China: An Economic Overview

The Chinese economy has been experiencing an exceptional and rapid growth for three decades from a centrally planned to a market based economy with reforms started in 1978. According to the data gathered from the official website of the World Bank, during this time, it grew by a remarkable rate of 9.7% with an outstanding rate of 11% per year from 2003-2007, walking its way to become the worlds second largest economy by 2010. With a GDP of $5,926,612,009,750 in 2010, China has become one of the most influential participants in the global economy. In spite of the recent global crisis, Chinas growth rate was not affected and remained strong primarily because of its huge investment on infrastructure and heavy industry from private sectors, which only made the country a major player in foreign trade. Everywhere we go, we see Chinese products sold all around us. Because of the cheap selling price on Chinese goods and services, the demand for them is really high. However, in spite of Chinas niche in the global economy, it only has a per capita income of $4260, making it an upper-middle class country that has a lot of development needs, especially on poverty because of its large number of consumption-poor next to India, which ranked first. Although the percentage of Chinese people who live with less than $1.25 a day decreased from 16.3% in 2005 to 13.1% to 2008, half a billion of them are still suffering because of poverty. In addition, all good comes with bad. Even though China is doing great especially in foreign trade, it faces many challenges as well. This includes demographics such as issues relating to an aging population, internal migration of labor, huge disparity in equality, rapid urbanization, and environmental sustainability.