CHINA – ECONOMY

On this page:

• Summary
• Economy and GDP
• One Belt One Road initiative
• Trade
• Foreign investment and aid
• Trade with Australia

Summary

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 9 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 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:

• Videos
  1. China’s economy expands record 18.3% in Q1 2021
  2. How will China achieve a higher than 6% economic growth in 2021?
  3. China to become the world’s biggest economy by 2028
  4. China’s economy and Coronavirus
• Podcasts
  1. Is China’s economy as strong as it lets on?
  2. 2020 China economic review and 2021 outlook
  3. China 2021: The consumer roars back
• Articles
  1. China’s Economic Governance - Infographic
  2. Will the Five Eyes stare down China’s economic coercion?
  3. UN Development Programme: China in Numbers
  4. The World Bank in China

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:

• Videos
  1. The Economics of China’s Belt and Road Initiative
  2. The State Council Information Office – PRC: Belt and Road
  3. China’s Belt and Road initiative explained
  4. Belt and Road agreement China/Victoria among deals dashed by Canberra
• Podcasts
  1. Australia and the Belt and Road initiative
  2. The impact of COVID-19 on China’s Belt and Road initiative
  3. China’s grand strategy and the Belt and Road Initiative
• Articles
  1. Understanding China’s Belt and Road Initiative
  2. Competing with China’s digital silk road
  3. China’s Belt and Road Initiative – who’s in and who’s out
  4. The continuing mystery of the Belt and Road
  5. What is China’s Belt and Road initiative and what were the four deals the Federal government tore up?

Trade

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:

• Videos
  1. How China is using automation to reshape its economy
  2. Why Chinese manufacturing wins
  3. China’s GDP hits record growth
  4. Why are Chinese imports and exports surging?
• Podcasts
  1. Chinese perspectives on trade and economic tension with the US
  2. The impact of China’s dominant position in Global supply chains
• Articles
  1. China: The rise of a trade titan
  2. China’s Top 10 Imports
  3. China’s Top 10 Exports

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:

• Videos
  1. The Heat: China’s foreign investment model Pt 1
  2. The Heat: China’s foreign investment model Pt 2
• Podcasts
  1. Renting influence: China in the Pacific
  2. Chinese investment: Beyond the USA
• Articles
  1. How China Lends
  2. China, Debt, Climate and Nature – interactive graphic
  3. LOWY Institute – Chinese Foreign Aid
  4. China received more foreign investment last year than the US

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 $326.9 billion in 2023 (up 9.2 per cent on the previous year). Australia’s exports to China grew by 18.2 per cent to reach $219 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 have continued to grow.

For further information on China's Trade with Australia see the resources below:

• Videos
  1. Australia’s growing trade tensions with China
  2. The challenge facing China’s economy and what it means for Australia
  3. Why are Chinese imports and exports surging?
• Podcasts
  1. Behind the scenes of ChAFTA negotiations (2018)
  2. China’s coercive trade measures toward Australia
• Articles
  1. China-Australia trade war – your questions answered (ABC)
  2. Chinese Foreign Ministry Spokesperson’s remarks on offer to acquire Australian-based construction giant Probuild
  3. China Australia Free Trade Agreement (ChAFTA)
  4. Australia’s trade in goods with China in 2020
  5. Australia’s exports booming despite trade restriction from China

Discussion Questions

1. 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?
2. 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?
3. 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?
4. 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?

Last Reviewed 09/2024