Developing Economic About China

China economy analysis


China has one of the fastest growing economies in the world. It emerges as a major global economic power with the largest purchasing power parity, manufacturing, and foreign exchange reserves. The Chinese government has played a significant role in boosting the economic growth. For instance, when the global economic crisis began in 2008, it affected the economy in terms of exports, imports, and foreign direct investments. As a result, the growth of GDP was halted and the majority of Chinese employees lost their jobs.  However, the government responded promptly by implementing a $586 billion economic stimulus package. It also loosened monetary policies to increase lending power of the banks. On the other hand, the developing economy in China can be explored in relation to GDP growth, population, education, and income per capital.

Chinese Population

When ranked against other countries, the population in China has the highest rank at 20% of the sum of the world’s population. According to the report by the National Bureau of Statistics of China, the total population in China was recorded at 1367.8 million people in 2014 (Crabbe 165). The report shows that the population growth has increased at 148% during a period of 50 years (Crabbe 165). In 1950, the Chinese population was recorded at 552.0 million people (Crabbe 165). In addition, the population density in China is estimated to be 145 people per kilometer squared, and 54% of the Chinese population lives in cities (Crabbe 165). On the other hand, due to the rapid increase of population, the Chinese government has pursued policies that aim at slowing down the population growth. However, the policy seems to create more problems than solutions (Zicheng 65). For instance, a two-child policy is likely to undermine the economic success in China. Practically, some couples cannot bear children and others lose their babies at birth. Some couples also decide to have only one child or none. Therefore, achieving an average of two births per woman is not possible. The policy can only work when some women have more than two children in order to balance for those who have few or none (Crabbe 168).

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Gross Domestic Product Growth in China

In the third quarter of 2015, the economy for China grew at annual rate of 6.9% slightly above the market expectations and this growth allowed China to be termed as upper middle-income economy (Crabbe 169). Secondly, when the growth in GDP was measured during the first quarter of 2009, it showed a significantly low growth rate due to the reduction in overall investments and industrial productivity (Zicheng 75). Furthermore, the annual growth rate in China’s GDP has an average of 10.88% between 1989 and 2015 (Zicheng 75). On the other hand, the Gross Domestic Product for China is divided into three sectors: primary, secondary, and tertiary. First, activities such as agriculture, forestry, and fishing are classified under the primary sector. The economic performance in the primary sector contributes up to 9% of China’s Gross Domestic Product (Crabbe 169). The significant percentage of the GDP is derived from the secondary sector. These include the productivity of industrial and construction activities (Crabbe 169). Additionally, there are economic outputs that are classified under tertiary sector.  They include production in areas such as wholesale and retail trade, transport, financial services, real estate, and hospitality industries (Zicheng 105).

Over the period of three decades of economic reforms, that is from 1978 to 2008, the economic growth in China has been remarkable when compared to other countries. For instance, the annual growth of output per capita was on average of 8.7% (Zicheng 120). As such, the effect on levels of poverty was dramatic. It should be emphasized that over 250 million people were elevated out of dollar-a-day poverty (Zicheng 123). When compared with other selected countries over the period since 1980, China has achieved a consistent high output growth of over 10% per year in each of the three decades (Zicheng 125). Other economies such as the United States, Japan, and the United Kingdom grew at a modest pace that did not exceed 4% on average (Zicheng 125).

Education in China

On a further note, China has a unique education system. To improve the performance of the education system, the government has invested into this sector. It has also enacted education laws with similar goals. For example, in 1986 an education law was passed by the Chinese government. Significantly, the law made it mandatory for all children in China to be enrolled to acquire universal education for a period of nine years (Ryan 10). As a result, the significant number of the Chinese population has achieved the universal nine-year basic education according to the reports by the Ministry of Education. After, completing the nine-year period of mandatory education, the students will be enrolled for mainstream and vocational education (Zicheng 33). Furthermore, the education institutions in China offer learning opportunities for students from other parts of the world. The quality of education in China also improves through a major curriculum reform (Crabbe 172). On one hand, the regular education system is composed of senior secondary schools, mainstream college undergraduate education, and institutions of higher education. On the other hand, vocational education is provided by specialized schools, technical secondary schools, and schools for juvenile delinquents (Ryan 15).

However, despite the education reforms, it is estimated that there is an unemployment rate of 7.5% for university graduates (Ryan 22). The government has not been able to surpass the target of creating 10 million employment opportunities in 2015 (Ryan 28). Therefore, the ratio measuring the job vacancies to job seekers indicates that the demand exceeds the supply. The National Bureau of Statistics suggests that there is a mismatch of skills in the labor markets particularly for technicians and engineers. The statistics creates a notion that the situation is not likely to change in the near future. It should be noted that the education system in China struggles to match the demand for vocationally trained professionals as well as adequately educated professional staff (Zicheng 121).

Income per Capital in China

Among the urban residents in China, per capita disposable income reached 28,844 Yuan in 2014 (Crabbe 145). However, in cities such as Shanghai and Beijing, the figure was much higher. Additionally, the statistics show that the starting monthly salaries for college students in these residents were high more than in other provinces in China. In addition, in China, the gross national savings as a percentage of GDP was 54.3% in 2008 (Crabbe 150). In this light, a key feature of the Chinese saving rate is that the household, corporate, and government sectors contribute to the rise in gross national savings. For example, as a share of Gross Domestic Product, the corporate savings in China is the best when compared to rivals such as Japan (Zicheng 65).

On a further note, there has been an uneven growth of income for the Chinese living in rural areas. For instance, from 1997 to 2002, the per capita net income of rural residents fluctuated around 1000 Chinese Yuan (Zicheng 88). The fluctuations were influenced by the external factors such as natural calamities and unfavorable climate. On the contrary, the growth rate of per capita disposable income of urban residents was relatively steady (Crabbe 169). A further analysis on sources of income shows that most of the rural populations in China have a single source of income, and they are family-owned businesses mostly. For the urban residents, there are more sources of capital, including state-owned employment and collective units (Crabbe 171).


In conclusion, the economic situation in China can be explored in relation to population, education, income per capita, and gross domestic product. For one, China has the highest population in the world with a record of 1367.8 million people in 2014. When estimated in terms of percentage, the Chinese accounts for 20% of the world’s population. Similarly, the education system in China is also the largest one as compared with other parts of the world. Most Chinese are literate as the consequence of passing the law that made it compulsory for children to be enrolled for the nine-year education period. The education system in China also offers learning opportunities for students from other parts of the world. However, the system has its challenges. According to the statistics from the National Bureau of Statistic, the students graduate without skills that are required on the labor market. Notably, the engineering and technical markets are affected by the mismatch of academic and practical skills most of all. Another focus on the Gross Domestic Product indicates that China’s economy grows significantly. On this note, the activities in the primary, secondary, and tertiary sectors contribute to the economic growth with different percentages of GDP. On the contrary, there are significant differences in income per capita between the urban and rural populations in China. The urban residents have access to more sources of capital, and therefore, they have higher incomes than their counterparts in the rural parts of the country.

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