Chinese Business Demography And Social Indicators

DEMOGRAPHY AND SOCIAL INDICATORS

DEMOGRAPHY AND SOCIAL INDICATORS
China is the most populous country in the world with number of people crossing 1.298 billion in 2004. Data obtained from the World Bank shows a national growth rate of 0.8% during 1997-2003. China has adopted measures to curb its mounting population from exceeding at an alarming rate, as its growth rate is less than that of the world’s as a whole. The density of population in People’s Republic of China is approx. 136 persons per sq. km while, Taiwan has a higher population density of 636 per sq km. Most of the people live in rural areas as only 39% of the people were living in urban areas during the preceding 10 years. Life expectancy at birth in China is still higher than most developing nations. Many people are estimated to have lived up to 71 years. Gross primary enrollment, which denotes the percent of school-age population, is 114 with both male and female enrolled equitably. Adult Literacy rate is 91%. However, China is ranked very low in Human Development index having a rank of 94 in 177 countries of the world, in UNDP 2004 Report.

KEY ECONOMIC INDICATORS

Although China is still among the developing countries with a relatively low per capita income, it has experienced tremendous economic growth since the late 1970s. After stagnating for two decades under the rigid authoritarianism of early communist rule, China now has the world’s fastest-growing economy. In a recent report of Asian Development Bank, China’s growth rate for the coming 2-3 years is predicted to be 8.5 % and above.

China’s Gross National income according to World bank sources, was 1411.6 US $ billion in 2003 and the per capita income was US $ 1110 in the same year.

STRUCUTURE OF THE ECONOMY

Beginning in the late 1978, china has been moving to a more market oriented economy. China decollectivized agriculture, yielding tremendous gains in production. Driven by a sharp rise in the procurement price paid for crops and what amounted to the semi-privatisation of agriculture, the share of agricultural output in total GDP rose from 30% in 1980 to 33% three years later. However, after that the share of agriculture has fallen fairly steadily, and by 2002 it accounted for only 15.4% of GDP. Thus , even with these improvements, agriculture accounts for only 20% of the nation’s gross national product.

The structural changes gave increased authority of local officials and plant managers in the industry, permitted a wide variety of small-scale enterprises in service and light manufacturing. Due to its increasing openness to foreign trade and investment, in 1999, China became the second largest economy of the world after the USA, in terms of GDP.

At present, more than half of the population depends on agriculture for living. However agriculture’s contribution to GDP has remained low.

Significantly large share of industrial production in GDP, characterized the Chinese economy, much before the start of economic reforms there. In 1978, industry accounted for 50% of officially measured GDP. This was particularly striking because so much of the workforce remained on the land. The relative share of the services sector has since remained steady ( 33% in 2003), and the continued shrinkage in the relative contribution of agriculture has been reflected in a larger share for the industrial sector, which in 2003 accounted for around 52.3% of GDP.

Most of the agricultural production is restricted in the east. China is the world’s largest producer of rice and wheat, among cash crops, China ranks first in cotton and tobacco and is an important producer of oilseeds, silk, tea, ramie, jute, hemp, sugarcane, and sugar beets.

China ranks first in world production of red meat (including beef, veal, mutton, lamb, and pork). Due to improved technology, the fishing industry has grown considerably since the late 1970s.

Apart from crops and food products, China is one of the world’s major mineral-producing countries. Coal is the most abundant mineral (China ranks first in coal production). There are also extensive iron-ore deposits; the largest mines are at Anshan and Benxi, in Liaoning province. Oil fields discovered in the 1960s and after made China a net exporter, and by the early 1990s, China was the world’s fifth-ranked oil producer. Growing domestic demand beginning in the mid-1990s, however, has forced the nation to import increasing quantities of petroleum.

Coal is the single most important energy source; coal-fired thermal electric generators provide over 70% of the country’s electric power. China also has extensive hydroelectric energy potential.

Major industrial products are textiles, chemicals, fertilizers, machinery (especially for agriculture), processed foods, iron and steel, building materials, plastics, toys, and electronics.

ROLE OF STATE vs MARKET

Until 1978, industrial output was dominated by large state-owned enterprises (SOEs). Gradually, the share of state-owned and state-holding enterprises in gross industrial output value had shrunk; in 2002 it was around 41%. However, state-owned companies, controlled by economic ministries in Beijing (Capital of China), represented only 16% of industrial output. State-holding enterprises may control large numbers of state firms, and are not 100% state-owned.

The changes in economic policy, including decentralization of control and the creation of “special economic zones” to attract foreign investment, led to considerable industrial growth, especially in light industries that produce consumer goods.

FOREIGN TRADE

As part of its continuing effort to become competitive in the global marketplace, China joined the World Trade Organization in 2001; its major trade partners are the United States, Japan, South Korea, Taiwan, and Germany. China’s entry into the WTO has benefited coastal cities, especially in the southeast. Although a British crown colony until its return to Chinese control in 1997, Hong Kong has long been a major maritime outlet of S China.

China’s major industrial products are china’s main exports also. Share of manufactured goods, including textiles, garments, electronics and arms are highest in Chinese exports. China’s leading export minerals are tungsten, antimony, tin, magnesium, molybdenum, mercury, manganese, barite, and salt. China is among the world’s four top producers of antimony, magnesium, tin, tungsten, and zinc, and ranks second (after the United States) in the production of salt, sixth in gold. China is one of world’s largest producers of aluminum.

CHALLENGES FACING CHINA

China’s challenge in the early 21st century will be to balance its highly centralized political system with an increasingly decentralized economic system.

Also, China’s economy, though strengthened by the more liberal economic policies of the 1980s and 90s, continues to suffer from inadequate transportation, communication, and energy resources. However, since the 1980s, China has undertaken a major highway construction program and China is working hard on building up a world-class infrastructure. China’s poor human development index highlights the economic disparity between urban China and the rural hinterlands. Human rights campaigners continue to criticize China for executing hundreds of people every year and for failing to stop torture.

Other critical problems include corruption, which affects every level of society, and the growing rate of HIV infection. Another long-term threat to continued rapid economic growth is the deterioration in the environment, notably air pollution, soil erosion and steady fall of water table in the north. Tensions between a highly centralized political and an increasingly de-centralized economic system is also a cause of worry.