Economy of the People's Republic of China

China officially the People's Republic of China (PRC), is the most populous state in the world, with over 1.3 billion citizens. It is the world's second-largest country by land area, and the third-largest in total area. Since economic liberalization began in 1978, the PRC's investment- and export-led economy has grown 90 times bigger and is now the fastest growing major economy in the world. -------------------------------------------------

China's annual average GDP growth between 2001 and 2010 was 10.5%, the Chinese economy is predicted to grow at an average annual rate of 9.5% between 2011 and 2015. -------------------------------------------------

It is a member of the WTO and is the world's second-largest trading power behind the US, with a total international trade value of US$2.21 trillion –1.20 trillion in exports (#1) and US$1.01 trillion in imports (#2). Its foreign exchange reserves have reached US$2.85 trillion at end of 2010; an increase of 18.7% over the previous year, making its reserves by far the world's largest. I will present some examples on how the Chinese market influences the markets of other countries. As we know their production is very cheap because they have very low labour costs, no environmental laws and have large tax benefits.

Europe and other countries are transferring a lot of its production to China because of these reasons. Fiat is aware of the importance of this perspective market, so it is adapted for the needs of specific Chinese market. Fiat cars made a special model sold only there. Many pharmaceutical companies, mostly from Germany have long been present in China. Almost most Japanese electronics manufacturers (for example Sony, Panasonic, etc (etcetera) produce many products in China. -------------------------------------------------

Chinese are well known for fake products. They produce a lot fake products of famous brand as clothes, shoes and fashion accessories. These things are very cheap but their quality is questionable. The same is with Hi Phone, which is very similar to I phone. Nowadays it is getting clear, that Chinese are regaining the position in the global economy they have already had. The reasons for this are:

* urbanisation, because 43 % of more than 1.3 billion Chinese today live in cities, while 20 years ago this number was 26 %, which clearly indicates the speed of chinese urbanisation. * Another reason is unqualified and cheap labour, which contributed a lot to Chinese economic expansion * -------------------------------------------------

Natural resources. China posesses a lot rare natural resources which are vital for today modern industry Advantages on specific economic sectors a.) Agriculture According to data from 2002 44 % of labour is employed in agriculture, which contributes 15,2 % of GDP. It has the most pigs, sheep and cows in the world and produces the most meat overall. However, in the near future, China will face serious difficulties producing enough food for its citizens. b.) --------------------------------------------

Mining and energy. Chinese ground contain a lot of different natural resources, gained in about 16.000 active mines. China is the biggest producer of vanadium, tin, mercury and second in lead. Coal is the most important energy source in China and represents 32% of its worldwide production. China also comes fifth in oil production worldwide and second in oil use. c.) Industry .Already before the socialist revolution, China had a very developed traditional marketing of paper, silk and ceramics. The most important intention of the socialist era was fast industrialization, especially of heavy industry. d.) -------------------------------------------------

Tourism. More than 40 million tourist visit China every year, despite undeveloped infrastructure, which ranks it on the fourth place in the world. The most touristic places are old royal cities like Beijing, Shanghay and Hongkong CURRENCY MANIPULATION

The United States has accused China of keeping its currency, the Yuan, artificially low in order to give Chinese export an advantage over competitors. China’s economy is primarily export-driven, so having a leg up on the international competition has allowed its economy to grow at staggering speed. CHINESE BOOM COULD BE TURNING INTO A BUBBLE

------------------------------------------------- If Chinese growth slows down, it would be recession-like period for China. This would threaten the employment of its billion-plus people, and could even pose the risk of a public upspring against the government. FORCED LABOR AND CHILD LABOR

Stories of forced labour usually involve abducting, compelling or tricking vulnerable children and adults, taking them to brick factories or coal mines, keeping them captive and forcing them to work for little or no pay. EXTREMELY BAD WORKING CONDITIONS

------------------------------------------------- The workers are underpaid, cheated out of their wages, forced into overtime, subjected to unsafe working conditions and denied medical assistance when they're injured. THE STRAIN ON ENVIROMENT ------------------------------------------------- Pollution has made cancer China’s leading cause of death. Ambient air pollution alone is blamed for hundreds of thousands of deaths each year. Nearly 500 million people lack access to safe drinking water. »MADE IN CHINA« LABEL

Label made in China has a negative connotation for most of us and I find it interesting that a lot of Chinese are sceptical about it too. Prejudices about Chinese consumer goods are: Doubt in quality

There is a very common prejudice that all Chinese products are low-quality. But, we divide China manufactory on two terms: "primitive China", which means a cheap low-quality production of small cooperatives, and "China factory", the high-quality goods produced on official, state-controlled Chinese factories. Doubts about originality

------------------------------------------------- Many buyers believe that all Chinese products are forgery. Indeed, most fakes in the world are produced by small semi Chinese firms. PREDICTIONS FOR FUTURE ------------------------------------------------- At the beginning I want to show you two pictures, so we can have a felling how quickly is China developing. On first picture is New York in year 1988 and projection for year 2013 and as you can see there is no really a big diference, but on the other hand if we take a look at second picture that shows Shanghai...well I dont know about you but I was fascinated when I saw this picture, because top picture was taken in 1990 and bottom picture in 2010, so in just 20 years it has changed completely. And that picture represents Chinese boom in last few decades, that will continue at least to the end of the century. Here are some predictions about Chinese future:

Influence China will try to use its growing influence to reshape the rules and institutions of the international system to better serve its interests, and other states in the system will start to see China as a growing security threat. Demography

------------------------------------------------- What does it mean for a billion-plus population to become ten years older? An incredible surge in senior citizens that will break the back of China's state pension system and health care system. Appreciation of Yuan

The idea is to make Chinese products more expensive, to curb exports and to increase the imports. Technology and Science It will soon become a big producer of knowledge goods such as computers, software and so on. All that, however, is predicated on two very big “ifs”—if the current Chinese growth rate continues, and if the country remains communist.