China Economy

1
China Economy

• China population 1.3 billion
• Third largest economy in world
• Set to be largest by 2030 - 2040
• GDP per capita US3,000 (2008)
• Over 40 of GDP is investment
• Over 50 of investment is infrastructure and
  property

2
Urban Population
Source UN World Urbanisation Prospects 2007
3
Urban Population

• Currently 600 million urban residents
• Percentage over double that of 1982
• Shortly after Open Door Policy
• Additional 100 million by 2020
• Additional 400 million by 2050

4
Transformation

• Historic transformation
• Agricultural gt industrial gt post-industrial
• Process is familiar but scale unprecedented
• In addition
• Adjustments to modern socialist market economy
• Changes in lifestyle, increasing household income

5
Urbanisation Timeline

• 1960s - urbanisation controlled, movement
  regulated by household registration system
• 1970s introduction of One-child Policy
• 1980s reforms, household registration system
  somewhat relaxed
• 1980s/90s - significant rural industrialisation,
  in situ urbanisation
• 1990s/00s - growth poles, city leading the
  country

6
Urbanisation Characteristics

• Rural industrialisation and urbanisation
• Increase of 462 cities 1978 - 2007
• By 1996, TVEs 46 of exports
  
• (Li 2006, World Bank)
• Future focus
• Rural urban migration
• City clusters and urban rural integration
• CPCs 17th Congress

7
Some Milestones

• Creation of urban land market
• Assignment of land-use rights
• Establishment of urban planning system
• Reform of the household registration system
• Marketisation of housing and food

8
Pearl River Delta


9
National Priorities
10
National Priorities

• Coastal provinces more than half GDP in 2005
• Bohai Economic Circle
• Yangzi River Delta
• Pearl River Delta
• Develop Centre and West
• Restructure industrial North East
• Close gap rural and urban incomes

11
Challenges Climate Change

• Committed to UNFCCC principle of "Common but
  differentiated responsibilities"
• China National Climate Change Action Plan
• Science and Technology Action Plan on Climate
  Change
• Worlds largest emitter of CO2
• Urbanisation to increase GHG emissions
• Mitigate impacts of climate change

12
Challenges Urban Issues

• Reduce energy consumption/capita GDP by 20 by
  2010
• Consumption of energy/unit GDP 3.5 x US
• (World Bank)
• Urban air and water pollution
• Availability of freshwater
• Impacts of continuing motorisation

13
Challenges Social and Economic Issues

• Stimulation of domestic demand
• Food security
• Red line" of 120 million ha of arable land
• Rural development and living standards
• Migrant workers, health and welfare
• Ageing of population

14
Scale of Urban Issues


15
Medium-term GDP Forecasts
Source The Economist
16
Short-term Priorities

• Stimulus package of US585 billion
• Low-income housing
• Rural infrastructure
• Water, electricity, transportation
• Environment
• Technological innovation
• Sichuan reconstruction

17
Potential Future Milestones

• Rural land reforms
• Land held collectively
• 700 million peasant farmers
• Municipal finance reform
• Land disposal contribution to GDP
• Promotion of green industry
• Liveability of larger cities

18
Conclusions

• China a significant market going forward
• Continuing growth beyond short-term stimulus
• Historic transformation from agrarian society
• Urbanisation, industrialisation, modernisation
• A rich country but modest per capita GDP

19
Conclusions

• National priorities to continue to develop
• Bohai economic circle
• Yangzi River Delta
• Pearl River Delta
• Development of Centre and West regions
• Restructuring of industrial North East

20
Conclusions

• Considerable challenges ahead
• Climate change
• Transport, energy, environment and water
• Rural area development and living standards
• Stimulating domestic demand, innovation
• Long traditions of government and education