FOREIGN TRADE UNIVERSITY INSTITUTE OF ECONOMY AND INTERNATIONAL BUSINESS **************** MACROECONOMICS MID-TERM TEST CHINA’S GROWTH IN THE PERIOD 2010-2020 Students: Nguyen Thi Hong Ngoc – Leader - 2112530035 Tran Quoc Viet - 2112530056 Nguyen Minh Anh - 2112530005 Pham Phuong Anh - 2111530007 Nguyen Hoang Anh - 2114530002 Class : KTEE203K60CLC. Nguyen Minh Thuy Ha Noi, 2021 FOREIGN TRADE UNIVERSITY INSTITUTE OF ECONOMY AND INTERNATIONAL BUSINESS **************** MACROECONOMICS MID-TERM TEST CHINA’S GROWTH IN THE PERIOD 2010-2020 Students: Nguyen Thi Hong Ngoc – Leader - 2112530035 Tran Quoc Viet - 2112530056 Nguyen Minh Anh - 2112530005 Pham Phuong Anh - 2111530007 Nguyen Hoang Anh - 2114530002 Class : KTEE203K60CLC. Nguyen Minh Thuy Ha Noi, 2021 ACKNOWLEDGEMENT. First of all, we would like to give our best regards to Mrs.
Nguyen Minh Thuy for letting us have the opportunities to learn and explore new things about economics. This group task means a lot to us as it helps us understand more about economics, inflation, policies,.as well as get to know more about China. Additionally, we’ve learned many other things such as assigning tasks equally, time-management, researching data, making a slide, and most importantly, getting closer with other friends in the class. This is the first time ever we have been given such a hard task that is written all in English.
We have tried our best and hope that you would be satisfied with our work. Thank you! CONTENTS FOREWORD.1 CHINA GROWTH IN THE PERIOD BETWEEN 2010 AND 2020. Major Trading Partners. Consequences of Economic Development.
Income and cost of living. One-child policy. Social Credit System:. Strengths, Weakness, Risks and Challenge.
Risks and Challenges. 52 LESSONS FOR OUR VIETNAM.55 FOREWORD Everyone knows that China is the world’s most populous county with more than 1.4 Billion residents as of 2021, but beyond demographics, there are a lot more outstanding and coveting aspects of China that some of you might fail to notice. Here come the reasons why we choose China to be the country that we analyze in this essay. China is one of the cradles of the world’s civilizations with written records dating back to more than 4,000 years ago.
Even in the modern era, the country is still immersed in its long- standing culture and heritages. Since ancient times, China has obtained a plethora of achievements in advanced agriculture, metallurgy, ceramics and silk textures, astronomy, science and technology, etc. The Chinese have been the inventors and discoverers of various objects and phenomena, which are still having a huge impact on the entire world and leaving a grand treasure of knowledge for the future generations to make full use of. It was such a shame that in the past, the country's feudal bureaucratic system held back science and inventions from making further progress, and prevented Chinese society from developing modern science; otherwise, many more innovations could have been created.
However, since the People’s Republic of China initiated economic reforms and trade liberalization nearly 40 years ago, the country has entered a new era and focused more on expanding its economy and improving people’s living standards, making it one of the world’s largest and most prosperous nations. Since opening up to foreign trade and investment and implementing free-market reforms in 1979, China has been among the world’s fastest-growing economies, with real annual gross domestic product (GDP) growth averaging 9.5% through 2018, a pace described by the World Bank as “the fastest sustained expansion by a major economy in history.” Such growth has enabled China, on average, to double its GDP every eight years and helped raise an estimated 800 million people out of poverty. China has become the world’s largest economy (on a purchasing power parity basis), manufacturer, merchandise trader, and holder of foreign exchange reserves. This in turn has made China also places a great emphasis on the improvements of infrastructure by launching consecutive projects, which have amounted to 3,485 projects as of 2019.
Nearly half, or 43%, of the projects concern the construction of roads, railways, ports, airports, electrical systems and dams. Another 42% are social infrastructure such as hospitals, schools, and so on. The remainder are projects supporting tourism and agriculture. Investments in infrastructure are increasingly high and have no signs of ceasing.
Rail transport is an important mode of long- distance transportation in China. As of 2020, the country had more than 146,000 km of railways, the second longest network in the world. By the end of 2020, China had just under 38,000 kilometers of high-speed rail (HSR), the longest HSR network in the world. Other China’s aspects such as culture, living standards, education, environment are extremely diverse, perplexing and intriguing at the same time.
As China has a wide range of interesting characteristics and an ever-changing and dynamic economy, we would really like to get an insight into them and explore what has made it so incredible over the last decade. Each aspect is thoroughly analyzed in the following parts and we would occasionally add our or some experts’ comments on that aspect so that everything is crystal clear. Let’s get started! CHINA GROWTH IN THE PERIOD BETWEEN 2010 AND 2020 I. GDP a) The scale of GDP Gross domestic product (GDP) is the total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period.
As a broad measure of overall domestic production, it functions as a comprehensive scorecard of a given country’s economic health. The economy of China developed rapidly from 2010 to 2020. Indeed, the GDP of China in this period grew constantly and dramatically. At 2010, Gross Domestic Product of China was just over 6 trillion U.S dollars, however, 10 years later, it has doubled in 2017 at over 12 trillion U.S dollars and continued to grow and reached its peak in the period in 2020 at 14,723 trillion dollar which is 245% bigger than its figure in 2010.
(Current US$ ) Source : The World Bank GDP – China In The Period 2010-2020 In the whole world, the period of time from 2010 to 2020 which is called a miracle growth of China’s economy has marked an important stage in the history of this country’s economy. From 2010, the GDP of China has passed the GDP of Japan and officially become the second largest economy by GDP just after the US. At the same time, while the GDP of Japan and the UK almost unchanged, that figure of China and the US grew rapidly and even from 2019, while the world economy has been extremely negatively influence due to the outbreak of COVID 10 and even the largest economy in the world – the USA has seen a decrease in GDP, the China’s GDP has still continued to rise steadily. In 2020, The GDP value of China tripled that of the third largest economy by GDP- Japan and represented 18.33 % of the world economy.
Source : The World Bank Top 4 Largest Countries By GDP In The Period 2010-2020 b) The GDP’s compositions of China Economic restructuring of China's economy in the period from 2010 to 2020 was impacted a lot by the rise of technology and 4.0 industrialization and the economy of China has tried to reduce the density of Agriculture and has moved towards industrialization and modernization. From 2010 to 2020, the structure of China’s GDP has changed in the trend of the market economy. They have cut down on the percentage of Agriculture and Industry while constantly impulsing the development of Services. From 2010 to 2019, while the GDP from Agriculture decreased by 3% and the GDP from Industry dropped by 7.72%, the GDP from Services increased dramatically by 10.71% and has become the largest GDP’s contributor since 2012.
Source : Asia Briefing China’s GDP Composition (%) In The Period 2009-2019 c) Reasons Source: Ceicdata China Private Consumption Expenditure (USD) 2010 – 2020 Many factors have led to the enormous GDP of China in the past ten years but there are also some major reasons for this miracle growth. To achieve this success, the Chinese government has spent a huge amount of money on public services including transportation, army, etc. We can see an obvious impressive development and change of China’s infrastructure. In addition, in this period, new companies and start-ups appeared densely and many of them have succeeded to expand and become large corporations which contributed a lot to the national GDP.
China has also made use of technology perfectly and with the enormous labour force, it has become the engine to impulse the scale of production in China. The appearance of the Belt and Road initiative in 2013 also has paved the way for the growth of China’s Net export. Besides, policies that aimed to improve mode of services such as tourism, entertainment also proved to be effective contribution to the whole GDP.com China Government Spending (CYN) 2010-2020 d) GDP Growth Rate In the past ten years, although Chinese GDP constantly increased, the GDP growth rate had a tendency to fall dramatically. This trend was supposed to be mainly caused by the persistent trade war between China and The US.
But the war is not the only factor behind the slowdown. The government’s green industrial policy, tighter regulation of the property sector, and blacklists of online platforms also have collectively curtailed growth. Besides, the pandemic COVID 19 also significantly held back the growth speed of Chinese GDP. From a country with the GDP growth rate always beyond 10% in 30 years before, in the period 2010- 2020, this rate had dropped catastrophically and reached the bottom at 2.3% in 2020 and ranked 16th in the world according to Statista.
Source: The World Bank GDP Growth (%) In China 2010 – 2020 e) GDP per capita From 2010 – 2020, with the rise of GDP, GDP per capita of China also increased substantially by 230% just after 10 years and reached 10500 USD in 2020. However, despite the enormous GDP figure, China is the most populous country in the world with over 1.4 billion people, therefore, GDP per capita of China is still low and below the world average GDP per capita. In 2020, Chinese GDP per capita ranked 53 rd in the world and 8th in Asia according to the global economy. Source: The World Bank GDP Per Capita Of China 2010 – 2020 2.
Inflation Rate Inflation is a common worldwide, complex, comprehensive macroeconomic phenomenon, its definition in economics also did not achieve consensus, now the most popular definition is: Inflation is a process of rising prices, or is a process of continued depreciation of the currency value. Inflation in China is driven by volatile yet persistent changes in food and energy prices, making it difficult for policymakers and investors to gauge the underlying inflation trend. Current and prospective inflation matters a lot to monetary policymakers and market participants. In the case of China, and in most other emerging markets, food and energy account for a heavy weighting and play an important role in inflation dynamics.
Excluding these components may lead to an excess volatility reduction. Source: The World Bank China Inflation Rate From 2010 To 2020 2010 - 2011: Interest rates on savings deposits in China had fallen to about 2. But inflation has risen dramatically in 2010-2011, which means bank depositors are essentially facing a negative interest rate return. The great food crisis in 2011 pushed the price of food to record level.
The price of wheat is all-time high all over the world. The main culprits for this crisis were population growth, rising affluence, and the use of grain to fuel cars. According to government data for big cities, rice was up 38 percent, wheat prices rose 35 percent and beef and fresh milk prices each climbed about 44 percent. The CPI was up 5.