Economy

Main articles: Economy of China, Agriculture in China, and List of Chinese administrative divisions by GDP

China and other major developing economies by GDP per capita at purchasing-power parity, 1990–2013. The rapid economic growth of China (red) is readily apparent.^[268]

The Shanghai Stock Exchange building in Shanghai's Lujiazui financial district. Shanghai has the 25th-largest city GDP in the world, totalling US$304 billion in 2011^[269]

China had the largest economy in the world for most of the past two thousand years, during which it has seen cycles of prosperity and decline.^[270][271] As of 2014, China has the world's second-largest economy in terms of nominal GDP, totalling approximately US$10.380 trillion according to the International Monetary Fund.^[12] If purchasing power parity (PPP) is taken into account, China's economy is the largest in the world, with a 2014 PPP GDP of US$17.617 trillion.^[12] In 2013, its PPP GDP per capita was US$12,880, while its nominal GDP per capita was US$7,589. Both cases put China behind around eighty countries (out of 183 countries on the IMF list) in global GDP per capita rankings.^[272]

Economic history and growth

Main article: Economic history of China (1949–present)

From its founding in 1949 until late 1978, the People's Republic of China was a Soviet-style centrally planned economy. Following Mao's death in 1976 and the consequent end of the Cultural Revolution, Deng Xiaoping and the new Chinese leadership began to reform the economy and move towards a more market-oriented mixed economy under one-party rule. Agricultural collectivization was dismantled and farmlands privatized, while foreign trade became a major new focus, leading to the creation of Special Economic Zones (SEZs). Inefficient state-owned enterprises (SOEs) were restructured and unprofitable ones were closed outright, resulting in massive job losses. Modern-day China is mainly characterized as having a market economy based on private property ownership,^[273] and is one of the leading examples of state capitalism.^[274][275] The state still dominates in strategic "pillar" sectors such as energy production and heavy industries, but private enterprise has expanded enormously, with around 30 million private businesses recorded in 2008.^{[276][277][278][279]}

Nanjing Road, a major shopping street in Shanghai

Since economic liberalization began in 1978, China has been among the world's fastest-growing economies,^[280] relying largely on investment- and export-led growth.^[281] According to the IMF, China's annual average GDP growth between 2001 and 2010 was 10.5%. Between 2007 and 2011, China's economic growth rate was equivalent to all of the G7 countries' growth combined.^[282] According to the Global Growth Generators index announced by Citigroup in February 2011, China has a very high 3G growth rating.^[283] Its high productivity, low labor costs and relatively good infrastructure have made it a global leader in manufacturing. However, the Chinese economy is highly energy-intensive and inefficient;^[284] China became the world's largest energy consumer in 2010,^[285] relies on coal to supply over 70% of its energy needs, and surpassed the US to become the world's largest oil importer in September 2013.^[286][287] In the early 2010s, China's economic growth rate began to slow amid domestic credit troubles, weakening international demand for Chinese exports and fragility in the global economy.^{[288][289][290]}
In the online realm, China's e-commerce industry has grown more slowly than the EU and the US, with a significant period of development occurring from around 2009 onwards. According to Credit Suisse, the total value of online transactions in China grew from an insignificant size in 2008 to around RMB 4 trillion (US$660 billion) in 2012. The Chinese online payment market is dominated by major firms such as Alipay, Tenpay and China UnionPay.^[291]

China in the global economy

China is a member of the WTO and is the world's largest trading power, with a total international trade value of US$3.87 trillion in 2012.^[20] Its foreign exchange reserves reached US$2.85 trillion by the end of 2010, an increase of 18.7% over the previous year, making its reserves by far the world's largest.^[292][293] In 2012, China was the world's largest recipient of inward foreign direct investment (FDI), attracting $253 billion.^[294] In 2014, China's foreign exchange remittances were $US64 billion making it the second largest recipient of remittances in the world.^[295] China also invests abroad, with a total outward FDI of $62.4 billion in 2012,^[294] and a number of major takeovers of foreign firms by Chinese companies.^[296] In 2009, China owned an estimated $1.6 trillion of US securities,^[297] and was also the largest foreign holder of US public debt, owning over $1.16 trillion in US Treasury bonds.^[298][299] China's undervalued exchange rate has caused friction with other major economies,^{[204][300][301]} and it has also been widely criticized for manufacturing large quantities of counterfeit goods.^[302][303] According to consulting firm McKinsey, total outstanding debt in China increased from $7.4 trillion in 2007 to $28.2 trillion in 2014, which reflects 228% of China's GDP, a percentage higher than that of some G20 nations.^[304]

Graph comparing the 2014 nominal GDPs of major economies in US$ billions (IMF)[305]

China ranked 29th in the Global Competitiveness Index in 2009,^[306] although it is only ranked 136th among the 179 countries measured in the 2011 Index of Economic Freedom.^[307] In 2014, Fortune's Global 500 list of the world's largest corporations included 95 Chinese companies, with combined revenues of US$5.8 trillion.^[308] The same year, Forbes reported that five of the world's ten largest public companies were Chinese, including the world's largest bank by total assets, the Industrial and Commercial Bank of China.^[309]