CHINESE ECONOMY

SECTION – FD-1

PRESENTED BY:
GUNDEEP SINGH
JASDEEP SINGH
SANMEET SINGH
JAI KAPOOR
NIKHIL AHUJA
TABREZ MOHAMMAD

PRESENTED TO : MRS.GOPIKA KUMAR

 Discovering
China

A view of China taken from a satellite located 35,785 km directly above China at the latitude
of 47 N, and longitude 117 E. http://www.chinapage.com/map/map.html
North, South , East, West
Natural barriers isolated China from all other civilizations.

Mongolian Plateau

Taklimakan Desert Gobi Desert

Plateau of Tibet Pacific Ocean

Himalaya Mountains
About China's Economic System
• China's leaders call their economic system
"market socialism." It has also been called
"state capitalism" and a "market-oriented
mixed economy under one-party rule.”

•The country will accelerate the clean-up,

revision and perfection of its economic laws
and regulations.
•Since the People's Republic of China was formed in
1949 until 1978, China had a planned socialist
economy like the former Soviet Union.
•The government owned all factories and farms.
Planning committees controlled all production. Market
forces were often ignored when they conflicted with
plans of the state.
•In 1978 China introduced farm reforms. Farmers
could grow what they wanted and sell much of it at
market prices. This greatly increased farm production.
•In 1984 China introduced reforms to their cities
designed to create a "socialist market economic
system." Many state-owned companies were
 CHINA’S POLITICAL SYSTEM
The Constitutional System
 The Constitution is the fundamental law of the state.
 The existing Constitution was adopted for implementation by the 5th Session of
the 5th National People’s Congress on December 4, 1982. Amendments were
made to the Constitution respectively at the 1st Session of the 7th National
People’s Congress on April 12, 1988, the 1st Session of the 8th National People’s
Congress on March 29, 1993 and the 2nd Session of the 9th National People’s
Congress on March 15, 1999 and the last session was held on 27-10-2004. The
Party in Power
 The Communist Party is the sole party in power in China.
 Founded in 1921, the Communist Party of China (CPC) established the People’s
Republic of China in 1949 through years of armed struggle.
 The CPC now has more than 60 million members in more than 3 million
grassroots organizations.
 The CPC has established formal (through elections within the Party) and
informal (appointed by the organization of the higher level) organizations within
the Chinese government and various levels and walks of life in the country.
 The Central Administrative System
 The administrative system refers to a series of regulations and practices in
regard to the composition, system, power and activities of the state
administrative organs.
 The central administrative system in the People's Republic of China
includes: the central administrative organs under the system of the National
People's Congress and the leadership of the central administrative organs
over local administrative organs at various levels.
 The central administrative organ is the State Council of the People's
Republic of China . The State Council is the highest administrative organ of
the state

The Local Administrative System

 The local administrative system means the systems and practices of
establishing administrative regional divisions and setting up local
administrative organs in order to facilitate the implementation of local
administration.
 The Election System
 The election system here refers to the way citizens choose public
servants of the state. The election system of the People’s Republic
of China here refers to the election of deputies to the people’s
congresses at various levels.

 The election of deputies to the people’s congresses includes general

local election and the election of deputies from the armed forces, in
the special administrative regions and among Taiwan compatriots.

 The general election is applicable to the choice of local deputies

and deputies in ethnic self-government areas.
 Deng Xiaoping

Economy of China(PRC)

 From its founding in 1949 to late 1978, the People's Republic of China was a
Soviet-style centrally planned economy.
 Private businesses and capitalism were suppressed. To propel the country
towards a modern, industrialized communist society, Mao Zedong instituted
the Great Leap Forward. (a major economic failure and a great humanitarian
disaster.)
 In 1978, Deng Xiaoping initiated the PRC's market-oriented reforms under
one-party rule.
 Collectivization of the agriculture was dismantled and farmlands were
privatized to increase productivity.
 A wide variety of small-scale enterprises were allowed to flourish while the
government relaxed price controls and promoted foreign investment.
 Foreign trade was focused upon as a major vehicle of growth, which led to the
creation of Special Economic Zones (SEZs) first in Shenzhen (near Hong Kong)
and then in other Chinese cities
 STATISTICS OF CHINA
GDP (Nominal) (2007) $3.42 trillion (ranked 3rd)
(2008) $4.33 trillion (official data)

GDP (PPP) (2008) $7.8 trillion (ranked 2nd)

GDP per capita (Nominal) (2008) $3,180 (ranked 104th)

GDP per capita (PPP) (2008) $6,100 (ranked 105th)

GDP growth rate (2008) 9.0% (official data)

GDP by sector (2008) agriculture (primary) (11.3%)
industry (secondary) (48.6%)
services (tertiary) (40.1%)
note: industry includes construction (5.5%)

GDP by components, % (2006) Private consumption (36.4)

Government consumption (13.7)
Gross fixed investment (40.9)
Exports of goods/services (39.7)
Imports of goods/services (-31.9)

Domestic demand growth (2002-06 av) 9.3%

Public debt (2006) 22.1% of GDP

External debt (2006) $315 billion

Foreign exchange reserves $1.95 trillion

(2008)

Revenues (2008) $868.6 billion

Expenditures (2008) $850.5 billion; including capital

expenditures of $NA

Budget balance (2006) -7.0% of GDP (deficit)

Corporate income tax rate 33% (official)

(2006)
 Imbalances: China
 Reliance on investment expansion increased
growth volatility
 Diminishing returns  misallocation of capital 
non-performing loans
 Excess capacity  deflation
 Insufficient domestic absorption
 Reliance on export expansion
 Trade disputes incite protectionism in major export
markets
THANK YOU