ECONOMY
GDP
Gross Domestic Product (GDP) represents the total market value of all finished goods and services produced within a country's borders during a specific timeframe Serving as a key indicator of economic performance, GDP acts as a comprehensive scorecard reflecting the overall health of a nation's economy.
From 2010 to 2020, China's economy experienced remarkable growth, with its GDP increasing from just over 6 trillion U.S dollars in 2010 to over 12 trillion U.S dollars by 2017 This consistent and dramatic expansion highlights China's economic resilience and significant development during this decade.
2020 at 14,723 trillion dollar which is 245% bigger than its figure in 2010.
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GDP – China In The Period 2010-2020
From 2010 to 2020, China experienced significant economic growth, marking a pivotal era in its history During this period, China's GDP surpassed that of Japan, establishing it as the world's second-largest economy after the United States While the GDP of Japan and the UK remained relatively stable, China's and the US's economies expanded rapidly Notably, even amidst the global economic downturn caused by the COVID-19 pandemic in 2019, China's GDP continued to rise, contrasting with declines in the US economy By 2020, China's GDP was three times that of Japan, accounting for 18.33% of the global economy.
Top 4 Largest Countries By GDP In The Period 2010-2020 b) The GDP’s compositions of China
Between 2010 and 2020, China's economy underwent significant restructuring influenced by technological advancements and the rise of Industry 4.0 This period marked a shift from a heavy reliance on agriculture towards greater industrialization and modernization As a result, the composition of China's GDP evolved, with agriculture's contribution decreasing by 3% and the industrial sector declining by 7.72% In contrast, the services sector experienced remarkable growth, with a 10.71% increase, becoming the largest contributor to GDP since 2012.
China’s GDP Composition (%) In The Period 2009-2019 c) Reasons
China Private Consumption Expenditure (USD) 2010 – 2020
China's remarkable GDP growth over the past decade can be attributed to several key factors The Chinese government has heavily invested in public services, particularly in transportation and military infrastructure, leading to significant development across the country The emergence of numerous successful start-ups has also played a crucial role in boosting the national economy Additionally, China's effective utilization of technology, combined with its vast labor force, has driven production scale The introduction of the Belt and Road Initiative in 2013 further enhanced China's net exports, while policies aimed at improving sectors like tourism and entertainment have also made substantial contributions to GDP growth.
China Government Spending (CYN) 2010-2020 d) GDP Growth Rate
Over the past decade, China's GDP has consistently increased; however, the growth rate has significantly declined, primarily due to the ongoing trade war with the United States This slowdown is further exacerbated by the government's green industrial policies, stricter regulations in the property sector, and blacklists affecting online platforms Additionally, the COVID-19 pandemic has played a crucial role in hindering GDP growth After experiencing growth rates exceeding 10% for 30 years, China's GDP growth plummeted to a low of 2.3% between 2010 and 2020.
2020 and ranked 16 th in the world according to Statista.
GDP Growth (%) In China 2010 – 2020 download by : skknchat@gmail.com e) GDP per capita
Between 2010 and 2020, China's GDP per capita surged by 230%, reaching $10,500 in 2020, driven by significant GDP growth However, with a population exceeding 1.4 billion, China's GDP per capita remains low and below the global average As of 2020, it ranked 53rd worldwide and 8th in Asia, highlighting the disparity between total GDP and per capita figures.
GDP Per Capita Of China 2010 – 2020
Inflation Rate
Inflation is a complex global macroeconomic phenomenon characterized by rising prices and a continuous decline in currency value In China, inflation is influenced by fluctuating food and energy prices, complicating efforts for policymakers and investors to accurately assess the underlying inflation trends.
Inflation expectations are crucial for both monetary policymakers and market participants, particularly in China and other emerging markets where food and energy significantly influence inflation trends Ignoring these factors could result in an inaccurate assessment of inflation volatility.
China Inflation Rate From 2010 To 2020
Interest rates on savings deposits in China had fallen to about inflation has risen dramatically in 2010-2011, which means bank facing a negative interest rate return.
2.25 percent in 2010 But depositors are essentially
The 2011 food crisis led to unprecedented food prices, with wheat reaching record highs globally Key factors contributing to this crisis included population growth, increasing wealth, and the diversion of grain for biofuel production.
According to government data for big cities, rice was up 38 percent, wheat prices rose
35 percent and beef and fresh milk prices each climbed about 44 percent.
In 2011, the Consumer Price Index (CPI) increased by 5.4 percent compared to the previous year, significantly exceeding the government's annual inflation target of 4 percent This marked the highest inflation rate recorded from 2010 to 2020, primarily driven by rising food prices.
In an effort to combat inflation, the government implemented several aggressive strategies, including increasing bank reserve requirements and interest rates By February 2011, the bank reserve ratio had been raised eight times to 19.5%, while bank deposit and lending interest rates were elevated three times to 3% and 6.06%, respectively.
Between 2011 and 2017, China implemented various traditional measures to reduce the Consumer Price Index (CPI) and combat inflation These strategies included stabilizing food prices, tightening the money supply, and raising both interest rates and the required reserve ratio.
In 2012, China's consumer price index (CPI) increased by 2.6 percent, a decrease from the previous year's 5.4 percent, according to the National Bureau of Statistics (NBS) This annual inflation rate fell below the government's target of 4 percent, demonstrating the effectiveness of Beijing's measures to control inflation.
Over the past six years, China's inflation rate has decreased by 4% since 2011, prompting analysts to suggest that declining Consumer Price Index (CPI) readings and mild inflationary pressures enable policymakers to prioritize growth-supportive strategies alongside necessary structural reforms Additionally, the resurgence of inflation indicates a strengthening economic expansion in China.
Since 2015, China has maintained an inflation target of approximately 2% However, in 2019, inflation rose to a peak of 3%, driven by a significant increase in consumer prices, the highest in nearly eight years This surge was largely attributed to skyrocketing pork prices, which soared by 110.2% in November 2019 due to a widespread outbreak of swine fever that began in August 2018, severely disrupting the pork supply in the country.
The COVID-19 outbreak significantly affected the consumer price index (CPI) in China, as increased demand for food and medical equipment led to speculation and soaring prices In January, China's inflation reached its highest level in over eight years, with the CPI rising by 5.4% due to heightened demand for consumer goods and a resurgence of business activity in various regions.
2020, after rising 4.5% in December 2019, in line with CEIC Data.
Other Countries And Worldwide Inflation Rates Compared To China’s
The surge in prices occurred as the coronavirus outbreak significantly limited economic activity across the nation, resulting in temporary factory closures and imposed travel restrictions.
In recent years, China has effectively managed its inflation rate, keeping it below the target ceiling Since 2011, there has been a significant and prolonged decrease in both Chinese GDP growth and inflation rates, indicating a notable trend reversal in the country's economic landscape.
2016 Furthermore, China’s fluctuation was significantly correlated with inflation rates worldwide during this era In comparison with other developed countries, such as US, UK,
China’s rate is mildly higher most of the time Still, the Chinese business cycle markedly contributed to the worldwide decline in inflation rates and thwarted the recent upward trend.
FDI
In 2020, the stock of Foreign Direct Investment (FDI) surged to $918 billion, a significant increase from $587 billion in 2010 This growth was bolstered by a swift rebound in GDP during the second quarter of 2020 and the removal of investment restrictions The service sector played a pivotal role, contributing over 70% of FDI inflows, particularly in technology-related industries To further enhance investment opportunities, the government expanded the range of industries available for FDI, lifted restrictions in key sectors, and revised the negative list for foreign investment in pilot free trade zones, resulting in an 11% increase.
In 2020, China emerged as the world's second-largest recipient of foreign direct investment (FDI), following the United States, and maintained its position as the leading FDI recipient in Asia While inflows from the US and Europe have declined, investment from ASEAN countries has risen, highlighting a shift towards regional investment Major investors in China include Singapore, the Virgin Islands, South Korea, the Cayman Islands, Japan, Germany, and the United States The primary sectors attracting these investments encompass manufacturing, real estate, leasing, computer services, wholesale and retail trade, financial intermediation, scientific research, transport, energy, and construction.
To enhance foreign investment, the country has implemented measures such as reducing import tariffs, streamlining customs clearance, and establishing an online filing system for foreign direct investment (FDI) With a skilled workforce and eager partners, it offers a low-cost production base, making it appealing to investors However, challenges like a lack of transparency, legal uncertainties, weak intellectual property protections, corruption, and protectionist policies favoring local businesses may deter investment Notably, FDI inflows into the high-tech sector have surged, now representing nearly one-third of total inflows.
Strong points for FDI in China include:
The largest internal market in the world, with 1.44 billion potential customers
Sovereign risk contained as public debt remains mainly domestic and denominated in local currency
Importance of foreign currency reserves and public debt owned by Chinese government and individuals
A well-developed production sector (manufacturing sector and heavy industry).
A favourable geographic location (close to emerging Asian markets, to Japan, maritime frontage)
Top economy in terms of purchasing power parity (PPP) thanks to rapid growth of the economy
Labour costs remain comparatively low, although the situation is changing in certain areas New opportunities with the development of the western provinces (particularly Sichuan province)
Development of a new export network (Silk Road network)
Some of the disadvantages for FDI in China include:
An ever-changing legal environment
A lack of transparency and weak intellectual property rights protection Ageing population
High level of corporate indebtedness
Production overcapacity in several sectors
A strongly degraded environmental situation in several big cities
Cultural differences in business practices that may be difficult for foreigners to learn and apply in new business situations
Underdeveloped middle management and low rate of qualified workers
Trade Balance
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China has established itself as the world's largest exporter, achieving this status in 2009, with total exports reaching $2.641 trillion in 2019 The country also ranks as the second-largest importer globally, having surpassed the United States in 2013 to become the largest trading nation Despite its stringent trade policies, China maintains a relatively open stance towards foreign trade, which accounted for 35.7% of its GDP in 2019, according to World Bank data.
In 2020, China exported goods worth approximately 2.6 trillion U.S dollars, marking a nearly four percent increase from the previous year Over the past decade, China's exports have shown consistent growth, with notable exceptions in 2009 due to the financial crisis and a decline in 2016 caused by reduced global demand As the most populous country, China has emerged as the largest manufacturing economy and exporter worldwide, with the United States and European Union being its primary export partners in 2020.
In 2019, machinery, including computers, broadcasting technology, and telephones, constituted the largest segment of Chinese exports, totaling around 1.2 trillion U.S dollars Additionally, primary goods, particularly food and live animals intended for consumption, represent key export products for China.
In 2020, China’s imports totaled around 2.06 trillion U.S dollars, reflecting a slight decline of one percent from the previous year However, from 2010 to 2020, the overall trend in China’s imports was upward, despite experiencing minor fluctuations during this period.
In 2013, China became the world's largest goods trader, surpassing the United States, with total imports and exports exceeding four trillion U.S dollars Over the past decade, imports have generally increased, with notable declines in 2009 and from 2015 to 2016 The global financial crisis in 2009 caused a significant drop in China's goods imports, which fell by approximately eleven percent, but the country later rebounded to achieve positive growth.
2010 In 2015, Chinese imports went down by 13.2 percent due to the global uncertainty following several geopolitical conflicts, disease outbreaks, and terrorism, according to the commerce minister of China.
In 2020, China's imports contributed approximately 14 percent to its gross domestic product (GDP), while the previous year saw exports surpass imports by around 421.9 billion U.S dollars, resulting in a significant merchandise trade surplus The Association of Southeast Asian Nations (ASEAN) and European Union countries emerged as China's key trade partners, with imports valued at about 2.08 billion yuan and 1.79 billion yuan, respectively, in 2020 These factors collectively explain the occurrence of China's trade surplus.
Following the financial crisis, China's export-oriented factories faced over-capacity due to a sluggish global economy The country's policies fostered a persistent trade surplus, sustaining high levels of export-related employment; however, they failed to boost domestic demand or allow for a flexible monetary policy A key indicator of this is China's strict control of the RMB, which is pegged to a basket of international currencies, predominantly the USD While this approach has ensured stability, it has not translated into improved living standards for the entire population.
Special Economic Zones (SEZs) in China, like Shenzhen, have been instrumental in driving the nation's economic growth and boosting exports by providing attractive tax incentives to foreign investors, including tax-free imports of equipment and technology.
China trade surplus had nevertheless caused several problems that hindered the economic growth:
China's substantial trade surpluses and significant accumulation of international reserves have led to considerable trade deficits for major partners, particularly the United States, raising serious policy concerns Furthermore, China's tightly regulated capital account suggests that its ongoing large surpluses indicate a notably undervalued yuan, which is expected to become increasingly flexible over time.
In 2020, escalating tensions in the U.S.-China economic relationship created significant business uncertainties, particularly as the U.S remains China's primary trade partner Notably, China's trade surplus with the U.S reached USD 295.8 billion in 2019, following a record high of USD 323.3 billion in 2018.
Similar tensions were at play with Australia although with less consequences for China.
Source: UN Comtrade - https://chinapower.csis.org/trade-partner/
However, the Chinese government has been adopting looser economic policies to mitigate mounting risks to future growth On the 15th of November 2020 China signed the
The Regional Comprehensive Economic Partnership (RCEP) is a landmark free trade agreement involving 14 Indo-Pacific nations, making it the largest trade deal in history and encompassing 30% of the global economy This agreement addresses various aspects, including goods, services, investment, and economic cooperation, while also establishing new regulations for electronic commerce, intellectual property, government procurement, competition, and support for small and medium-sized enterprises.
Country China Germany Russia Saudi Arabia
Source: https://globaledge.msu.edu/countries/china/tradestats download by : skknchat@gmail.com
Major Trading Partners
From 2010 to 2020, official Chinese trade data highlighted its seven largest trading partners, including the EU28, the United States, ASEAN, Japan, South Korea, Hong Kong, and Taiwan The United States, EU28, and ASEAN emerged as China's primary export markets, while the EU28, ASEAN, and South Korea were its main sources for imports Notably, China recorded significant trade surpluses with the United States, Hong Kong, and the EU28, but faced substantial trade imbalances with Taiwan ($112 billion) and South Korea.
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China's trade statistics show notable discrepancies when compared to those of its trading partners, primarily due to the treatment of trade via Hong Kong Official Chinese data categorize a significant portion of exports to Hong Kong as domestic exports, whereas countries like the United States attribute these imports directly to China This divergence in statistical reporting leads to inconsistencies in trade data interpretation between China and its partners.
Overall, there was a noticeable upward trend in total trade among the seven nations, despite some minor fluctuations; notably, the ASEAN bloc exhibited the fastest growth in trade volume with China.
In 2020, ASEAN surpassed the EU to become China's primary trading partner, contributing to 15% of China's total trade volume with a year-on-year increase of 6% This shift was largely due to the EU's extended lockdown measures, with expectations that the bloc would reclaim its position post-pandemic Meanwhile, China aims to strengthen its trading relationships with other countries, focusing on integrating supply chains and enhancing trade opportunities.
Urbanisation Rate
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China has experienced a significant increase in urbanization over recent decades, with the 2020 Seventh Population Census revealing that approximately 63.9% of the population resided in urban areas While urbanization has historical roots, it has been accelerated by industrialization and modernization There is a notable disparity in urbanization rates across the country, with cities like Shanghai boasting an urbanization rate of 89.3%, contrasted by Tibet's rate of just 35.7% Coastal regions in eastern China demonstrate higher urbanization levels, with more than two-thirds of their populations living in cities, while western and central regions lag behind Among the ten largest cities in China as of 2019, six are situated in the economically vibrant coastal areas of East and South China.
China's unprecedented urbanization has led to 25 of the world's 100 largest cities being located within its borders This transformation is multifaceted, as cities adopt diverse strategies to address environmental challenges, manage their development pace, and enhance global connectivity.
Brazil and Russia, two BRIC nations, exhibit significantly higher urbanization levels compared to China, while India, the world's second-most populous country, had only 34.5 percent of its population residing in urban areas as of 2019 China's urbanization is closely tied to its modernization efforts, evidenced by a decline in agriculture's contribution to the gross domestic product, which fell from 9.6 percent in 2009 to 7.1 percent in 2019, alongside a notable reduction in the agricultural workforce.
Problems potentially caused by urbanization:
The anticipated influx of people presents significant challenges in terms of job creation and infrastructure development To support this rapid urbanization, it is essential to maintain robust economic growth and enhance capital markets to secure the necessary financing.
Urban residents consume 3.6 times more energy than their rural counterparts, indicating that energy usage has not yet reached its peak Additionally, the energy intensity, measured as energy consumption per unit of GDP, is seven times higher than that of Japan and 3.5 times greater than that of the United States.
The government recognizes motor vehicles as a crucial subsector; however, it is essential to carefully consider the advantages and disadvantages of increased motorization, as it can result in urban sprawl, elevated energy consumption, and increased pollution levels.
To ensure sustainable agriculture in China, it is crucial to contain urban sprawl, as this will help preserve essential arable land amidst rising commodity prices and increasing consumption demands.
China faces significant water scarcity, with only about 2,100 cubic meters of water available per person, which is one-third of the global average This issue is particularly severe in the northern regions, where climate change is likely to exacerbate already arid conditions.
Climate change: Climate change will affect heavily populated low-lying areas There are likely to be major infrastructure requirements to protect these areas from sea-level rise and flooding.
Consequences of Economic Development
China's economic prosperity has propelled it to become a global economic superpower; however, this rapid development has led to significant environmental degradation and a decline in the quality of life for its citizens These adverse effects present substantial challenges for China as it strives to create a sustainable economy for the future.
Decades of rapid economic growth in China have led to a severe environmental crisis that threatens the health and livelihoods of its 1.4 billion citizens, while also posing significant challenges to the global battle against climate change.
Since 2010, China's GDP has experienced an average annual growth of 10%, leading to a substantial rise in greenhouse gas emissions Over the past decade, China has become the world's largest emitter of greenhouse gases, including carbon dioxide, methane, and nitrous oxide.
Coal is a major contributor to China's energy consumption, accounting for about two-thirds of the total As the world's leading coal producer, China generates over half of global coal usage Although a ban on new coal-fired power plants was implemented in 2016, the lifting of this prohibition in 2018 led to a resurgence in construction In fact, reports from Global Energy Monitor and the Center for Research on Energy and Clean Air indicate that in 2020, China constructed approximately three times more new coal-power capacity than the rest of the world combined.
Note: EU data does not include the UK
China's rapid urbanization significantly increases energy demands, particularly for new manufacturing and industrial hubs constructed with energy-intensive materials such as cement and steel Additionally, the surge in automobile ownership, which rose from approximately 27 million in 2004 to 240 million in 2018, further exacerbates these energy needs.
China stands as the world's largest financier of fossil fuel infrastructure, significantly through its Belt and Road Initiative (BRI), which includes plans for hundreds of coal-fired power plants globally Over 60% of the energy financing associated with the BRI is directed towards nonrenewable resources, leading to a dramatic increase in greenhouse gas emissions in numerous BRI countries Research in 2019 indicated that the BRI could potentially raise global average temperatures by 2.7°C, far surpassing the Paris Agreement's target of limiting temperature rise to 1.5°C.
China, like the rest of the globe, will face escalating challenges from climate change in the coming decades, experiencing impacts such as rising sea levels, intensified storms, and more severe heat waves.
According to a 2020 report from China's National Climate Center, the country's average temperature and sea levels are increasing at a rate surpassing the global average Coastal cities like Shanghai face the risk of submersion if global temperatures continue to rise It is estimated that by the end of the century, around 43 million people in China could be living on land that may be underwater if the global temperature increases by 2°C.
Experts predict that China will experience an increase in extreme weather events, including heavy rainfall, leading to natural disasters that claim hundreds of lives annually and devastate millions of acres of farmland As temperatures continue to rise, the rapid melting of China's glaciers will contribute to more frequent and severe flooding, while droughts and extreme heat events are expected to become increasingly common.
China is facing significant desertification, with over a quarter of its fertile land turning into desert due to water issues, poor farming practices, overgrazing, and climate change In response, the government has initiated extensive reforestation efforts, planting billions of trees and implementing vegetation-related measures As a result, government statistics indicate that the area affected by desertification is decreasing by more than a thousand square miles annually.
Air pollution download by : skknchat@gmail.com
A recent study by physicists at the University of California, Berkeley, reveals that approximately 1.6 million people in China die annually due to heart, lung, and stroke issues linked to severe air pollution, particularly from small haze particles This alarming statistic translates to around 4,000 daily fatalities, representing one in six premature deaths in the world's most populous nation.
In response to the severe air pollution crisis in 2013, which citizens referred to as an “airpocalypse,” the Beijing government took immediate action to raise awareness about air quality issues A comprehensive plan was introduced, mandating cities to reduce hazardous PM2.5 particle levels and urging local authorities to enforce stricter pollution and coal usage regulations This initiative has led to a notable decrease in air pollution across much of China; however, numerous regions, particularly in the north, still face prolonged periods of extreme pollution and elevated PM2.5 levels.
China, home to 20% of the global population, faces a significant freshwater crisis, with only 7% of its citizens having access to clean water Overexploitation and industrial pollution have severely degraded major water sources, while hydropower dam constructions have harmed local ecosystems In response, the Chinese government implemented a strategy in 2015 to combat water pollution, resulting in improved quality of surface waterways like lakes and rivers However, groundwater remains a critical issue, with over 80% classified as "poor to extremely bad."
In 2014, the Chinese government estimated that nearly 20% of arable land is contaminated, posing significant risks to the nation's food security, with approximately 12 million tons of the 664 million tons of annual grain production affected by heavy metals The primary culprits include chemical factories, industrial sites, and the improper disposal of trash and electronic waste, alongside rare-earth-metal mining and excessive pesticide use To combat this issue, China implemented its first comprehensive soil pollution law in 2019, requiring polluters to either reduce their production or bear the costs of contamination Additionally, in a move to further protect the environment, China banned the import of all foreign waste in 2021.
Air, water, and soil pollution significantly impact the health and livelihoods of China's vast population, contributing to approximately 1.1 million premature deaths annually due to air pollution alone Since the 1980s, studies have linked poor air quality in northern cities to serious health issues, including respiratory, cardiovascular, and cerebrovascular diseases Additionally, over 60,000 deaths each year are attributed to water pollution-related illnesses The economic repercussions of these environmental challenges are staggering, with estimates suggesting they cost the economy up to 10 percent of GDP, translating to around 1.5 trillion RMB ($227 billion) or approximately 3.5 percent of GDP in 2010.
Living Standards
HDI
Source: https://countryeconomy.com/hdi/china
Over the past decade, China's Human Development Index has steadily increased, largely due to the introduction of numerous reforms and comprehensive policies designed to enhance HDI, which significantly indicates the nation's social and economic progress.
In 2020, China's Human Development Index (HDI) was slightly above the global average of 0.737, yet significantly lower than Norway's leading HDI of 0.957 Since 2012, China has transitioned from rapid economic growth to a phase of medium-high speed economic and social development, prioritizing human development The 18th Party Congress in 2012 called for accelerated transformation in China's economic development, emphasizing reliance on scientific and technological advancements and enhancing the workforce's qualifications Additionally, there was a strong focus on strengthening the social sector by providing quality education, improving public health, and fostering the construction of a harmonious society.
“New Normal'' of economic and social development, the Chinese government further put forward in
In 2015, a vision for development emerged, emphasizing "innovative, coordinated, green, open, and shared" principles This vision prioritizes human development and advocates for supply-side structural reforms to foster sustainable economic growth It calls for comprehensive reforms across essential sectors, including economic, ecological, cultural, and social domains.
The "Healthy China 2030" Plan Outline, launched during the first National Health and Well-being Conference in 2016, emphasizes the significant focus on health issues in China Between 2012 and 2020, China's Human Development Index (HDI) rose from 0.716 to 0.761, although the pace of growth has begun to slow due to the challenges of achieving further improvements in life expectancy, income, and education at already high levels This trend highlights China's strategic shift towards more balanced and coordinated development.
Since peaking in 2009, the income disparity between urban and rural residents in China has been decreasing, with the per capita income ratio dropping from 3.33:1 in 2010 to 2.71:1 in 2017 The implementation of targeted poverty reduction strategies in 2013 marked a new phase in the country's efforts to alleviate poverty.
Education has advanced significantly, with a consistent rise in the education index and notable improvements in facilities and equipment By 2020, more than 96% of primary and secondary schools across the country were connected to the Internet, and 80% of these schools featured multimedia classrooms.
China's Eastern Region boasts the highest Human Development Index (HDI) in the country, home to major cities like Beijing, Shanghai, and Hangzhou However, the government is also prioritizing the development of other regions The Central Region is being promoted as a hub for manufacturing, modern agriculture, and ecological civilization Meanwhile, the Western Development Strategy aims to enhance public services in the western region, improving access to education, healthcare, and social security while increasing reimbursement rates These initiatives, along with a focus on rural development and poverty alleviation, have contributed to a gradual narrowing of the human development gap across China's four regions.
China has made significant strides in enhancing its social and economic development over the years Despite its Human Development Index (HDI) ranking at a relatively low 85, there is optimism that China will continue to address social issues and promote economic growth in the near future.
Education
Education is essential for a nation's future, serving as the foundation for social progress and national rejuvenation It plays a crucial role in improving citizens' quality of life and fostering their overall development, embodying the aspirations of countless families for a better existence To achieve prosperity, prioritizing educational development and modernization is vital This focus is key to realizing the vision of a moderately prosperous society and transforming China into a prosperous, strong, democratic, culturally advanced, and harmonious modern socialist nation.
China's educational system is renowned for its rigor and competitiveness, as highlighted by the OECD's report showing that Chinese students excelled in the Program for International Student Assessment (PISA) test, which evaluates the reading, math, and science skills of 15-year-olds across 65 countries This success has prompted many Western governments to explore ways to emulate the disciplines of the Chinese education model To determine whether this approach truly merits its esteemed reputation, it is essential to examine the intricacies of China's educational framework.
A report from a Chinese online education institution reveals that students in China's primary and secondary schools dedicate an average of three hours daily to homework, which is double the global average.
A recent report by Afanti reveals that Chinese teenagers spend an average of 10,080 hours on homework before turning 18, which is equivalent to attending 4,032 concerts or 7,000 soccer matches This study analyzed the learning behaviors of 20 million users and included an in-depth survey of 1,000 participants.
Students facing heavy academic demands are encouraged to participate in tutoring sessions for key subjects such as Math, Literature, English, Chemistry, and Physics Due to time constraints in a standard school day, teachers are unable to thoroughly cover all the material from textbooks provided by China's Ministry of Education In addition to math and science, students also engage in studies of Chinese, English, history, literature, music, art, and physical education.
Most students wake up at approximately 6 a.m and typically go to bed between 10 and 11 p.m Their daily routine is largely consumed by classroom learning and completing homework, which significantly limits their opportunities for social interaction and extracurricular activities.
Students are often motivated to excel in their studies by the desire to honor their country, support their families, and make their parents proud While high-achieving students receive recognition and rewards in school, those who struggle often feel neglected, leading to significant stress and pressure This dynamic creates a heavy burden for students who may not meet academic expectations.
Students often prioritize test performance over genuine learning, leading to a focus on memorization rather than understanding This approach results in a temporary retention of information, as many students forget what they studied shortly after their exams due to a lack of meaningful engagement with the material.
Chinese students often struggle with a lack of clear goals in their education Beyond competing for grades, many children fail to understand the purpose of their studies, leading to a sense of disinterest in their learning.
Creativity and critical thinking are often overlooked in education, primarily due to large class sizes and the extensive material students must memorize As a result, teachers frequently lack the time and energy needed to nurture their students' creative abilities.
Hence, students tend to copy other’s ideas because they struggle to come up with their own This passive education style results in an imperfect education system.
China's education system is still imperfect, with schools lacking vitality and an uneven distribution of educational resources across regions Impoverished and ethnic autonomous areas lag in educational development, highlighting disparities between urban and rural settings Funding for education fails to meet growing demands, and the sector has not been prioritized strategically The public is calling for quality education and a collective desire for deeper education reform is evident.
Recent emphasis from the Party and the State on education has led to significant reform initiatives Education funding is increasing substantially, resulting in improved school conditions As a result, the depth of education reform is advancing steadily, with ongoing enhancements in school operational proficiency.
Free compulsory education is now standard in both urban and rural regions, with vocational education rapidly advancing Additionally, higher education has entered a new phase of widespread accessibility, supported by the strengthening of rural education.
Significant strides have been made towards achieving educational equity in China, which has greatly improved the overall quality of education This development has fostered innovation in science, technology, and culture, playing a crucial role in driving the country's economic growth, social advancement, and enhancing the quality of life for its citizens.
As of 2019, global literacy rates stood at approximately 86.5% for individuals aged 15 and older, with stark contrasts between regions; industrialized nations boasted significantly higher rates compared to Sub-Saharan Africa, where only about 65% of the population was literate UNESCO emphasizes that literacy is a fundamental human right, particularly in our rapidly evolving, technology-driven world Notably, China has made remarkable progress, increasing its literacy rate from 79% in 1982 to 97% in 2010, translating to roughly one million new literates annually over three decades In contrast, India, the world's second most populous country, reported a literacy rate of only 74% in 2018.
Note: Data from 2018 onward has yet to be updated
Life expectancy
Life expectancy in China has steadily increased over the years, reflecting the country's remarkable economic growth, with the average reaching approximately 76.9 years in 2019 However, the onset of COVID-19 marked a significant decline in life expectancy, the most substantial drop since World War II.
Despite a steady increase in average life expectancy at birth, China continues to fall behind developed nations in health outcomes As of 2020, the average life expectancy in China reflects this ongoing disparity.
In 2020, China's birth rate hit a record low, highlighting the significant demographic challenges the government faces, including a declining labor force and an increasing aging population In contrast, the United States' birth rate remains two years higher than that of China, emphasizing the differing trends in population growth between the two countries.
Last year, the birth rate fell to 8.5 births per 1,000 people, marking the lowest level since 1978, according to the National Bureau of Statistics' latest yearbook While improvements in living standards and life expectancy have been notable, they have also introduced new challenges for society.
176 million people aged 65 years and older, making up 12.6 percent of the population By
By 2045, it is projected that 26 percent of China's population will be elderly, similar to the current demographic in Japan Traditionally, family members have taken on the responsibility of elder care; however, the combination of a rapidly aging population and declining birth rates has made this approach increasingly unfeasible Unfortunately, China has been slow to develop public alternatives to support its aging citizens.
China Life Expectancy During The Period 2010-2019
Source: The World Bank download by : skknchat@gmail.com
Level And Share Of Out-Of-Pocket Expenses In Total Health Expenditures, 2003-2017
Level and share of out-of-pocket expenses in total health expenditures, 2003-
Between 2010 and 2020, China's healthcare services experienced substantial advancements, positioning the country as a significant player in global medicine and life sciences Notably, Chinese pharmaceutical companies developed innovative drugs, including Zanubrutinib, which is designed to treat adult patients with mantle cell lymphoma, a rare cancer with limited treatment options.
GV-971 marks a significant advancement as the first innovative therapy for Alzheimer's disease in 17 years Despite being the initial epicenter of the COVID-19 outbreak, China's effective healthcare systems and stringent policies helped maintain a death rate that was slightly lower than anticipated outside of Wuhan As a result, China has swiftly recovered from the pandemic, enhanced its global output share, and reduced the economic gap with the United States.
China, despite its advancements in healthcare and modern medical facilities, faces critical public health challenges, including respiratory diseases linked to severe air pollution, a high prevalence of smoking among hundreds of millions, and rising obesity rates among urban youth The nation's vast population and densely populated cities have contributed to significant disease outbreaks, notably the Covid-19 pandemic in 2019, which has since been largely controlled.
Cardiovascular disease (CVD), tumors, and respiratory diseases are the three leading causes of death in China in both the rural and urban populations, jointly accounting for
Since 2009, China has been reforming its primary healthcare system, focusing on five key areas to improve overall health outcomes The country has expanded its three main social health insurance schemes, now covering over 95% of the population This expansion has significantly reduced out-of-pocket health expenses, which often indicate low financial protection, bringing them down to 29% of total health expenditure.
2017 and is projected to reach 25% by 2030.
China is striving to alleviate pressure on its public health system by lowering drug prices and boosting hospital investments The nation has achieved near-universal social insurance coverage, enhancing access to health services and decreasing out-of-pocket expenses However, catastrophic health costs remain burdensome for low-income individuals, highlighting the need for targeted financial protection within the existing insurance framework This approach necessitates a cohesive policy that integrates basic health insurance, catastrophic medical coverage, and medical aid, while also improving healthcare efficiency Protecting vulnerable populations from healthcare costs is crucial for effective poverty alleviation in China, aiming to disrupt the cycle of illness-induced poverty.
From 2010 to 2020, China significantly improved life expectancy and quality of life, with projections indicating it may surpass the United States in life expectancy by 2027, according to Reuters calculations.
Welfare
Social welfare expenditures constitute a significant portion of government budgets in developed nations The Chinese government faces the daunting challenge of delivering adequate medical and welfare services to meet the essential needs of its vast population across a large territory In comparison to economically advanced countries, China has a relatively underdeveloped social welfare system.
Healthcare and pensions are among the most expensive categories in many countries, driven by the ageing population that leads to a higher proportion of retirees, increased use of advanced medical procedures, and longer life expectancies This trend is expected to persist based on demographic forecasts Additionally, unemployment insurance (UI) plays a crucial role in the social safety net alongside pension and health insurance.
The UI scheme is for urban workers It has grown with China’s economic process and urbanisation, with enrolment more than twofold from 100 million at the turn of the century.
As of December 2019, there were 205 million enrollees in the unemployment insurance (UI) scheme, representing 45% of the urban workforce This low coverage rate can be attributed to the significant informal sector, which includes self-employed individuals and employees in micro enterprises classified as sole proprietorships, making up about one quarter of the urban workforce Additionally, nearly 30% of the workforce remains unenrolled in the UI scheme, a figure that aligns closely with the one-third share of employment in "private enterprises" as defined by Chinese classifications.
China's ambitious global projects highlight the opportunity cost faced by its most vulnerable populations, as the growing tax revenues collected by the central government are not translated into a robust social safety net Instead, these fiscal revenues are primarily allocated towards advanced technologies, military modernization, and international infrastructure projects Consequently, the working class in China is likely to endure significant hardships due to an inadequately funded unemployment insurance system, compounded by the lack of meaningful reforms.
Since 2007, China has implemented one of the largest means-tested basic income programs globally, called dibao, which stands for "minimum livelihood guarantee." This program provides unconditional cash transfers to individuals whose incomes fall below the local poverty line, helping them achieve the dibao standard.
In 2013, China established the world's largest pension system, introducing the concept of saving for retirement to its citizens This system comprises three distinct nationwide pension plans that are accessible to all individuals, regardless of their employment status.
Civil and public service employees, with around 40 million participants, wholly financed by the government Pensions were based on final salary.
Urban workers: obligatory and including China’s some 200 million migrant workers Urban workers (hukou) were also insured for working injury, diseases, widowhood and were entitled to housing and children's education.
Launched in 2008/09, the Rural program aimed for full coverage by 2020 and operated on a voluntary basis It provided support for households and social outlook relief, ensuring that all residents aged 60 and above were eligible for assistance, regardless of their contribution history, although the payments received were minimal.
Over 95% of Chinese citizens benefit from a comprehensive medical insurance program that covers medical expenses aligned with the official drug catalogue, approved diagnosis and treatment procedures, and recognized medical care facility standards This program also includes coverage for emergency treatment and rescue services, ensuring widespread access to essential healthcare services across the nation.
Public Expenditure On Social Security And Employment
In China In The Period 2011-2020
By the end of 2020, the total number of individuals enrolled in pension insurance reached 999 million, while those covered by unemployment insurance stood at 217 million, and work-related injury insurance included 268 million participants.
The basic pension insurance system encompasses one-third of the global population covered by pension insurance, making it the largest pension system worldwide The Covid-19 crisis has prompted significant state intervention in livelihood, welfare, and wellbeing, addressing the challenges faced by millions affected by its adverse impacts.
Improving social security and ensuring access to healthcare, affordable education, and stable housing are crucial for lifting people out of poverty While high-tech innovations like silicon chips are often prioritized, these foundational elements significantly contribute to a nation's economic longevity, scientific advancement, and resilience against external challenges.
Labor
China's labor force, defined as the total number of employable individuals including both the employed and unemployed, has shown slight fluctuations over the past decade After a gradual increase from 2010 to 2015, it has been on a decline, with approximately 783.9 million people in 2020, making it the largest labor force globally, nearly double that of India This decreasing trend can be attributed to the long-standing one-child policy, which was in place for nearly 40 years and aimed at improving living standards and resource distribution However, the policy has had adverse effects on the labor market and pension system, contributing to an aging population As the number of elderly rises and the youth population declines, China faces significant challenges in the 21st century.
Labor Force In China In The Period 2010-2020 download by : skknchat@gmail.com
China's economic restructuring has significantly altered its labor force composition Prior to 2011, agriculture was the primary source of employment; however, this shifted as the service sector emerged as the largest labor provider By 2020, only 23.6 percent of the workforce was engaged in agriculture, while the industrial sector accounted for 28.7 percent, and services dominated with 47.7 percent of employment From 2010 to 2020, there was a marked decline in agricultural jobs, contrasting with the growth in the services sector.
China Employment By Sector 2010 - 2020 b) Unemployment Rate
Unemployment refers to individuals who are employable and actively seeking work but unable to secure a job As the most populous country in the world, China faces significant challenges despite its rapid economic development in recent years Consequently, many residents still experience unemployment, contributing to a persistently high unemployment rate in the country.
Over the past decade, despite various government policies aimed at reducing unemployment, the national unemployment rate peaked at 5% in 2020, marking its highest level in history Analyzing this trend reveals two distinct phases: from 2010 to 2018, China's government policies effectively lowered the unemployment rate However, the subsequent two years saw a sharp increase in unemployment, largely attributed to the COVID-19 pandemic, which forced many businesses to close and left numerous workers without jobs.
In 2020, China had an unemployment rate that ranked 46th globally, showing relative stability compared to the fluctuations seen in the USA, UK, and Japan Despite having the largest population among the top four economies, China's unemployment rate was significantly lower than that of the USA, yet higher when compared to Japan and the UK.
UNEMPLOYMENT RATE IN TOP 4 ECONOMIES
The youth unemployment rate significantly impacts China's overall unemployment and economic development, as teenagers and young adults constitute a substantial portion of the population Historically, low-skilled young workers could easily secure jobs; however, economic stagnation has led to increased challenges in finding and retaining employment Many of these positions offer low pay and minimal social security, resulting in social hardships that hinder societal progress Additionally, graduates often struggle to compete with those from top universities and are reluctant to accept low-quality jobs, leading to the emergence of "neet groups" who prefer to rely on their parents rather than work This behavior is often encouraged by parents who, having worked low-skilled jobs to finance their children's education, cannot accept their offspring settling for the same Consequently, this dynamic contributes to wasted job opportunities and exacerbates youth unemployment issues in China Moreover, the current labor market faces structural unemployment among the youth, stemming from a mismatch between job requirements and available skills.
10 years, although the Youth unemployment rate of China had fallen slightly from 2016 to
2018, but mostly due to the pandemic, it has come back to an increasing trend since 2018.
To conclude, China has achieved remarkable gains in economic development over the last
Over the past decade, the workforce has been pivotal to economic growth, while China's workforce faces a notable decline due to the one-child policy and ongoing economic development To address potential economic challenges, it is crucial for the government to introduce timely and effective policies.
Income and cost of living
Source: National Bureau of Statistics of China
Real GDP Per Capita In The World In 2014
Over the past decade, the standard of living in China has significantly enhanced, accompanied by a rise in citizens' income A key measure of this improvement is the real GDP per capita, which reflects the average production of goods and services per person at constant prices From 2010 to 2020, China's GDP per capita has shown consistent growth, highlighting the economic advancement of the nation.
The global average real GDP per capita stands at $20,055.65, with a median value of $12,981.40 In comparison, China's average real GDP per capita is $12,472.51, aligning closely with the global median yet falling short of the global average This highlights the disparities in income levels across different regions in China.
In 2015, the real per capita household disposable income across provinces in China offers valuable insights into income distribution Disposable income, defined as total income after taxes, is analyzed using the provincial consumer price index (CPI) to determine real disposable income levels in various regions of the country.
In China, the average household income stands at 21,586.95 yuan, significantly surpassing the median income of 18,371.34 yuan, suggesting a less pronounced income gap compared to other regions.
The graph highlights significant wealth disparity across different provinces in China, particularly in Beijing and Shanghai, where the real per capita household disposable income exceeds 48,000 yuan—approximately four times that of the poorest regions While this data illustrates regional wealth inequality, it does not fully address the internal disparities within each province.
Source: National Bureau of Statistics of China
China’s Household Disposable Income In 2015 c)Cost of Living
Income is a crucial factor in assessing living standards, but the cost of living plays an equally important role With a fixed income, higher living expenses result in a lower standard of living Since housing constitutes a substantial part of an individual's income, the costs associated with housing can greatly diminish overall living standards.
To create a provincial home price index, we employed a housing price index of over
We analyzed the cost of living across 100 Chinese cities by using the average city price index for each province, adjusting it according to the Consumer Price Index (CPI) of each province The resulting provincial house price index is illustrated in the graph below.
The median price per square meter for housing in China is approximately 7,000 yuan, with most provinces showing minimal variation from this figure However, housing prices in major cities like Beijing and Shanghai are significantly higher, reaching about five times the median and nearly eight times the prices in the least expensive regions Consequently, the cost of living across China exhibits considerable disparity.
To develop an income index that accounts for the cost of living, we calculated the per capita household disposable income and multiplied it by the provincial housing price index This approach allows for a more accurate representation of income relative to living expenses.