China's economy facts and figures

China's economy produced $21.27 trillion in 2016. It's the world's largest economy. The European Union is second, at $19.1 trillion. The United States fell to third place, producing $18.5 trillion.

China has 1.37 billion people, more than any other country in the world. China is still a relatively poor country in terms of its standard of living. Its economy only produces $15,400 per person, compared to the U.S. GDP per capita of $57,300.

The low standard of living allows companies in China to pay their workers less than American workers. That makes products cheaper, which lures overseas manufacturers to outsource jobs to China.

Components of China's Economy

China built its economic growth on low-cost exports of machinery and equipment. Massive government spending went into state-owned companies to fuel those exports. These companies dominate their industries. They include the big three energy companies: PetroChina, Sinopec and China National Offshore Oil Corporation. These state-owned companies are less profitable than private firms. They return only 4.9 percent on assets compared to 13.2 percent for private companies.

China developed cities around these factories to attract workers. As a result, one-fourth of China's economy is in real estate. The government also funded construction of railways and other infrastructure to support growth.

As a result, it imported massive amounts of commodities, like aluminum and copper. 

By 2013, the 10 percent annual growth threatened to become a bubble. That's when China looked toward economic reform.

China's Exports

China was the world's largest exporter from 2013 to 2015. It exported $2 trillion of its production in 2016.

The EU took the No. 1 spot, exporting $2.26 trillion. The United States came in third at just $1.47 trillion. 

China shipped 18 percent of its exports to the United States in 2015. That contributed to a $365 billion trade deficit. China's trade with Hong Kong was almost as much (14.6 percent). Its trade with Japan (6 percent) and South Korea (4.5 percent) was much less.

China encouraged trade with African nations, investing in their infrastructure in return for oil. It increased trade agreements with Southeast Asian nations and many Latin American countries. That's why President Obama launched the Trans-Pacific Partnership trade agreement. It doesn't include China. That’s because one of its goals was to balance China's growing economic power in the region. That agreement was thrown into jeopardy once President Trump withdrew from it January 2017.

China does a lot of manufacturing for foreign businesses, including U.S. companies. They ship raw materials to China. Factory workers build the final products and ship them back to the United States. In this way, a lot of China's so-called "exports" are technically American products.

China primarily exports electrical equipment and other types of machinery.

This includes computers and data processing equipment as well as optical and medical equipment. It also exports apparel, fabric and textiles. It's the world's largest exporter of steel.