China: Economic and Political Outline

Economic Overview

The global recession interrupted China’s dynamic of continuous growth. Chinese economy however showed itself very resilient to the crisis and its economic recovery surprised the observers by both its rapidity and its vigor. After the euphoria of the recovery, the GDP growth slowed down during the first two quarters of 2010, especially as an effect of the austerity measures adopted by the government in the field of bank lending, real estate and currency exchange. Since then, there has nonetheless been a resumption of more dynamic growth which should continue in 2011. For 2010, economic growth is estimated at 10.5%.

Chinese economy is driven by investment and domestic consumption, which is itself boosted by the increase in salaries and the new housing policy. In order to avoid the overheating of the economy, the government has announced new measures to fight inflation and to stabilize prices of basic agricultural commodities. Among Beijing’s priorities are also: infrastructure, industry modernization, opening the country to new technologies, healthcare, education and support for the countryside.

A large gap remains between the living standard of the cities and the countryside, between urban zones on the Chinese coast and the interior and western parts of the country, as well as between the urban middle classes and those who have not been able to profit from the growth. These inequalities are becoming increasingly worrisome for both the Chinese authorities and the investors. Although poverty has largely decreased in China, almost 10% of the population, i.e. more than 120 million people, continue to live on less than 1 USD a day.

Main Sectors of Industry

China has a highly diversified economy, dominated by the manufacturing and agricultural sectors.

The agricultural sector employs almost 40% of the active population and contributes up to about 10% to the GDP, although only 15% of the Chinese soil (about 1.2 M km ²) is arable. China is the most populated country in the world and one of the largest producers and consumers of agricultural produce. China is the leading global producer of cereals, rice, cotton, potatoes and tea. In terms of livestock, it also dominates sheep and pork livestock farming and the world’s production of fish products.

The mining sector occupies an important place in the Chinese economy, since the country’s subsoil is rich in energetic resources. China has significant coal reserves (the country's primary energy source), which account for two-thirds of the total primary energy consumption. It is the world leader in the production of certain ores (phosphate and titanium) and also has significant petrol and natural gas reserves. It is the world’s fifth biggest oil producer with 3.8 million barrels a year.

The industry and the construction sectors contribute approximately half of China's GDP. China has become one of the preferred destinations for the relocation of global manufacturing units because of a cheap labor market, even though the cost of labor has been increasing. China’s economic development has coincided primarily with the development of a competitive and outward-oriented manufacturing sector. More than half of the Chinese exports are made by companies with foreign capital. Their share in the sector's added-value varies according to the sector: more than 60% for electronics and less than 20% for the majority of producer goods. The Government sector still contributes approximately 40% to the GDP.

The services sector has not progressed, encumbered by public monopolies and restrictive regulations. The tertiary sector's share has remained at nearly a third of the GDP in the last 15 years.

Source: World Bank - Last Available Data.

Indicator of Economic Freedom

Score:

52.0/100

Position:

Mostly unfree

World Rank:

130/179

Regional Rank:

28/38

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation

Sources of General Economic Information

Ministries

Ministry of Foreign Trade and Economic Cooperation
Ministry of Finances (in Chinese)
State Administration for industry and commerce
Ministry of Land and Resources

Statistical Office

National statistical office of China

Central Bank

Bank of China

Stock Exchange

Shanghai stock exchange
Shenzen stock exchange

Other Useful Resources

Chinability

Main Online Newspapers

China Daily
Xinhuanet
The Economic observer online
South China Morning Post
People's daily Online
China.org.cn

Economic Portals

China Economic net

Political Outline

Type of State

The People's Republic of China is a communist state. Deng Xiao Ping had suggested the phrase "market socialism" to qualify the evolution of the PRC. China corresponds to a centralised unitary state completely managed by the Chinese Communist party with a great national administration, authoritative in its structure as well as its ideology.

Executive Power

The Chinese executive is supervised by a collegial body equipped with important powers, the National Business Council (CAE), under which are placed the Government commissions, ministries and certain organizations which have rank of a ministry.
According to the Constitution, the CAE is "the Supreme Administrative Body" of the Chinese Government, and even if the majority of important measures are decided by the Political Bureau of the Chinese Communist Party. The CAE thus plays an important role in the economic domain. The prime minister (Wen Jiabao) is the chief and heads the government, assisted by 4 Deputy Prime Ministers. The CAE also includes 5 National advisers, who, just like the Deputy Prime Ministers, have jurisdiction over several Ministries or Commissions of ministerial rank. The Secretary General of the government also belongs to the CAE.

Legislative Power

The legislature is mono cameral, composed of a National Popular Assembly (ANP), "Body of supreme power of the Government". In reality, made up of approximately 3000 designated deputies elected every five years by indirect vote by the local bodies and meeting only once per annum in congress in plenary session, it has become, during the eighties, a " simple case of resonance" of the local or sectional interests. Deputies are indeed the representatives of 23 provinces, the 5 areas and the 4 autonomous municipalities.

APN comprises a delegation of the People's Liberation Army. The Standing Committee of the National People's Assembly (CPAPN) is appointed by the Political Bureau of the Central committee of the Party. It sits instead of the APN during its recess and exercises all its powers. It is composed of a president, fifteen vice-presidents and 176 permanent members. The CPAPN sits regularly, but it is the Bureau of the APN which exerts daily the functions of the APN.

Eligibility is controlled by the PCC which also has a right to supervise the appointment of the executives and the senior officials of different administrative units.

Main Political Parties

The one and only political party in the country is CCP (Chinese Communist Party). Though there are eight other registered small parties but all of them are controlled by CCP.

Current Political Leaders

President: HU Jintao (since March 2003) - CCP
prime Minister: XI Jinping (since March 2008) - CCP

Next Election Dates

President: March 2013

Indicator of Freedom of the Press

World Rank:

174/179

Evolution:

3 places down compared to 2010

Source: Worldwide Press Freedom Index 2010, Reporters Without Borders

Indicator of Political Freedom

Ranking:

Not Free

Political Freedom:

7/7

Civil Liberties:

6/7

Map of freedom 2010
Source: Freedom House