Xina flag Xina: Visió econòmica i política

El context econòmic de Xina

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

China is the second largest global economy, the largest exporter and has the largest exchange reserves in the world. However, even though China has one of the fastest growing GDPs in the world, its economic growth was abruptly slowed to 2.3% in 2020, against 6% in 2019, due to the impact of the COVID-19 pandemic. The 2019 context was already the result of a structural slowdown, as the economy moves away from an investment-led growth model and the government implements policies to reduce financial vulnerabilities. At the time, resilient external demand and robust domestic household consumption bolstered this growth, despite rising concerns about financial risks amid an economic restructuring led by the government. In 2021, growth came back strongly at 8%. New sectors like e-commerce and online financial services are gaining momentum in an economy dominated by export-oriented sectors. According to the IMF's October 2021 forecast, the GDP trend is expected to stabilise at 5.6% in 2022 and 5.3% in 2023.

By the end of 2021, inflation reached 1.1% and it should stabilise at 1.8% and 1.9% in 2022 and 2023 (IMF, October 2021). Public debt is a reason for concern in China. Although the official figure for 2021 was 68.9%, the real number is thought to be much higher and is expected to rise in coming years. According to a report published by the Institute of International Finance, the total stock of corporate, household and government debt in the nation now exceeds 303% of gross domestic product and accounts for about 15% of all global debt. Lately, the government has been targeting spending cuts in its budget and President Xi Jinping has said that curbing loans to bloated state-owned enterprises is “the priority of priorities". Nonetheless, the IMF anticipates an increase in the government debt in the future, reaching 72.1% in 2022 and 74.5% in 2023. Due to the COVID-19 pandemic, government budget balance reached a record low of -9.5% of GDP in 2020 compared to -5.9% the previous year, but then came back to 6.9% in 202, a trend that is expected to remain in 2022 and 2023, when it's estimated to remain at -6.5% and -6%, respectively. On the other hand, China still has large reserves of foreign currencies, estimated by the Chinese Official reserve assets at USD 3.2 trillion in January 2022, which could serve as a buffer to external sovereign volatility, together with a current account surplus of an estimated USD 275.7 billion in 2022 (IMF, October 2021). Consumption is still to recover from the hit caused by the COVID-19 outbreak. Even though sales of luxury goods are booming and box office revenues have reached new highs, the lack of a recovery in employment and falling household incomes mean that prospects for a full consumption recovery are not bright (OECD, 2021).

In 2022, the country’s most immediate challenge remains related to the economic, social and public health impacts of the COVID-19 pandemic. Furthermore, China has to face many challenges: an ageing population and shrinking workforce, the lack of openness of its political system and issues of competitiveness in an economy dependent on high capital spending and the expansion of credit. A large gap remains between the living standard of the cities and the countryside, between urban zones on the Chinese coast and the interior and western parts of the country, as well as between the urban middle classes and those who have not been able to profit from the growth of recent decades. These inequalities are becoming increasingly worrisome for both Chinese authorities and investors, hence Xi Jinping's vow to complete the eradication of rural poverty by 2020 followed by his speech the following year, stating that the "arduous task of eradicating extreme poverty has been fulfilled" (BBC News, February 2021), even though the national benchmark used by the Chinese government is slightly higher than the USD 1.90 a day poverty line used by the World Bank to look at poverty globally.

According to the Minister of Human Resources and Social Security Yin Weimin, the low unemployment rate of these past years is largely due to the new digital economy and entrepreneurship. Many analysts say, however, that the government figure is an unreliable indicator of national employment levels, as it takes into account only employment in urban areas and does not measure the millions of migrant workers that arrive in the country every year. Despite the global context, the unemployment rate slightly decreased from 4.2% in 2020 to 3.8% in 2021. The IMF expects the rate to return to pre-pandemic levels of 3.7% in 2022 and 3.6% in 2023.

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 14,340.6014,866.7416,862.9818,463.1319,993.50
GDP (Constant Prices, Annual % Change) 6.02.38.14.85.2
GDP per Capita (USD) 10,17010,511e11,89112,99014,040
General Government Balance (in % of GDP) -5.9-9.5e-6.9-6.5-6.0
General Government Gross Debt (in % of GDP) 57.166.368.972.174.5
Inflation Rate (%) 2.92.40.92.11.8
Unemployment Rate (% of the Labour Force) 3.6e4.23.83.73.6
Current Account (billions USD) 102.91273.98277.15275.68284.39
Current Account (in % of GDP) 0.71.81.61.51.4

Source: IMF – World Economic Outlook Database, October 2021

Note: (e) Estimated Data

Main Sectors of Industry

China has a highly diversified economy, dominated by the manufacturing and agricultural sectors. China is the most populated country in the world and one of the largest producers and consumers of agricultural products. The agricultural sector is estimated to have employed 24.7% of the active population in 2021 (World Bank, 2022) and accounted for 7.7% of GDP, although only 15% of the Chinese soil (about 1.2 M km²) is arable. China is the leading global producer of cereals, rice, cotton, potatoes and tea. In terms of livestock, it also dominates sheep and pork livestock farming as well as the world’s fish production. A series of plans have been aimed at transforming, modernising and diversifying agriculture to increase productivity. Additionally, the country is rich in natural resources, and has significant coal reserves (the country's primary energy source), which account for two-thirds of the total primary energy consumption. China is the world leader in the production of certain ores (tin, iron, gold, phosphates, zinc and titanium) and has significant petrol and natural gas reserves, making the country the seventh biggest oil producer in the world, with 3.38 million barrels produced per day in 2021.

The industry sector contributed to approximately 37.8% of China's GDP and employed 27% of the population in 2021 (World Bank, 2022). China has become one of the most preferred destinations for the outsourcing of global manufacturing units thanks to its cheap labour market, despite an increase in labour costs in recent years. China’s economic development has coincided primarily with the development of a competitive and outward-oriented manufacturing sector. More than half of the Chinese exports are made by companies with foreign capital. Their share in the sector's added-value varies according to the industry: more than 60% for electronics and less than 20% for the majority of producer goods. The state sector still contributes approximately 39% to the GDP.

The services sector's share in the GDP is approximately 54.5% and it employed around 47% of the workforce in 2021 (World Bank, 2022). Even though the sector's GDP share has been growing in recent years, the service sector as a whole, encumbered by public monopolies and restrictive regulations, has not progressed. The development of the sector has been constrained by the country’s focus on manufactured exports and the substantial barriers to investment in the sector. However, the Chinese government has been focusing more on the services sectors lately, particularly in sub-sectors such as finance, logistics, education, healthcare and it is also aiming to rank among the top exporters for transport, tourism and construction.

The COVID-19 pandemic has had a powerful impact on the global economy since 2020. Nevertheless, the global recovery continues, even if the momentum has weakened towards the end of 2021 and uncertainty has increased as the pandemic resurged, leaving lasting imprints on medium-term performance. The surge in global inflation has investors fretting about future growth, but many economists say price surges will subside, making way for 4.7% global GDP growth in 2022 (International Monetary Fund - IMF, 2022 & Morgan Stanley, 2021). The impact of the pandemic appears to have affected both sides of most sectors and markets in China for the second year in a row - demand disruptions having run up against supply problems - making the short-term outlook uncertain for agriculture, industry and service sectors.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 25.3 27.4 47.3
Value Added (in % of GDP) 7.7 37.8 54.5
Value Added (Annual % Change) 3.0 2.6 2.1

Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.

 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}

Score:
58,4/100
World Rank:
107
Regional Rank:
20

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
5.99/10
World Rank:
55/82

Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024

 

Country Risk

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Actualitzacions: October 2022

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