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1. (GDP) with USD 214 billion; 35

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1.      China’s
Economic

·        
Brief History

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For
centuries China has been widely acknowledged as a prominent civilization, overtaking
the major parts of the globe in various sectors despite the nation’s downfall
in the 19th and early 20th century. The key changes
initiated since the implementation of the Chinese Communist Party under the
guidance of Mao Zedong, the execution of control over the consumptions expenses
of the population as well as the promotion of industry. After 1978, the
economic reform under Mao Zedong’s successor, Deng Xiaoping who is at the core
of the new generation leadership has prosperously led the country to the
flourish of economic development as the concentration is now diverted to a more
market-oriented economic development, in parallel with the much improved the
living standards of the people even with the remain political control.

Since
the implementation of the economic reforms—the country ranked ninth in nominal
gross domestic product (GDP) with USD 214 billion; 35 years later it jumped up
to second place with a nominal GDP of USD 9.2 trillion. The economic growth
rate of China has constantly been increasing and eventually reached its peak in
the 1990s as the growth skyrocketed to a high of 15,3 %, after then the GDP
growth rate started to stabilize.

·        
Economic crisis

Until
the economic crisis in 2008, in which China’s economic growth rate has dropped
dramatically to only 6% in 2009, however China weathered the global economic
crisis better than most other countries.  State Council revealed a CNY 4.0 trillion (USD
585 billion) stimulus package in an effort to protect from the financial
crisis. The program powered economic growth generally through huge investment developments,
which caused worries that the nation’s asset could be on the verge of becoming
a bubble, overinvestment and surplus capacity in some industries.  However, China went through the financial
crisis in good shape, with GDP rising above 9%, low inflation and a sound
fiscal position. Even though, the policies applied during the crisis to foster
economic growth worsened the country’s macroeconomic imbalance.

Graph
1: China GDP Annual Growth rate1

 

2.      China’s
Economic Growth components

China
has constructed its major economic growth on low-cost exports of machinery and
equipment; they have soon diverse themselves onto the world’s manufacturing
hub, where the secondary sector (comprising industry and construction) signified
the largest share of GDP.  Enormous
government spending went into state-owned companies to maintain those exports. The
dominating companies include the big three energy corporations: PetroChina,
Sinopec and China National Offshore Oil Corporation. These state companies are
less profitable than private businesses. They return only 4.9 percent on assets
paralleled to 13.2 percent for private companies.

However,
in recent years, China’s transformation pushed the tertiary sector and, in
2013, it converted to be the largest category of GDP with a share of 46.1%,
while the secondary sector still accounted for 45.0% of the country’s total output.
Meanwhile, the primary sector’s weight in GDP has minimized intensely since the
country opened to the world.

 

 

·        
Exports

China
was the world’s largest exporter from 2013 to 2015. It exported approximately $2
trillion of its production in 2016. In which in 2015, 18% of its exports are to
the United States. China’s trade with Hong Kong was nearly as much (14.6 %).
Its trade with Japan (6 %) and South Korea (4.5 %) was much less. China stimulated
the trade integration with African nations on the infrastructure with oil in
return. It augmented trade agreements with Southeast Asian nations (ASEAN-China
Free Trade Area) and many Latin American countries.

China
manufacture for major foreign businesses, including U.S. companies. They ship
raw materials to China in which the factory workers will continue to build the
final products and ship them back to the United States. In this way, a lot of
China’s so-called “exports” are technically American products. China mainly
sends out electrical equipment and other types of machinery. This includes
computers and data processing equipment as well as optical and medical
equipment. Alongside with the exportation of apparel, fabric and textiles but
most of all China is the world’s largest exporter of steel.

·        
Imports

China is the world’s third largest importer. In 2016,
it imported $1.4 trillion. That includes the importation of raw commodities
from Latin America and Africa, such as oil and other fuels, metal ores,
plastics and organic chemicals. It’s the world’s largest importer of aluminum
and copper.

       As the consumption of commodity within
China China’s has been rising, it has stimulated a world-wide boom in mining
and agriculture. Unfortunately, suppliers over-produced, creating too much
supply. As a result, prices cratered in 2015. As China’s growth slows, prices
for commodities used in manufacturing, such as metals, will drop.

 

 

 

3.      China’s
growth stabilization

Prior
to the global economic crisis a decade ago, the Chinese economy was developing
at a swift pace. But when the crisis hit, the growth rate fell relatively
sharply. Thanks to a $4 trillion stimulus package, growth soon reached its
trough and began to climb again, reaching 12.2% year on year in the first
quarter of 2010.

Soon
after, however, monetary tightening put economic growth back on a descending route,
urging the government to untie policy and lead mini-stimulus packages in late
2011 and early 2012. This produced a short-lived and moderate rebound, with
economic growth again beginning to slide, albeit less steeply, soon after.

Finally,
in 2016, Chinese economic development initiated to steady again, with the
annual rate reaching 6.7% for three quarters in a row. The latest figures show
that China’s economy grew by 6.8% in the third quarter of 2017, leading many
economists to offer rather optimistic forecasts for the coming year.

Though
China’s financial system is tense with worrying exposures, many Chinese
economists believe the country has at last entered a period of stable annual
growth of about 6.5%—a level in line with potential. The International Monetary
Fund has echoed this view in its latest World Economic Outlook, predicting 6.8%
growth in 2017 and a 6.5% rate in 2018.

 

4.      Summary

The
China’s economic growth has illustrated an astonishing plan and implementation
in which is at most obvious with its output. The preparation of the economic
reforms to prepare for the upcoming force and crisis especially in 2008 is the
perfect example from China which shows the fundamental for the adaptation is
certainly crucial for a country’s economic foundation for the future

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