Astrill in china september 2018 slow
In 2002, Jiang Zemin stepped down as General Secretary of the Communist Party, thereby initialing the transition to the fourth generation of leadership, led by President Hu Jintao and Premier Wen Jiabao. In addition, Jiang guided China to join the World Trade Organization in December 2001, which buttressed the country’s trade. During the same period, President Jiang and Premier Zhu Rongji reduced trade barriers ended state planning introduced competition, deregulation and new taxes reformed and bailed out the banking system and drove the military stratum out of the economy. Under his mandate, most of the state-owned companies, except large monopolies, were privatized or liquidated, thus expanding the role of the private sector in the economy at the cost of leaving millions unemployed. In early 1990s, Jiang Zemin-the third generation of Chinese leadership-became the new paramount leader of the country and his administration implemented substantial economic reforms. Moreover, China started to participate in the global economy and the country joined the International Monetary Fund (IMF) and the World Bank in 1980. The measures included, among others, breaking down the collective farms, opening up China to foreign investment, encouraging business entrepreneurship, establishing Special Economic Zones and introducing market incentives in the state-owned companies. Economic reforms under Deng’s era increased the role of market mechanisms and reduced government control over the economy. At the Third Plenum of the 11th Central Committee of the Communist Party of China, held in December 1978, Deng announced the official launch of the Four Modernizations-agriculture, defense, industry and science and technology-which marked the beginning of the reform and opening-up policies. In order to tackle these imbalances, the new administration of President Xi Jinping and Premier Li Keqiang, beginning in 2012, have unveiled economic measures aimed at promoting a more balanced economic model at the expense of the once-sacred rapid economic growth.Īfter Mao Zedong’s death in 1976, Deng Xiaoping-who was the core of the second generation of Chinese leadership-became China’s paramount leader and pushed ahead bold reforms that reshaped the country’s economy. Particularly, the stimulus program bolstered investment, while households’ consumption remained relatively low. However, the policies implemented during the crisis to foster economic growth exacerbated the country’s macroeconomic imbalances. The global downturn and the subsequent slowdown in demand did, however, severely affect the external sector and the current account surplus has continuously diminished since the financial crisis.Ĭhina exited the financial crisis in good shape, with GDP growing above 9%, low inflation and a sound fiscal position. Given the solid fiscal position of the government, the stimulus measures did not derail China’s public finances. The massive stimulus program fueled economic growth mostly through massive investment projects, which triggered concerns that the country could have been building up asset bubbles, overinvestment and excess capacity in some industries. In November 2008, the State Council unveiled a CNY 4.0 trillion (USD 585 billion) stimulus package in an attempt to shield the country from the worst effects of the financial crisis.
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Meanwhile, the primary sector’s weight in GDP has shrunk dramatically since the country opened to the world.Ĭhina weathered the global economic crisis better than most other countries. However, in recent years, China’s modernization propelled the tertiary sector and, in 2013, it became the largest category of GDP with a share of 46.1%, while the secondary sector still accounted for a sizeable 45.0% of the country’s total output. Since the introduction of the economic reforms in 1978, China has become the world’s manufacturing hub, where the secondary sector (comprising industry and construction) represented the largest share of GDP. In 1978-when China started the program of economic reforms-the country ranked ninth in nominal gross domestic product (GDP) with USD 214 billion 35 years later it jumped up to second place with a nominal GDP of USD 9.2 trillion. The Chinese economy experienced astonishing growth in the last few decades that catapulted the country to become the world's second largest economy. Inflation Rate (CPI, annual variation in %) Inflation Rate (CPI, annual variation in %, eop) Industrial Production (annual variation in %) Economic Growth (GDP, annual variation in %)