Countrys data at a glance China Region: East Asia and Pacific Income level: Upper Middle Income Population,

total: 1,338,299,512(2010) GDP(current US$): $5,878,629,246,677(2010)

GDP growth(annual %): 10.3%(2010)

Inflation, GDP deflator(annual%): 5.8% China has had a remarkable period of rapid growth shifting from a centrally planned to a market based economy. Today, China is a lower middle-income country that has complex development needs, where the Bank continues to play an important development role.

Sources from: www.worldbank.org

Reasons of China's rapid economic development in a quarter of a century

Since the beginning of 1970s, China has entered a historical period of economic reform, opening up and modernization. Within a timeframe of 25 years, the Chinese economy has consistently maintained its rapid growth momentum. During such a period, China's annual GDP growth rate was averaged at 9.4 percent, the income and living standard of urban and rural residents continuously improved, and foreign trade volume expanded by 16 percent each year. Utilized foreign direct investment reached USD676.9 billion and the official foreign exchange reserves increased from USD19.4 billion to USD403.3 billion. China now is the 2th largest economy in the world, with its overall economic strength markedly improved. Per capita GDP was quadrupled in 20 years up to the end of last century. There are several reasons for the eye-catching achievements in terms of social and economic development in China.

www.pbc.gov.cn/publish/english/956/1940/19405/19405_.html

Reasons of China's rapid economic development in a quarter of a century

First, steadfast in pressing ahead with the socialist market economic system reform. We have carried out restructuring of the public ownership system and instead established an economic system featuring the public ownership as the mainstay and co-existence of various economic sectors. Non-state sectors have experienced rapid development and constituted an important force in supporting economic growth and job creation in China. In the meantime, we have proceeded with reform of the rationing system seen in distribution and allocation of resources, property, income, production and sales under the planned economy, and come to have established an economic structure in which the market could play its fundamental role in resource allocation. Various markets including the capital market, technology market, real estate market and labor market have all mushroomed from nowhere to bring about a marked improvement of the marketization of the Chinese economy. The preliminary establishment of the socialist market economic system has laid a solid institutional foundation for China's rapid economic development.

www.pbc.gov.cn/publish/english/956/1940/19405/19405_.html

Reasons of China's rapid economic development in a quarter of a century

Second, steadfast in advancing economic opening up to integrate into the world economic development. We have ended China's isolation from the world economic development and opened the Chinese economy to the outside world at different levels on a broad scale. Efforts have been made to take full advantage of both the internal and external resources and markets to effect China's competitive advantage in the global economy. On November 11, 2001, China joined the WTO, marking an important step forward for China's economic opening up and reform. In 2003, China's total goods trade volume amounted to USD851.2 billion, ranking the 4th place in the world. Inflow of FDI totaled USD53.5 billion, topping all the developing nations. Rapid growth of trade and continuous increase of FDI have not only contributed to the expansion of export and job creation, but also substantially increased the import of much needed scarce resources and equipments. Furthermore, the inflow of advanced technology and management skills has helped to boost China's technology and competitiveness, providing additional support to economic reform.

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Reasons of China's rapid economic development in a quarter of a century

Third, we have always been conscious of striking a balance between reform, development and stability. China is a big developing country with a population of 1.4 billion and large disparities in terms of regional economic development. It is by no means an easy job to press ahead with economic reform and modernization and make everyone live a comfortable life in such a country. One important piece of our experiences is that adequate attention must be paid to handle the relationship between reform, development and stability. In our view, stability, namely the social, political and economic stability constitutes the prerequisite to ensure steady progress of economic reform and development. Since reform will more or less affect the interests of almost all the parties in the society, it is important to make the reform endurable to the individuals, enterprises and all other social sectors. Under the leadership of the Chinese Communist Party and taking into consideration of the Chinese situation, we have embarked on a path of reform gradualism to build a socialist market economic system with Chinese characteristics. That is to say, we will on the one hand stick to the mandate of socialist market economic reform, while on the other hand give full consideration to the endurance of all walks of life, and strive to make the reform benefit most of the people in the society.
www.pbc.gov.cn/publish/english/956/1940/19405/19405_.html

Reasons of China's rapid economic development in a quarter of a century

In practice, sweeping reforms are usually introduced when favorable conditions arise, and the pace of reform will be slowed down if conflicts intensify. All in all, in the process of economic and social development, we have always made the harmony between the strength of reform, the speed of development and the endurance of the general public a top priority, and targeted a persistent improvement of the people's living standard as the lock-point for handling relationship among the three factors. Such a consensus has contributed to the mutually re-enforcement of reform, development and social stability.

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Reasons of China's rapid economic development in a quarter of a century

Despite the outstanding achievements mentioned above, we should remain clear about the fact that China is still a developing country with large population. Though large in absolute size, China's GDP measured by per capita is still very low, with the 2003 figure just exceeding USD1000. Myriads of problems, including slow growth of the farmers' income, pressures on employment and social security system, regional development disparity, widening gap of income distribution and degradation of environment etc., remain to be conquered on our way moving forward. Since these problems emerge in the process of development, they must only be addressed in the process of development.
National Poverty Rate of China Year 1996 1998 2004 Rate(%) 6 4.6 2.8

Sources from: www.worldbank.org

www.pbc.gov.cn/publish/english/956/1940/19405/19405_.html

Year 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988

Rate(%) -27.1 -6.1 10.3 15.8 16.4 10.7 -5.7 -4.1 16.9 19.4 7 3.8 7.9 2.3 8.7 -1.6 7.6 11.7 7.6 7.8 5.2 9.1 10.9 15.2 13.5 8.8 11.6 11.3

China's GDP Growth Rate Year Rate(%) 1989 4.1 1990 3.8 1991 9.2 1992 14.2 1993 14 1994 13.1 1995 10.9 1996 10 1997 9.3 1998 7.8 1999 7.6

Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Rate(%) 8.4 8.3 9.1 10 10.1 11.3 12.7 14.2 9.6 9.2 10.3

China's GDP Growth Rate(%)

16

14
12 10 8 6 4 2 0 1975

1980

1985

1990

1995

2000

2005

2010

2015

Sources from: www.worldbank.org

Year 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987

Merchandise Trade Percentage at GDP of China Percentage Year Percentage Year Percentage 8.50 1988 33.21 1999 33.29 7.36 1989 32.47 2000 39.57 7.07 1990 32.34 2001 38.47 6.92 1991 35.76 2002 42.70 6.76 1992 39.16 2003 51.86 6.90 1993 44.43 2004 59.77 6.80 1994 42.31 2005 63.00 6.33 1995 38.58 2006 64.89 6.30 1996 33.86 2007 62.29 5.52 1997 34.13 2008 56.69 5.01 1998 31.78 2009 44.22 4.98 Merchandise Trade Percentage at GDP of 5.83 8.10 China Percentage(%) 10.47 35 9.69 30 8.97 8.51 25 14.23 16.55 20 20.08 15 22.68 20.48 10 19.09 20.80 5 22.70 0 24.79 1955 1960 1965 1970 1975 1980 1985 1990 30.57 Sources from: www.worldbank.org

Exchange rate from US Dollar to Chinese Yuan Year 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 Rate() 2.462 2.245 1.989 1.961 1.859 1.941 1.858 1.684 1.555 1.498 Year 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 Rate() 1.705 1.893 1.976 2.32 2.937 3.453 3.722 3.722 3.765 4.783 Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Rate() 5.323 5.516 5.762 8.619 8.351 8.314 8.29 8.279 8.278 8.279 Year 2001 2002 2003 2005 2006 2007 2008 2009 2010 2011.11.14 Rate() 8.277 8.277 8.277 8.0702 7.8087 7.304 6.8447 6.82702 6.60231 6.35574

Exchange rate from US Dollar to Chinese Yuan()

10 9 8 7 6 5 4 3 2

1
0 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

Sources from: www.worldbank.org

Unemployment Rate of China Year 1980 1981 1982 1983 1984 1985 Rate(%) 4.9 3.8 3.2 2.3 1.9 1.8 Year 1990 1991 1992 1993 1994 1995 Rate(%) 2.5 2.3 2.3 2.6 2.8 2.9 Year 2000 2001 2002 2003 2004 2005 Rate(%) 3.1 3.6 4 4.3 4.2 4.2

World Unemployment Rate Year 1994 1995 1996 1997 Rate(%) 5.29 5.30 5.08 5.40

1998
2000 2004 2005

5.60
5.58 6.59 6.17

1986
1987 1988 1989

2
2 2 2.6

1996
1997 1998 1999

3
3.1 3.1 3.1

2006
2007 2009

4.1
4 4.3

Unemployment Rate of China(%)

6

0 1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

Sources from: www.worldbank.org