regions of the northwest and southwest. At the same time, the development of international transportation was also pursued, and the scope ofocean shipping was broadened considerably.[citation needed]
Freighthaulage is mainly provided byrail transport. The rail sector is monopolized byChina Railway and there is wide variation in services provided. In late 2007 China became one of the few countries in the world to launch its own indigenously developedhigh-speed train.[345] As rail capacity is struggling to meet demand for the transport of goods and raw materials such as coal, air routes, roads and waterways are rapidly being developed to provide an increasing proportion of China's overall transportation needs.[346]
Some economic experts have argued that the development gap between China and other emerging economies such as Brazil, Argentina and India can be attributed to a large extent to China's early focus on ambitious infrastructure projects: while China invested roughly 9% of its GDP on infrastructure in the 1990s and 2000s, most emerging economies invested only 2% to 5% of their GDP. This considerable spending gap allowed the Chinese economy to grow at near optimal conditions while many South American economies suffered from various development bottlenecks such as poor transportation networks, aging power grids and mediocre schools.[347]
According toWIPO, China is the largest source of patent filings globally. China accounts for more than half of global patent contributions.[348]
Science and technology in China has in recent decades developed rapidly. The Chinese government has placed emphasis through funding, reform, and societal status on science and technology as a fundamental part of the socio-economic development of the country as well as for national prestige. China has made rapid advances in areas such as education, infrastructure, high-tech manufacturing, artificial intelligence,[349]academic publishing,patents and commercial applications. China is now increasingly targeting indigenous innovation and aims to reform remaining weaknesses. ItsThousand Talents Plan aims to attract innovative Chinese academics living abroad (as well as some foreigners) back to China in support of its economic innovation goals.[350]
A 2023Australian Strategic Policy Institute study of what it deemed as 44 critical technologies concluded that China leads the world in 37 of them, including 5G internet, electric batteries, and hypersonic missiles.[107]: 155
On Jan. 26, 2017, S&P Global Ratings affirmed the 'AA-' long-term and 'A-1+' short-term sovereign credit ratings on China. The outlook on the long-term rating remains negative
Even the most pessimistic observers think China will still grow by 4 or 5 percent
By any measure, the speed and scale of China's poverty reduction is historically unprecedented.
The outlook is uncertain again amid financial sector turmoil, high inflation, ongoing effects of Russia's invasion of Ukraine, and three years of COVID
'... China is ... planning to grow its high technology and high value-added industries. It is championing seven "strategic emerging industries": energy efficient and environmental technologies; new energy; new-energy vehicles; next generation information technology; biotechnology; advanced equipment manufacture; and new materials.'
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