On 1st October 2009, China will mark 60 years since the founding of the People's Republic of China.
During these six decades, the country transformed itself from the “Weak Man of Asia” to a world economic power.
Euromonitor International highlights the major achievements as well as challenges facing Chinese society and the economy, particularly over the 30-year period since the announcement of the “open door” policy in 1978.
- In 2001, China surpassed Japan as the world's second-largest economy in terms of GDP, measured in purchasing power parity. However, based on GDP per capita, China is still significantly poorer than Japan;
- The Chinese urban population is expected to overtake the rural population in 2015 and top 1.0 billion by 2030;
- As a result of the one-child policy implemented since 1979, the Chinese population is ageing rapidly. By 2020, the proportion of people aged 65+ is forecast to reach 13.1% of the Chinese population, accounting for a quarter of the global elderly population;
- China leads the world in the number of university students and Internet users, having overtaken the USA in 2005 and 2008 respectively.
- Following the shift from a centrally planned mechanism to a market economy in the late 1970s, China has since the early 1980s recorded one of the fastest periods of economic growth in world history.
In 2001, China surpassed Japan as the world's second-largest economy in terms of GDP, measured in purchasing power parity (PPP). However, based on GDP per capita, China is still significantly poorer than Japan.
In 2008, China's GDP per capita, measured at purchasing power parity, stood at I$5,962 compared with Japan's I$34,627 per capita.
Structure of demand
- China's economic expansion has been driven by exports, which rose from 10.6% of GDP to 39.9% of GDP during 1980-2008.
A large trade surplus also drove the country's foreign exchange reserves, making China the world's largest foreign reserve holder (with over US$2.1 trillion in June 2009).
In the face of plunging exports as a consequence of the global economic downturn since late 2008, China is relying on government stimulus measures to boost domestic demand and fixed-asset investment.
In the long term, however, the country aims to shift the foundation of economic growth from exports to private consumption, which accounted for 35.2% of GDP in 2008.
- China's robust economic growth since the early 1980s has been accompanied by a rapid increase in energy consumption.
In 2008, total primary energy consumption was 4.8 times higher than 1980. China emerged from being a net oil exporter in the early 1990s to become the world's third-largest net importer of oil in 2006.
Amid concerns about energy security and energy efficiency, China has made an effort to diversify its energy supplies.
However, coal still supplies the vast majority of China's total energy consumption requirements (70.2% in 2008).
- The unprecedented pace of economic growth since the early 1980s has put enormous pressure on the environment. As the world's largest polluter, China accounted for 23.4% of the world's carbon dioxide emissions in 2008.
In September 2009, China announced that it would curb its carbon intensity, measured as carbon emissions per unit of GDP, by a "notable margin" by 2020 from the 2005 level.
It will do so by developing “vigorously” renewable energy and nuclear energy.
- The one-child policy implemented since 1979 has reduced China's birth rate (from 22.5 births per 1,000 inhabitants in 1988 to 12.2 births per 1,000 inhabitants in 2008) and slowed population growth.
At 1.3 billion people in 2008, however, the Chinese population is still the world's largest, accounting for about one-fifth of the global total. The Chinese population is also ageing rapidly.
By 2020, the proportion of people aged 65+ is forecast to reach 13.1% of the population (up from 9.4% in 2008 and 4.5% in 1978) and account for a quarter of the global elderly population;
Life and culture
- The infamous crushing of student-led pro-democracy demonstrations on Tiananmen Square in 1989 has not diminished the role of Chinese students in helping to bring about social and political change.
In 2005, China overtook the USA to be the world leader in the number of university students, with 15.6 million students.
China is also leading the world in Internet usage, having overtaken the USA in 2008 with 298 million users.
Despite the government's tight supervision of web contents, the growing student population will be an important driver of Internet usage in China, as students are the most active group of Internet users in the country.
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1st Oct 2009