China’s surge

as Global
Economic
Power
China’s Surge as a Global
Economic Power
Group # 9
Members Group # 9
Tripti
Sabyasachi Tripti
Rajan
Mrinal
Mirdula Rajan
Shiv Nandan
Sabyasachi
Mrinal
Mirdula
Shivnandan
CHINA’S SURGE AS A
SUPERPOWER
China- as a global world superpower.
The icing on the cake- hugely successful
Olympic Games 2008.
•Chinese civilization originated in various
city-states along the Yellow River valley
in the Neolithic era.
•Second largest economy when
measured on a PPP basis worth $6.9
trillion
•Third largest in the world when
measured in exchange rate terms, only
after USA and JAPAN.
•Called “The People's Republic of China”
Political Scenario
President: Hue Zintao
Premier: Wen Jiabao
Wen
Jiabao

 In 1995, China accepted the Nuclear Test Ban treaty.

 Taiwan plays a central role in China's growing nationalism
because it serves as a symbol of China's national tragedy
during the "century of humiliation”.
 Hongkong: China acquired Hongkong in 1997.
 Economy
Flash back
 In 1949, China followed a socialist heavy industry development
strategy, or the "Big Push" strategy.
Consumption was reduced while rapid
industrialization was given high priority.
The government took control of a large
part of the economy and redirected resources into building new
factories.
 steps taken for Planned development:
1. Goal to make a technology sophisticated China
2. Focus on industrial sector
3. Policy of “Great Leap Forward”
Contd…
New era of China’s economy:
• Opening up of economy
• Reduction of the role of ideology in
economy
• Political and social stability
• Economic productivity
• Public and consumer welfare
Actions taken..
More dependence on foreign financing and
import,
Relaxation of restraints on foreign trade,
Encouragement to Joint Ventures,
Urban economic reform was aimed,
Resource allocation by state discontinued.
Current scenario post
global meltdown
GDP & Growth:
GDP(nominal) of
china is ranked 4th in the world at
$3.42 trillion
GDP(ppp) of china is
ranked 2nd in the world at 7trilion
Contd…
Inflation control:
Inflation has been growing at a
rate of 7.1% on an annual basis since 2004.
Major concern of the Chinese lie in
the phenomenal increase in the price of food
growing at 18.2%
China has become the world’s manufacturing
hub and the growing economy along with the
surging middle class has made it the second
largest consumer of durable goods.
AGRICULTURE
• China is the world's most populous country and
one of the largest producers and consumers of
agricultural products.
• According to the United Nations World Food
Program, in 2003, China fed 20 percent of the
world's population with only 7 percent of the
world's arable land.
• China ranks first worldwide in farm output, and,
as a result of topographic and climatic factors,
only about 10–15 percent of the total land area
is suitable for cultivation.
Contd…
About 45 percent of China's labor force is
engaged in agriculture.
There are over 300 million Chinese farm
workers - mostly labouring on small pieces of
land .
Yields are high because of intensive
cultivation.
Contd…
• China is the world's largest producer of rice
and is among the principal sources of wheat,
corn (maize), tobacco, soybeans, peanuts
(groundnuts), cotton, potatoes, sorghum,
peanuts, tea, millet, barley, oilseed, pork, and
fish.
• Major non-food crops, including cotton, other
fibres, and oilseeds, furnish China with a small
proportion of its foreign trade revenue.
• Agricultural exports, such as vegetables and
fruits, fish and shellfish, grain products, and
meat , are exported to Hong Kong.
Increases in Output of Major Agricultural
Products
(10,000 tons)
Variety 1949 1978 1999

grain 11,318 30,477 50,839

cotton 44.4 216.7 383.1

oil-bearing crops 256.4 521.8 2,601.2

sugarcane 264.2 2,111.6 7,470

tea 4.1 26.8 67.6

fruit 120.0 657.0 6,237.6

meat 220.0 856.3 5,960.9

BANKING REFORMS
China’s official currency, the Renminbi (RMB), is issued
and managed by the People’s Bank of China.
China exercises centralized management over foreign
exchange, this function being performed by the
General Administration of Exchange Control.
In 1994, reforms were carried out in the administration
of foreign currencies, adopting a combination of
exchange rates.
These reforms opened up the economy to the rest of
world
SHANGHAI STOCK
EXCHANGE (SSE)
The Shanghai Stock Exchange (SSE) was founded on
Nov. 26th,1990 and started its operation on
Dec.19th of the same year.
It is a non-profit-making membership institution
directly governed .
The SSE endeavors to realize a variety of functions
providing marketplace and facilities for the
securities trading , disseminating market
information.
 formulating business rules,
 accepting and arranging listings
organizing and monitoring securities trading
regulating members and listed companies
SHANGHAI STOCK
EXCHANGE (SSE)
The SSE has become the most preeminent
stock market in Mainland China in terms of
number of listed companies, number of
shares listed, total market value .
 December 2007 ended with over 71.30
million investors and 860 listed companies.
 The total market capitalization of SSE hit
RMB 26.98 trillion.
 In 2007, Capital raised from SSE market
surpassed RMB 661.6 billion.
Global Super
Power??
Nuclear power
Balancing of inflation and growth rate
Sustainable economic growth rate
Vast scale of production
Cheap labour
Dragon heads
Forex reserve
Nuclear Power
 Main source of electricity: fossil fuel
 Hydro Power generation: Three Gorges and Yellow River
 Moves to build nuclear power started in 1970.

With more than a dozen countries involved to some extent in

developing China’s nuclear industry, the impacts are already
being felt. Nowhere else in the world can one observe a
comparable variety of commercial nuclear technologies:

 China has Canadian reactors.

 China has French reactors.
 China will soon have Russian reactors.
 And, of course, China has Chinese reactors.
Nuclear Generation
Projection for Asia
China’s Nuclear
Projects’ Location
China’s Trade with the
world
 China’s global trade surplus set another
record in 2007 of $262.2 billion, up 47.7%
 Top export of China:
1. Electrical machinery (including consumer
electronics)
2. Power generation equipment
3. Iron and steel
4. Motor vehicle
Contd…
China's trade with the world $ billion

  2003 2004 2005 2006 2007

Export 438 593.3 762 969.1 1218

% Change 34.6 35.4 28.4 27.2 25.7

Import 412.8 561.2 660 791.5 955.8

% Change 39.8 36 17.6 20 20.8

Total 851 1154.6 1421.9 1760.4 2173.8

% Change 37.1 35.7 23.2 23.8 23.4

Balance 25.5 32.1 102 177.5 262.2

China’s Top Export
China's top export Jan- Nov 2007 ($ billion)

Commodity Description Volume % Change

Electrical machinery and equipment 271.3 31.8
Power generation equipment 207 23.1
Apparel 99.5 24.1
Iron and Steel 90.2 52.4
Optics and medical equipment 33.2 12.5
Furniture 32.5 28
Vehicle other than railway 28.6 40
Inorganic and organic chemicals 27.2 30.2
Toys and games 24.8 19.3
Plastic and articles thereof 24.1 18.9

% change over Jan- Nov 2006
Contd…
China's top import ($ billion)
Commodity Description Volume % change
Electrical machinery and equipment 234.1 18.2
Power generation equipment 112.1 13.5
Mineral fuel and oil 94 13.4
Optics and medical equipments 62.3 16.6
Ores, slag and ash 47.9 65.1
Plastic and articles thereof 41.3 21.1
Inorganic and organic chemical 40.8 24.3
Iron and steel 28.3 15.9
Copper and articles thereof 24.8 64
Vehicles other than railway 19.7 27.7

% change over Jan- Nov 2006
Negatives
• China’s strong economic growth has some clouds on
horizon, it cannot happen without access to vast
amounts of natural resources of the world.
• The construction boom has led to higher prices of
concrete copper and steel throughout the world.
• The increase in automobiles purchased in China has
helped push global prices to record levels.
Contd…
China manufacturing has led to massive
layoffs throughout the world as factories are
either shutting down or moving to china to
become compitative.
The inequalities particularly rural-urban has
been increasing as those left behind are
becoming restive.
New Trends in China's
International Trade
• Heavy investments throughout Africa

• Trade alliances all over the globe

• Acquisition of natural resources

• Long term economic planning

 Why China will beat the
global downturn?
Balancing act with currency , foreign holdings,
inflation and growth.
Forex Reserves
Trade Surplus
Increased domestic spending
Regulations & Policies and their implementation
The spreading of its global trade