Ing.Tomáš Dudáš, PhD.

Basic Information
Area – approximately the size of USA

Population – approximately 1,3 billion

President – Hu Jintao

Prime minister– Wen Jiabao

Mixed economy– (market economy and socialist style

command economy)
Historical background
1949 – Peoples Republic of China was
established

1949-1976 – Stalinist style command

economy under the leadership of Mao Zedong

1958-1961 - Great Leap Forward

1966–1976 - Cultural Revolution

Economic reform
1978 – bad economic conditions (dual society,
where the urban population had 3x higher income
than the rural population)
1978 – start of the reforms (Deng Xiaoping)
„Specific Chinese socialism or socialist market
economy”
4 modernizations (agriculture, industry, science
and technology and military)
First step– introduction of market principles into
the agriculture
Windows into the world (special economic zones)
1989 - political and social problems
2001 – Entrance into the WTO
Main economic data - 2008
GDP – 4,42 trillion USD
GDP – 7,97 trillion USD (PPP)
GDP/c – 6 300 USD (PPP)

GDP composition (%) – 11,3-48,6-40,1

Labor force– 807 million
Labor force composition – 43-25-32
Main economic data - 2008
Unemployment – in cities officially 4-5 %
(reality 10%)
Rural unemployment– we can only
approximate (approx. 20 %)
Hourly wage - 1 USD/hour and less
Inflation – 5,9 %
Currency– juan/renminbi (fixed exchange
rate)
Main economic data - 2008
Main business partners:

Export – US 18.6%, Hong Kong 12.7%, Japan

8.2%, South Korea 5.1%, Germany 4.2%
(2008)

Import – Japan 12.2%, South Korea 10%, US

6.6%, Hong Kong 4.9%, Germany 4.5% (2008)
Main economic problems of China
Population problems – legacy of one child policy
Social problems – the poor rural regions are loosing
ground economically (the hukou system
exacerbates the problems)
Approx. 150 million commuters (high share of
illegal ones)
Rising social tensions (70 000 social unrests and
demonstrations)
Main economic problems of China
High energy and resource intensity of the
economy – China is the second largest
consumer of oil and energy

China is one of the largest polluters in the

world (Co2 emissions will grow fourfold in the
next century) – China did not sign the Kyoto
protocol
Main economic problems of China
Inefficient state owned enterprises– legacy of
socialism (mainly heavy industry)
Solution – liquidation (but it would lead to
increased unemployment in the poor regions)
or privatization
Problems in the banking sector– a huge
portion of bad debts in the big state owned
banks
Main economic problems of China
High level of corruption – from the communal
level up to the top level party and military
leader

The foreign corporations adapted – the

potential gains are huge

Problems with the protection of intellectual

property rights
Other social and economic
problems
The mixture of two economic systems brought
out the worst problems of both systems
Problems in the area of human rights
Problem of Tibet
Problem of Taiwan
Control of mass media (internet control – new
challenge)
East Asia

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China’s economic
cooperation
China-ASEAN FTA (in effect by 2010 for 6 ASEAN
members and 2015 for the remaining 4)

China-Singapore FTA

China-Philippines investment acts

Various acts with Mekong Delta countries

Difficulties in EU-China trade
Protection of Intellectual property rights
Counterfeiting and product piracy
Product safety concerns
Ballooning bilateral trade deficit
China’s undervalued currency
China’s delay in enforcing WTO rules
Unfair subsidies to favored national industries

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