Clients’ Last Name Goes Here 12

China

1. Introduction

“China’s history is marked by thousands of years of world-changing innovations: from the compass and gunpowder to acupuncture and the printing press. No one should be surprised that China has re-emerged as an economic superpower.”¹

China is world’s most populous country with 5000 years of history. In the last 30 years it has undergone tremendous transformations and become a more open society with a huge economic growth. By the middle of 2000s China has become the world’s 2^nd largest economy by the GDP. In 2010 China became world’s largest exporter. China’s economy grew an average of 10% per a year during the years of 1992 to 2004. From 2002 to 2011, China’s GDP moved up from the sixth to the second place in the world. At such growth percentage, in about 10 years China will be equal to the USA by any type of GDP measures. This paper will be giving an overview of China’s trade history (export and import), taking a close look at what is traded and in what areas investment is directed and will talk about the changes China’s economy has undergone over time.

2. A look back on China’s economy growth

China, now home to more than 1.3 billion people and the world’s 2^nd largest economy,

has become very important as a market for, and source of, goods and services in all sectors. When you look at China’s economic growth, you notice that the changes in China started to happen around 1978. Substantial reforms were made in economic policy, which led to introducing a completely new system of farming that provided more household responsibilities. Changes made towards the liberalization of prices of products helped a lot as well. Private industries and services were able to get moving, after the privatization was allowed to happen. The country has enjoyed its fast economic development for more than 30 years straight. And as a country grew economically, its foreign trade volume also climbed up and is now taking second place in the world.

1. Rate of growth in gdp (p.A)

China’s economic growth is the fastest growing in the world, of all major nations. Its annual GDP growth rate is above 10 percent. China’ s GDP Annual Growth Rate reached its all-time high of 14.20 Percent in December of 1992 and a record low of 3.80 Percent in December of 1990.

Throughout the years of the world’s financial crisis that started in the year of 2008, China combined its expansionary monetary policy with an investment-led stimulus and has experienced more than 9% annual average growth. This year of 2012, it’s being predicted that China’s annual economy growth will reach between 7.7 per cent and 7.8 per cent.

1. Growth rate of import

China imports were worth 151.31 Billion USD in August of 2012. From 1990 until 2012, China imports averaged 43.17 Billion USD reaching an all-time high of 162.40 Billion USD in May of 2012 and a record low of 2.57 Billion USD in January of 1990.² China’s imports are mainly commodities, such as iron and steel, mineral fuels and oil, as well as equipment (optical and medical), machinery and organic chemicals. Country’s main partners are European Union, South Korea, Japan, Taiwan and ASEAN countries. Chinese trade collapsed in July of 2012 as its export and import growth slowed, indicating that the global economy continued to slow. The import weakness pushed China’s global trade surplus to $26.7 billion, double the level of the year before, adding pressure on the government to support demand as the global economy slows. Non-commodity imports have been down sharply since November of 2012, indicating underlying domestic Chinese demand, while manufacturing-related imports were generally flat, implying the slowdown of the external demand.