#KYR: China - EconomyBy The Cove July 8, 2021
The 'Know Your Region' series is designed to support unit and individual professional military education on the South East Asian region. It's important for all serving members of our military to have a foundational knowledge of the countries and issues in the Indo-Pacific.
CHINA – ECONOMY
On this page:
- Economy and GDP
- One Belt One Road initiative
- Foreign investment and aid
- Trade with Australia
Since China began to open up and reform its economy in 1978, it has been among the world’s fastest-growing economies, with GDP growth averaging almost 10 percent a year. More than 800 million people have been lifted out of poverty. Prior to reforms, China maintained policies that kept the economy very poor, stagnant, centrally controlled, vastly inefficient, and relatively isolated from the global economy. China’s rapid economic growth exceeded the pace of institutional development and there are important institutional and reform gaps that China needs to address to ensure a high-quality and sustainable growth path. For more information on China’s economy, watch the following videos:
Economy and GDP
China's economy grew a record 18.3% in the first quarter of 2021 compared to the same quarter last year. It's the biggest jump in gross domestic product (GDP) since China started keeping quarterly records in 1992. China has the world’s second largest nominal GDP in current dollars and the largest in terms of Purchasing Power Parity (PPP). With annual growth that consistently outpaces the US, China may be on track to become the largest economy in the world by nominal GDP in the years to come.
For further information on China's Economy and GDP see the resources below:
One Belt One Road Initiative
The ‘One Belt, One Road’ (OBOR) initiative is a Chinese economic and strategic agenda to link Europe to China through countries across Eurasia and the Indian Ocean. The OBOR initiative also links to Africa and Oceania supporters which suggests the initiative permits new infrastructure and economic aid to be provided to needy economies. Critics claim that it may increase China’s economic and strategic influence in the countries along these routes.
For further information on China's OBOR Initiative see the resources below:
Trade has become an increasingly important part of China’s overall economy and it has been a significant tool used for economic modernisation. Most of China’s imports consist of machinery and apparatus (including semiconductors, computers and office machines), chemicals and fuels. China’s top export is broadcasting equipment such as computers, integrated circuits, office machine parts and telephones, exporting mostly to the United States, Hong Kong, Japan, South Korea, and Germany.
For further information on China's Trade see the resources below:
Foreign Investment and Aid
China has been highly successful in mobilising inward Foreign Direct Investment, which has played an important role in China’s economic development and export success. By many accounts, today, China is the world's foremost supplier of foreign aid and foreign investment to developing countries, which is a product of China’s huge growth over the last three decades.
For further information on China's Trade, see the resources below:
Trade with Australia
China is Australia's largest two-way trading partner in goods and services, accounting for 29 per cent of Australia’s trade with the world. Two-way trade reached $251 billion in 2019-20 (up 7 per cent year on year). Australia’s exports to China grew by 9 per cent to reach $168 billion. China remained Australia’s biggest services export market, particularly in education and tourism, while minerals exports (mainly metal ores), have been the mainstay of Australia’s exports to China. There have been recent concerns among Australian producers with China limiting Australian barley, beef, wine, lobsters and coal over the past year; but despite ongoing tensions, Australia’s exports to China reached A$145.2 billion (in 2020, just 2.16 per cent less than the total in 2019).
For further information on China's Trade with Australia see the resources below:
- China-Australia trade war – your questions answered (ABC)
- Chinese Foreign Ministry Spokesperson’s remarks on offer to acquire Australian-based construction giant Probuild
- China Australia Free Trade Agreement (ChAFTA)
- Graphic: Australia’s exports and imports of goods and services by top 15 trading partners and main article
- Australia’s trade in goods with China in 2020
- Australia’s exports booming despite trade restriction from China
- China has maintained aggressive economic policies and growth which saw it bring over three quarters of a billion people out of poverty. What economic actions will China need to take to maintain this new standard of living for its population, and how will that influence its global relationships?
- As China rapidly closes the economic gap between itself and the US, what will the international reaction likely be should China gain economic parity with the world’s current superpower? What should Australia’s economic policies focus on should this happen?
- The One Belt One Road Initiative is China’s major foreign policy endeavour. Considering that most of this is focused on developing countries, many that lie within our region, should Australia embrace this initiative? Why?
- China will remain a significant exporter of technological goods heavily in demand by western consumers. Does this undermine our sovereign manufacturing capability, or does it present an opportunity for greater trade and economic investment for locally produced resources which enable the manufacturing of these goods?