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1.Overview
China has experienced a remarkable period of rapid growth spanning three decades, shifting from a centrally planned to a market based economy with reforms begun in 1978. During this time, it grew at an average rate of about 9.7% per year, with exceptionally strong growth between 2003-2007 averaging about 11% per year. Growth remained strong during the recent global financial crisis, reflecting massive stimulus and strong underlying growth drivers.
China became the world’s second largest economy in 2010; increasingly,
it is playing an important and influential role in the global economy.
The discussion now tends to focus on how China can avoid “the
middle-income trap,” as experience shows that transitioning from
middle-income to high-income status can be more difficult than moving up
from low to middle income.
Yet, with a per capita gross national income of about US$4,260 (2010), China is an upper middle-income country that has complex development needs. With the second largest number of consumption-poor in the world after India, poverty reduction remains a fundamental challenge. Rapid economic ascendance has brought on many challenges as well, including demographics – issues related to an aging population as well as the internal migration of labor; high inequality; rapid urbanization; challenges to environmental sustainability; and external imbalances. Significant policy adjustments are required in order for China’s growth to be sustainable.
In its 11th Five Year Plan (2006 - 2010), the Government of China set
forth a “people centered” strategy aiming to achieve a “harmonious
society” that balances economic growth with distributional and
ecological concerns. Under this plan, considerable progress was made in
improving basic public services in social protection, education and
health, but structural issues remain under the strong momentum of
China’s traditional pattern of growth.
The 12th Five Year Plan (2011 - 2015), recently approved by the
National People’s Congress, comes at a time when the need to rebalance
toward a more domestic demand-led, service sector-oriented pattern of
growth is stronger than before, partly due to the less favorable global
outlook. The Plan has set five main objectives:
Maintaining stable and fast economic growth, with a focus on price
stabilization, more job creation, improved balance of payment, and
higher quality of growth.
Achieving major progress in economic restructuring, with higher share
of household consumption and the service sector, further urbanization,
more balanced rural-urban development, lower energy intensity and carbon
emissions, and better environment.
Increasing people's incomes, reducing poverty and improving the living standards and quality of life.
Expanding access to basic public services, increasing the educational
level of the population, developing a sound legal system, and ensuring a
stable and harmonious society.
Deepening the reforms in the fiscal, financial, pricing and other key
sectors, changing the role of the state, improving governance and
efficiency, and further integrating into the world economy.
2.Statistics
Population |
1,338,300,000 |
2010 |
GDP |
$5,926,612,009,749 |
2010 |
GDP growth |
10.4% |
2010 |
Inflation |
6.6% |
2010 |
Source: World Bank