Economy of China

Shanghai, the financial center of China
Currency	Renminbi (CNY, ¥)
Fiscal year	Calendar year
Trade organizations	WTO, BRICS, SCO, APEC, RCEP, G20, G77 and others
Country group	Developing country[1] Upper-middle income country Newly industrialised country[2]
Statistics
Population	1,409,670,000 (2024)
GDP	$18.533 trillion (nominal; 2024 est.)[3] $35.291 trillion (PPP; 2024 est.)[3]
GDP rank	2nd (nominal; 2023) 1st (PPP; 2023)
GDP growth	5.2% (2023) 4.6% (2024) 4.1% (2025)[3]
GDP per capita	$13,136 (nominal; 2024)[3] $25,015 (PPP; 2024)[3]
GDP per capita rank	68th (nominal; 2024) 65th (PPP; 2024)
GDP by sector	Agriculture: 7.1% Industry: 38.3% Services: 54.6% (2023)[4]
GDP by component	Household consumption: 39.2% Government consumption: 16.5% Investment in fixed capital: 41.4% Investment in inventories: 0.7% Exports of goods and services: 18.9% Imports of goods and services: 14.3% Net exports: 2.1% (2023)[4]
Inflation (CPI)	1.0% (2024)[3]
Population below poverty line	25% on less than $6.85/day (2020)[5]
Gini coefficient	37.1 medium (2020)[6][note 1]
Human Development Index	0.788 high maximum (2022, 75th)[7] 0.662 medium actual (2022, IHDI 66th)[8][9]
Corruption Perceptions Index	42 out of 100 points (2023)[10] (rank 76th)
Labor force	779,890,786 (2023)[11] (1st) 67.3% employment rate (2019)[12]
Labor force by occupation	Agriculture: 22.8% Industry: 29.1% Services: 48.1% (2023)[4]
Unemployment	5.2% (December 2023)[13] 14.2% youth unemployment (May 2024, 16 to 24 year olds)[14]
Average gross salary	US$ 1,305 (urban non-private sector) US$ 747 (urban private sector) per month (2022)
Average net salary	US$ 1,002 (urban non-private sector) US$ 578 (urban private sector) per month (2022)
Final consumption expenditure	55.7% of GDP (2023)[4]
Gross capital formation	42.1% of GDP (2023)[4]
Gross savings	43.46% of GDP (2024)[1]
Yield curve	10-Year Bond 2.831% (April 2023)[15]
Purchasing Managers' Index	49.10 Manufacturing (February 2024)[16] 51.40 Non-Manufacturing (February 2024)[17]
Main industries	High-technology, mining and ore processing, iron, steel, aluminum, and other metals, renewable energy, coal; machine building; armaments; textiles and apparel; petroleum; cement; chemicals; fertilizer; consumer products (including footwear, toys, and electronics); defence, information technology, artificial intelligence, agribusiness, food processing; transportation equipment, including automobiles, railcars and locomotives, ships, aircraft; biotechnology, pharmaceutical, telecommunications equipment, space exploration, commercial space launch vehicles, satellites
External
Exports	$3.380 trillion (2023)[18]
Export goods	Agricultural products 2.2% Fuels and mining products 2.4% Manufacturers 74.3% Others 0.1%[19]
Main export partners	ASEAN 15.5%  European Union 14.8%  United States 14.8%  Hong Kong 8.12%  Japan 4.66%  South Korea 4.40%  India 3.48%  Russia 3.28% Others 30.96%[18]
Imports	$2.557 trillion (2023)[18]
Import goods	Agricultural products 7.5% Fuels and mining products 21.3% Manufacturers 64.4% Others 4.8%[19]
Main import partners	ASEAN 15.18%  European Union 11.02%  Taiwan 7.80%  United States 6.42%  South Korea 6.33%  Japan 6.28%  Australia 6.08%  Russia 5.05% Others 35.48%[18]
FDI stock	Inward: $181 billion (2021)[20] Outward: $145 billion (2021)[20]
Current account	$272.5 billion (2023)[1] 1.4% of GDP (2023)[1]
Gross external debt	$2.38 trillion (September 2023)[citation needed]
Public finances
Government debt	¥103.987 trillion 82.9% of GDP (2023)[1]
Budget balance	2.8% of GDP (2023)[21]
Revenues	¥33.229 trillion[1] 26.5% of GDP (2023)
Expenses	¥42.140 trillion[1] 33.6% of GDP (2023)
Credit rating	Standard & Poor's:[22] A+ (Domestic) A+ (Foreign) A+ (T&C Assessment) Outlook: Stable Moody's:[23] A1 Outlook: Negative Fitch:[24] A+ Outlook: Negative Scope:[25] A Outlook: Stable
Foreign reserves	$3.3 trillion (2023)[26][27] (1st)
All values, unless otherwise stated, are in US dollars.

China has an upper middle income,^[28] developing, mixed, socialist market economy incorporating industrial policies and strategic five-year plans.^[29] It is the world's second largest economy by nominal GDP, behind the United States, and the world's largest economy since 2016 when measured by purchasing power parity (PPP).^{[note 2]} China accounted for 19% of the global economy in 2022 in PPP terms,^[30] and around 18% in nominal terms in 2022.^[30][31] The economy consists of public sector enterprises, state-owned enterprises (SOEs) and mixed-ownership enterprises, as well as a large domestic private sector and openness to foreign businesses in their system. According to the annual data of major economic indicators released by the National Bureau of Statistics since 1952, China's GDP grew by an average of 6.17% per year in the 26 years from 1953 to 1978. China implemented economic reform in 1978, and from 1979 to 2023, the country's GDP growth rate grew by an average of 8.93% per year in the 45 years since its implementing economic reform. According to preliminary data released by the authorities, China's GDP in 2023 was CN￥126.06 trillion (US$ 17.89 trillion^[32]) with a real increase of 5.2% than the last year. ^[33]

China is the world's largest manufacturing economy and exporter of goods.^[34] However, exports as a percentage of GDP has steadily dropped to just around 20%, reflecting its decreasing importance to the Chinese economy. Nevertheless, it remains the largest trading nation in the world and plays a prominent role in international trade.^[35][36] Manufacturing has been transitioning toward high-tech industries such as electric vehicles, renewable energy, telecommunications and IT equipment, and services has also grown as a percentage of GDP. It is also the world's fastest-growing consumer market and second-largest importer of goods.^[37] China is also the world's largest consumer of numerous commodities, and accounts for about half of global consumption of metals.^[38] China is a net importer of services products.^[39] China was the largest recipient of foreign direct investment (FDI) in the world as of 2020, receiving inflows of $163 billion.^[40] but more recently, inbound FDI has fallen sharply to negative levels.^[41][42] It has the second largest outbound FDI, at US$136.91 billion for 2019.^[43]

China has the world's largest foreign-exchange reserves worth $3.1 trillion,^[44] but if the foreign assets of China's state-owned commercial banks are included, the value of China's reserves rises to nearly $4 trillion.^[45] China faced a mild economic slowdown during the 2007–2008 financial crisis and initiated a massive stimulus package, which helped to regain its economic growth. More recently, the imposition of the "3 Red Lines" on developer borrowing has sparked a real estate crisis and has raised questions on the accuracy of China's claims for the severity of this crisis.^[46][47][48] China's economic growth is slowing down in the 2020s as it deals with a range of challenges from a rapidly aging population, higher unemployment and a property crisis.^[49] China has the world's sixth largest gold reserve, with over 2,000 tonnes of gold.^[50] It spends around 2.43% of GDP on advance research and development across various sectors of the economy.^[51][52]

With 791 million workers, the Chinese labor force was the world's largest as of 2021, according to The World Factbook. In 2022, China was ranked the 11th most innovative country in the world, 3rd in Asia & Oceania region and 2nd for countries with a population of over 100 million. It is the only middle-income economy and the only newly industrialized economy in the top 30.^[53][54] It also leads in several measures of global patent filings,^[55][56] as well as research and scientific output.^[57] It is also the world's largest high-technology exporter.^[58] China has the second-largest financial assets in the world, valued at $17.9 trillion as of 2021.^[59] As of 2022^[update], China was second in the world in total number of billionaires.^[60] and second in millionaires with 6.2 million. China has the largest middle-class in the world, with over 500 million people earning over RMB 120,000 a year.^[61]

China has bilateral free trade agreements with many nations and is a member of the Regional Comprehensive Economic Partnership (RCEP).^[62] China is widely regarded as the "powerhouse of manufacturing" or "the factory of the world".^[63] Of the world's 500 largest companies, 142 are headquartered in China.^[64] It has four of the world's top ten most competitive financial centers^[65] and three of the world's ten largest stock exchanges (both by market capitalization and by trade volume).^[66] Public social expenditure was around 10% of GDP in China.^[67] Additionally, the public pension expenditure in China accounted for 5.2% of GDP.^[68]

History

Historically, China was one of the world's foremost economic powers for most of the two millennia from the 1st until the 19th century.^{[69][70][71][72][73]} China accounted for around one-quarter of the global GDP until the late 1700s compared to India's one-third. China's share of global GDP was one-third in 1820 as the Industrial Revolution was beginning in Great Britain.^{[74][75][76][77]} China's GDP in 1820 was six times as large as Britain's, the largest economy in Europe – and almost twenty times the GDP of the nascent United States.^[78]

At the end of the Chinese Civil War, the economy was devastated.^[79] As the defeated Nationalists fled to Taiwan, they stripped China of liquid assets including gold, silver, and the country's dollar reserves.^[79] By the time the KMT was defeated, commerce had been destroyed, the national currency rendered valueless, and the economy was based on barter.^[79]

The People's Republic of China's development from one of the poorest countries to one of the largest economies was the quickest of any country.^[80]: 11 From 1949 until the Chinese economic reform in 1978, the economy was state-led with market activity remaining underground.^[81] Economic reforms began under Deng Xiaoping.^[81] China subsequently became the world's fastest-growing major economy, with growth rates averaging 10% over 30 years.^[82][83] Many scholars consider the Chinese economic model as an example of authoritarian capitalism,^[84][85] state capitalism^[86] or party-state capitalism.^[87][88]

China brought more people out of extreme poverty than any other country in history^[89][90]—between 1978 and 2018, China reduced extreme poverty by 800 million.^[91] Between 1981 and 2019, the percentage of the population living in extreme poverty decreased from 88.1% to 0.2%.^[92] Its current account surplus increased by a factor of 53 between 1982 and 2021, from $5.67 billion to $317 billion.^[93] During this time, China also became an industrial powerhouse, moving beyond initial successes in low-wage sectors like clothing and footwear to the increasingly sophisticated production of computers, pharmaceuticals, and automobiles. China's factories generated $3.7 trillion real manufacturing value added, more than the US, South Korea, Germany and the UK combined. China's manufacturing sector benefits from one of the world's largest domestic markets, immense manufacturing scale, and highly developed manufacturing supply chains.^[94] It also has two (Shenzhen-Hong Kong-Guangzhou and Beijing in the 2nd and 3rd spots respectively) of the global top 5 science and technology clusters, which is more than any other country.^[53][95]

China has sustained growth due to export relations, its manufacturing sector, and low-wage workers.^[96] China's was the only major world economy to experience GDP growth in 2020, when its GDP increased by 2.3%.^[97] However, it posted one of its worst economic performances in decades because of COVID-19 in 2022.^[98] In 2023, IMF predicted China to continue being one of the fastest growing major economies.^[99] China's economy is both a contributor to rising global greenhouse gas (GHG) emissions causing climate change and severely affected by its adverse impacts, although its per capita emissions are still much lower than developed economies such as the United States.^[100]

Regional economies

China's unequal transportation system, combined with important differences in the availability of natural and human resources and in industrial infrastructure, has produced significant variations in the regional economies of China.^[101] The economic development of Shenzhen has caused the city to be referred to as the world's next Silicon Valley.^[102][103]

Economic development has generally been more rapid in coastal provinces than in the interior and there are large disparities in per capita income between regions. The three wealthiest regions are the Yangtze Delta in East China; the Pearl River Delta in South China; and Jing-Jin-Ji region in North China. It is the rapid development of these areas that is expected to have the most significant effect on the Asian regional economy as a whole and Chinese government policy is designed to remove the obstacles to accelerated growth in these wealthier regions. By 2035, China's four cities (Shanghai, Beijing, Guangzhou and Shenzhen) are projected to be among the global top ten largest cities by nominal GDP according to a report by Oxford Economics.^[104]

GDP by administrative division