Post by unlawflcombatnt on Feb 26, 2007 14:20:55 GMT -6
Due to frequent references to China's economy in current financial commentary, I've decided to post some the latest information from the CIA's site on China's economy below. Since their link seems to change often, I thought it would be best to simply quote most of the important and current information about their economy. Below is the latest information as of February 26, 2007.
China
China's economy during the last quarter century has changed from a centrally planned system that was largely closed to international trade to a more market-oriented economy that has a rapidly growing private sector and is a major player in the global economy. Reforms started in the late 1970s with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, the foundation of a diversified banking system, the development of stock markets, the rapid growth of the non-state sector, and the opening to foreign trade and investment. China has generally implemented reforms in a gradualist or piecemeal fashion, including the sale of equity in China's largest state banks to foreign investors and refinements in foreign exchange and bond markets in 2005....130 million Chinese fall below international poverty lines....there are large disparities in per capita income between regions. The government has struggled to: (a) sustain adequate job growth for tens of millions of workers laid off from state-owned enterprises, migrants, and new entrants to the work force..."From 100 to 150 million surplus rural workers are adrift between the villages and the cities, many subsisting through part-time, low-paying jobs.... In July 2005, China revalued its currency by 2.1% against the US dollar... In 2006 China had the largest current account surplus - nearly $180 billion....
GDP (purchasing power parity): $10 trillion (2006 est.)
GDP (official exchange rate): $2.512 trillion (2006 est.)
GDP - real growth rate: 10.5% (official data) (2006 est.)
GDP - per capita (PPP): $7,600 (2006 est.)"
by extrapolation:
*GDP - per capita (official exchange rate): $1,900 (2006 est.)*
$1,900/year is the average buying power of each Chinese individual in terms of purchasing American imports.
"GDP
GDP - composition by sector:
agriculture: 11.9%
industry: 48.1%
services: 40%
note: industry includes construction (2006 est.)
Labor force: 798 million (2006 est.)
Labor force - by occupation:
agriculture: 45%
industry: 24%
services: 31% (2005 est.)
Unemployment rate: 4.2% official registered unemployment in urban areas in 2005; substantial unemployment and underemployment in rural areas
Population below poverty line: 10% (2004 est.)
Household income or consumption by percentage share: lowest 10%: 1.8%
highest 10%: 33.1% (2001)
Distribution of family income - Gini index: 44 (2002)
Inflation rate (consumer prices): 1.5% (2006 est.)
Investment (gross fixed): 44.3% of GDP (2006 est.)
Budget: revenues: $446.6 billion
expenditures: $489.6 billion; including capital expenditures of $NA (2006 est.)
Public debt: 22.1% of GDP (2006 est.)"
In summary, China has roughly 100-150 million unemployed/partially employed workers. (Compare this to the "official" U.S. unemployment of 7.5 million.) China's surplus labor will continue to put major downward pressure on wages in the foreseeable future. (There is no reason for employers to raise wages to obtain workers when there is such a huge surplus.)
China's exchange rate per capita income is only $1,900. And this still overstates the spending power of individual Chinese consumers, as 44% of China's GDP goes into "fixed investment." (U.S. Gross Private Investment is about 17% of GDP.) Thus the ability of Chinese consumers to purchase American imports is considerably less than the $1,900/year income indicates.
It'll be a long time before China's consumers will create any significant export market for American production.
China
China's economy during the last quarter century has changed from a centrally planned system that was largely closed to international trade to a more market-oriented economy that has a rapidly growing private sector and is a major player in the global economy. Reforms started in the late 1970s with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, the foundation of a diversified banking system, the development of stock markets, the rapid growth of the non-state sector, and the opening to foreign trade and investment. China has generally implemented reforms in a gradualist or piecemeal fashion, including the sale of equity in China's largest state banks to foreign investors and refinements in foreign exchange and bond markets in 2005....130 million Chinese fall below international poverty lines....there are large disparities in per capita income between regions. The government has struggled to: (a) sustain adequate job growth for tens of millions of workers laid off from state-owned enterprises, migrants, and new entrants to the work force..."From 100 to 150 million surplus rural workers are adrift between the villages and the cities, many subsisting through part-time, low-paying jobs.... In July 2005, China revalued its currency by 2.1% against the US dollar... In 2006 China had the largest current account surplus - nearly $180 billion....
GDP (purchasing power parity): $10 trillion (2006 est.)
GDP (official exchange rate): $2.512 trillion (2006 est.)
GDP - real growth rate: 10.5% (official data) (2006 est.)
GDP - per capita (PPP): $7,600 (2006 est.)"
by extrapolation:
*GDP - per capita (official exchange rate): $1,900 (2006 est.)*
$1,900/year is the average buying power of each Chinese individual in terms of purchasing American imports.
"GDP
GDP - composition by sector:
agriculture: 11.9%
industry: 48.1%
services: 40%
note: industry includes construction (2006 est.)
Labor force: 798 million (2006 est.)
Labor force - by occupation:
agriculture: 45%
industry: 24%
services: 31% (2005 est.)
Unemployment rate: 4.2% official registered unemployment in urban areas in 2005; substantial unemployment and underemployment in rural areas
Population below poverty line: 10% (2004 est.)
Household income or consumption by percentage share: lowest 10%: 1.8%
highest 10%: 33.1% (2001)
Distribution of family income - Gini index: 44 (2002)
Inflation rate (consumer prices): 1.5% (2006 est.)
Investment (gross fixed): 44.3% of GDP (2006 est.)
Budget: revenues: $446.6 billion
expenditures: $489.6 billion; including capital expenditures of $NA (2006 est.)
Public debt: 22.1% of GDP (2006 est.)"
In summary, China has roughly 100-150 million unemployed/partially employed workers. (Compare this to the "official" U.S. unemployment of 7.5 million.) China's surplus labor will continue to put major downward pressure on wages in the foreseeable future. (There is no reason for employers to raise wages to obtain workers when there is such a huge surplus.)
China's exchange rate per capita income is only $1,900. And this still overstates the spending power of individual Chinese consumers, as 44% of China's GDP goes into "fixed investment." (U.S. Gross Private Investment is about 17% of GDP.) Thus the ability of Chinese consumers to purchase American imports is considerably less than the $1,900/year income indicates.
It'll be a long time before China's consumers will create any significant export market for American production.