China Goverment

o

Economical System Resources Investments

Communism  communism with a small “c.” The system of

thought called communism is an ideology summarized in the neat-sounding maxim, “From each according to his ability, to each according to his need.” Communism with a capital “C” would be the

tusk- perceived as a sharp and dangerous spear by its fearful examiner.

• Communism, which is also described as

"Revolutionary Proletarian Socialism" or "Marxism," is both a political and economic philosophy. • Two primary writings:

(1) The Communist Manifesto, which was first published in 1848 by Karl Marx, and (2) Principles of Communism, by Friedrich Engels.

According to The Communist Manifesto, Communism has ten essential planks: • Abolition of Private Property. • Heavy Progressive Income Tax. • Abolition of Rights of Inheritance. • Confiscation of Property Rights. • Central Bank. • Government Ownership of Communication and Transportation. • Government Ownership of Factories and Agriculture. • Government Control of Labor. • Corporate Farms and Regional Planning. • Government Control of Education. Fundamentally, The Communist Manifesto was a rebellion against the extreme poverty of the lower class.

Communism Foundation in Czarism Communism, though distinctive, is thought by

some to have been heavily influenced by Czarism, a Totalitarian regime replaced by Communism after Russia's 1917 Revolution.

Russians under Czarist rule had no such

protection from the wiles of an unjust Czar. And so it is for Communists. Under Communism, the government is absolute. Under Stalin, perhaps the most notorious Communist, around 40 million Russian citizens were murdered for "the good of the state."

The

One-Child

Policy

• China faces many complications of overpopulation. • In the 1970’s “the Chinese government introduced a national

family planning programmed that promoted a policy of later birth, longer spacing, and fewer births” . •

The lowest age for marriage was set at 25 for males and 23 for females; a two-child norm was promoted and a birth interval of at least four years was highly recommended”

• The fertility went from 5.7 children for every woman in 1970 to 2.5

children in 1980. The One-Child Policy has pushed fertility down to approximately 2 children or replacement level. The population growth rate has steadily decreased from 2.7% in 1970 to 1.333% in 1979, and to 0.914% in 1999

The

One-Child

Policy

Agriculture • China is the world's most populous country and one of the

largest producers and consumers of agricultural products.

• China is an agricultural country with a large population and

a small per capita area of cultivated land. This results in a contradiction between the demand and supply of agricultural product.

• The cultivated area per capita is only 0.08 ha, about one

third of the average of the world. In the recent half century, irrigation has been developed quickly in China. The irrigated area in China in 1949 was only 16x106 ha, which was about 16 % of the total cultivated area. In addition, yields were very low and cereal consumption was only 209 kilograms per capita. However, the irrigated area of the whole country was about 53.3x106 ha in 1998, about 53% of the total cultivated area.

• According to the United Nations World Food Program, in 2003,

China fed 20 percent of the world's population with only 7 percent of the world's arable land. China ranks first worldwide in farm output, and, as a result of topographic and climatic factors, only about 10–15 percent of the total land area is suitable for cultivation .

• Nevertheless, about 60 percent of the population lives in the rural

areas, and until the 1980s a high percentage of them made their living directly from farming.

• Today, agriculture contributes only 13% of China's GDP. the

principal sources of wheat, corn (maize), tobacco, soybeans, peanuts (groundnuts), cotton, potatoes, sorghum, peanuts, tea, millet, barley, oilseed, pork, and fish.

Major non-food crops, including cotton, other fibers, and oilseeds

The total cereal yield of China in 1996 was

504x106 tons, an increase of 69.25x106 tons since 1991, 3.0% annually, 1.9% more than the increased rate of population in the same period. Rice, wheat and maize are the three major

cereals, the yield of the three cereals in 1996 had set an historic record, of which the yield of rice was 195.1x106 tons, increased by 11.29x106 tons over that of 1991 amounting to 6.1%; the yield of wheat was 110.57x106 tons, increased by 14.62 tons more than that in 1991 and amounted to15.2%; and the yield of maize was 127.47x106 tons, increased by 28.7x106 tons over that in 1991 and amounted to 29.1%.

Agro development year(1991-96)

FUTURE AIMS

SCENARIOS AND

• Increasing the Efficiency and Productivity of

Irrigation Water China is a large agricultural country and the use of irrigation water (including the use of on-farm irrigation water and rural domestic water) is 81% of China’s total water consumption. The current efficiency of irrigation is only 0.3 to 0.4, which differs greatly from the 0.7 to 0.9 efficiency in developed countries. This is due to a backward technical and management level of old irrigation facilities which have been in disrepair for a long time.

• If we adopt scientific agricultural water-saving

measures, increase the efficiency of irrigation water to 0.6 to 0.7 and increase the water productivity by 0.3.the production of cereals by 112x106 tons, calculated using productivity at 1.4

U.S.

Direct Investment in

China

• China is an important destination for U.S. FDI, although it is

relatively small in relation to total U.S. FDI, which, according to U.S. data, was nearly $2.1 trillion at the end 2005 .

• FDI in China at the end of 2005 was $51.1 billion (according to

Chinese data), accounting for 8.2% of total cumulative FDI in China, and making the United States the third-largest overall investor in China after Hong Kong and Taiwan.

• Motorola is the largest U.S. foreign investor in China. Its exports of

Chinese made products totaled $6.5 billion in 2005, making Motorola the second largest foreign enterprise exporter in China. It employs 9,000 workers in China and has invested $3.5 billion in China between 1987 and 2005.

Other major U.S. Investors: • include General Motors (GM), Dell Computer, Hewlett-Packard, and Kodak. Annual U.S. FDI flows to China appear to have slowed in recent

•

GM, which employs 20,000 workers in China, also announced in January 2007 that it would invest an average $1 billion per year in China through 2010.

• Foreign Direct Investment (FDI) increased rapidly. In

2001, a total of 26139 new foreign-invested project/enterprises were approved, up by 16.0 percent over the previous year.

• The contractual investing value amounted to US$69.2

billion, up by 10.4 percent over the previous year. The actual value of utilized FDI was US$46.8 billion, up by 14.9 percent over the previous year.

• National foreign exchange reserves continued to

increase. By the end of 2001, total foreign exchange reserves reached US$212.2 billion, an increase of US$46.6 billion than the previous year.

TRADE: • The U.S. trade deficit with China reached $256.3 billion in 2007,

as imports grew 12%. China's share of total U.S. imports has grown from 7% to 16% since 1997. • At the same time, the share of many other Asian countries‘

imports to the United States and the U.S. trade deficit with the Asia-Pacific region as a whole have fallen. • U.S. goods exports to China in 2007 accounted for 5.7% of total

U.S. goods exports, up from 1.9% in 1997. • The top five U.S. exports to china in 2007 were

Electrical machinery and equipment (up 4.8% over 2006 levels), Power generation equipment (up 15%), air and spacecraft (up 18.2%), oil seeds and oleaginous fruits (up 61.7%), and Plastics and plastic articles (up 32.6%).

Chinese Takeovers Companies 





of

U.S.

On December 8, 2004, Lenovo Group Limited, A Computer Company Primarily Owned By The Chinese Government, Signed An Agreement With IBM Corporation To Purchase IBM’S Personal Computer Division For $1.75 Billion. On April 30, 2005, The Acquisition Was Completed. On June 20, 2005, HAIER Group, A Major Chinese Home Appliances Manufacturer, Made A $1.28 Billion Bid To Take Over Maytag Corporation. The Bid Was Withdrawn On July 19, 2005, After Whirlpool Made A Higher Bid. On June 23, 2005, The China National Offshore Oil Corporation (CNOOC), Through Its Hong Kong Subsidiary (CNOOC Ltd.), Made A Bid To Buy A U.S. Energy Company, Unocal, For $18.5 Billion. On August 2, 2005, CNOOC Withdrew Its Bid.

Main industries: mining and ore processing, iron, steel, aluminum, and other metals, coal; machine building; armaments; textiles and apparel; petroleum; cement; chemicals; fertilizers; consumer products, including footwear, toys, and electronics; food processing; transportation equipment, including automobiles, rail cars and locomotives, ships, and aircraft; telecommunications equipment, commercial space launch vehicles, satellites.

Automotive industry • By 2006 China had become the world’s third largest

automotive vehicle manufacturer (after US and Japan) and the second largest consumer (only after US). • Automobile manufacturing has soared during the reform period. In 1975 only 139,800 automobiles were produced annually, but by 1985 production had reached 443,377, then jumped to nearly 1.1 million by 1992 and increased fairly evenly each year up until 2001, when it reached 2.3 million. In 2002 production rose to nearly 3.25 million and then jumped to 4.44 million in 2003, 5.07 million in 2004, 5.71 million in 2005 and 7.28 million in 2006. In 2007, 9 million automobiles are expected to be produced and the country could become the number-one automaker in the world by 2020. Domestic sales have kept pace with production. • After respectable annual increases in the mid- and late 1990s, passenger car sales soared in the early 2000s. In 2006, a total of 7.22 million automobiles have been sold, including 5.18 million units of passenger cars and 2.04

Automotive industry(19752007)

Services • China's services output ranks ranks seventh worldwide, and high

power and telecom density has ensured that it has remained on a high-growth trajectory in the long-term. In 2005 the services sector produced 40.3% of China’s annual GDP, second only to manufacturing.

•

However, its proportion of GDP is still low compared with the ratio in more developed countries, and the agricultural sector still employs a larger workforce.

•

Prior to the onset of economic reforms in 1978, China’s services sector was characterized by state-operated shops, rationing, and regulated prices. With reform came private markets and individual entrepreneurs and a commercial sector.

•

The wholesale and retail trade has expanded quickly, with urban areas now having many shopping malls, retail shops, restaurant chains and hotels. Public administration has still remained a main component of the service sector, while tourism has become a significant factor in employment and as a source of foreign exchange

Economy of the People's Republic of China S. STATISTICS NO

1997

2007

1

GDP ((PPP))

$7.043 trillion

2

GDP (( GROWTH))

$903.0 billion 7.8%

3

GDP per capita

$2040

$5,300

4

UN EMPLOYMENT RATE

3.1%

4%

5

CPI (INFLATION)

-0.8 ( in 98)

6

IMPORT

7

EXPORT

$225.1 billion $249.2

8.5% (april 08) $917.4 billion

8

POPULATION

billion 1236.7 million

11.4%

$1.221 trillion 1,321,851,88 8

GDP BY SECTOR SECTORS

1997

2007

AGRICULTURE

4.3%

11.7%

INDUSTRY

11.4%

49.2%

SERVICE

8.0%

39.1%

EXPORT GOODS: machinery, electrical products, data processing equipment, apparel, textile, steel, mobile phones. MAIN EXPORT PARTENER:

COUNTERY NAME

PERCENTAGE ((%))

UNITED STATES

21

HONG KONG

16

JAPAN

9.5

SOUTH KOREA

4.6

GERMANY

4.2

IMPORT GOODS: machinery and equipment, oil and mineral fuels, plastics, LED screens, data processing equipment, optical and medical equipment, organic chemicals, steel, copper. MAIN IMPORT GOODS: COUNTERY NAME

PERCENTAGE

JAPAN

14.6

SOUTH KOREA 11.3 TAIWAN

10.9

UNITED STATES

7.5

GERMANY

4.8

Working age population to hit 940m by 2020 • China's population above the age of 16 will grow by

5.5 million annually on average in the next 20 years and the total population of working age will reach 940 million by 2020, said a government white paper. • China will take a series of measures to solve the employment problem. These may include: Maintaining the relatively rapid growth of the economy, and putting the work of employment and reemployment in a more salient position; Promoting the readjustment of economic structure and the improvement of employment structure in coordination, and expanding the capacity of employment.