Friday Facts, Business and the Economy

(It may not be Friday for you, but it is for me, this install is early!)

This weeks install of Friday Facts deals with Business and the Economy in China. This is a long one, but heck, China is a country with a history 10 times as old as the US...

To see the previous version, click here.

BUSINESS
currency = yuan (CNY), current exchange rate = 8.91 Yuan/dollar

GDP (2004): $1.65 trillion (exchange rate based), 9.5% growth rate.

Per capita GDP (2004): $1,200 (exchange rate based).

Agriculture: Products--Among the world's largest producers of rice, potatoes, sorghum, peanuts, tea, millet, barley;

commercial crops include cotton, other fibers, oilseeds, pork and fish; produces variety of livestock products.

Trade (2004): Exports--$593 billion: mainly electrical machinery and equipment, power generation equipment, apparel, toys, footwear.

Main trade partners--U.S., Hong Kong, Japan, EU, South Korea, Singapore.

Imports--$561 billion(nearly equal to it's exports... but not in the US, interesting that the imbalance is not present elsewhere): mainly electrical equipment, power generation equipment, petroleum products, chemicals, steel. Main partners--Japan, EU, Taiwan, South Korea, U.S., Hong Kong.

ECONOMY
Economic Reforms
Since 1979, China reformed and opened its economy. China’s ongoing economic transformation has had a profound impact not only on China but on the world. The market-oriented reforms China has implemented over the past two decades have unleashed individual initiative and entrepreneurship.

The result has been the largest reduction of poverty and one of the fastest increases in income levels ever seen. China today is the sixth-largest economy in the world. It is the fastest growing economy, and in 2004 its $1.65 trillion economy was about 1/7 the size of the U.S. economy.

In the 1980s, China pursued agricultural reforms, the government also encouraged nonagricultural activities. China also relied more upon foreign financing and imports.

During the 1980s, these reforms led to average annual rates of growth of 10% in agricultural and industrial output. Rural per capita real income doubled.

China became self-sufficient in grain production; rural industries accounted for 23% of agricultural output, helping absorb surplus labor in the countryside.

At the end of 1988, in reaction to a surge of inflation caused by accelerated price reforms, the leadership introduced an austerity program.

China's economy regained momentum in the early 1990s, pushing market reforms, stating that China's key task in the 1990s was to create a "socialist market economy."

China’s economy grew at an average rate of 10% per year during the period 1990-2004, the highest growth rate in the world.

China’s gross domestic product (GDP) grew 9.3% in 2003, and even faster, 9.5%, in 2004, despite attempts by the government to cool the economy.

China’s total trade in 2004 surpassed $1.1 trillion, making China the world’s third-largest trading nation after the U.S. and Germany.

High numbers of non-performing loans weigh down the state-run banking system. Inefficient state-owned enterprises (SOEs) are still a drag on growth, despite announced efforts to sell, merge, or close the vast majority of SOEs.

Rising inequality is evident between the more highly developed coastal provinces and the less developed, poorer inland regions.

According to World Bank estimates, more than 152 million people in China in 2003 - mostly in rural areas of the lagging inland provinces - still live in poverty, on consumption of less than US$1 a day.