Background Information about the People's Republic of China
24 Jun 2009
| Official name: | People's Republic of China |
| Population: | 1,306,313,812 (July 2005 est.) |
| Population growth: | 5.1% (2004) |
| Land area Total: | 9,596,960 sq km |
| (land: 9,326,410 sq km; water: 270,550 sq km) | |
| Currency: | Renminbi (RMB)/Yuan |
| GDP: | $7.043 trillion (2007 est.) |
| GDP growth: | 11.4% (2007) |
| GDP per capita | $5,300 (2007 est.) |
| Higher education students: | 11 million (till 2007) |
| Higher education institutions: | 1,900 (till 2007) |
| Main fields of study: | Engineering, Literature, Management, Science |
Population and Size
China, officially the People's Republic of China (PRC), has the third largest land area of any country on earth. It’s also the most populous country in the world. Its population reaches a total of 1,306,313,812 (July 2005 est.).
Population distribution is very uneven. In some mountainous areas for example there can be fewer than 10 people per sq. Km, yet in larger cities population density might reach over 400 people/sq Km. Most people still live on the countryside, around 70 percent, and although Chinese traditionally value a male heir, there are only slightly more men than women in China, 50,8% against 49,2%.
The one-child policy and definitely the higher average level of education have contributed to a decrease in the population growth rate.
Party and religion
The Communist Party of China ("CPC") is the country's sole political party in power. Founded in July 1921, the CPC today has more than 67 million members.
China officially remains an atheistic country. The constitution of 1978 stipulates religious freedom, yet also includes a number of restrictions. Basically the state tolerated religious groups, as long as they do not challenge the state, such as the Falun Gong did.
Chinese Economy
China's economy has boomed since 1978, as a result of sweeping economic reforms. It’s grown to the extent that some Chinese companies now have the money and power to start corporate shopping, taking over corporations. This is a clever trick of the Chinese, because otherwise they have to establish a brand name all by themselves. Who in the West has heard of Naning Automobiles before they took over Rover? Who has heard of Lenovo Electronics, before they took over IBM’s PC devision? Although Haier later withdrew, they had made a bid to take over Maytag. China Minmetals has been involved into a multibillion dollar deal to take over the Canadian copper and Zinc miner Noranda. More and more companies seem to have emerged out of nowhere, even though they might already have established a brand name within China or even within Asia.
GDP
Between 2001 and 2005 the GDP has grown impressively by 67%. The GDP per capita has also grown a lot, making the real growth rate 9,9% in 2005.
Economic Structure
The manufacturing and tertiary sectors are becoming the driving force behind China's economic growth, compared with the dominant role of primary and manufacturing industries in the past. The rising tertiary industry is the new fast-growing section of the economy and is playing a leading role in creating jobs.
Foreign Trade and investment
Foreign Trade[1]
In 2006, China's external trade reached US $1,761 billion, ranked the third in the global economy. In 2007, exports grew by 25.7% while imports increased by 20.8%, resulting in a trade surplus of US $262.2 billion.
Export-processing trade continued to be the major form of external trade. In 2006, exports and imports related to processing trade grew at 22.6% and 17.4% respectively. Export-processing trade accounted for 52.7% of China's total exports in 2006 and dropped slightly to 51% in 2007. In 2007, exports and imports related to processing trade grew at 21% and 14.6% respectively.
In 2007, exports of machinery, electrical and electronic products grew rapidly at 27.7%, while other light consumer goods also showed impressive performance, for example, exports of garment grew by 23.1%, footwear up 16%. In January 2008, exports of machinery, electrical and electronic products grew by 23.2% while garments and footwear increased by 23% and 16.3% respectively.
In 2006, China's top ten trading partners were the US, Japan, Hong Kong, South Korea, Taiwan region, Germany, Russia, Singapore, Malaysia and the Netherlands. China's trade with these ten economies together amounted to US $1,303 billion, i.e. 60% of China's total external trade in 2007.
Foreign Investment[2]
In 2006, exports of foreign-invested enterprises (FIEs) increased by 26.9% while imports grew by 22%. In 2007, FIEs' exports increased by 23.4%, accounting for 57.1% of China's total exports, and imports increased by 18.4%, representing 58.5% of China's total imports.
In 2007, the number of newly approved foreign-invested projects (non-financial sectors) declined by 8.7% to 37,871, while utilized foreign direct investment increased by 13.6% to US $74.8 billion. By the end of 2007, China approved a cumulative of 632,286 foreign investment projects, with actual utilized overseas FDI amounting to US $760 billion. The leading sources of investment included Hong Kong, Japan, the US, Taiwan, Singapore and South Korea.
By the end of 2006, the cumulative FDI made by Chinese enterprises (non-financial sectors) in overseas markets amounted to US $75 billion. In 2006, the amount of FDI made by Chinese enterprises was US $17.6 billion, an increase of 43.8%. Hong Kong is the largest recipient of capital from Chinese enterprises, accounting for 56.3% of the total outward FDI up to 2006. Business services (mainly investment holdings), wholesale and retail, mining and manufacturing are the leading sectors (non-financial sectors) of China's outward FDI.
[1] Hong Kong Trade Development Council, Market Profile on Chinese Mainland, (2008), www.tdctrade.com/main/china.htm#3
[2] Hong Kong Trade Development Council, Market Profile on Chinese Mainland (2008), www.tdctrade.com/main/china.htm#3
Existing problems
Main problems that existed in the economic and social development included: slow growth of farmers’ income; heavy pressure for employment and social security; tight relation between the supply and demand of energy and transportation; large size of investment in fixed assets, blind investment and repeated low-quality expansion in some industries; big income gap between selected groups of population; relatively difficult life of low-incomers; increasing pressure on resources and environment, etc.
Sino-Dutch trade relations
Small as it is, Holland is one of China's most important trading and investment partner. Sino Dutch relations have had a long history and tradition.
After a series of failed attempts to build a settlement and trading post in Fujian in the early 17th century, the VOC (United East-Indian Company) succeeded in building a successful colony in Tainan, a city in the south of Taiwan. Apart from the occasional foray the Dutch didn't really set foot on the mainland. In the early 1800s the Dutch organised a delgation to pay tribute to the Qing emperor in Beijing. At that time, the only legitimate way to trade was along the route to pay tribute to the emperor in Beijing. After the first mission, the Dutch were allowed to come to China and pay tribute once every eight years. Of course, this was not as lucrative an arrangement as the Dutch would have wished for. However, after the Dutch were granted permission to build a factory in Canton in 1728 and import porcelain to Europe, trade relations improved a lot. The Dutch also bought silk in China and traded it in Japan for gold and copper.
After this period Sino-Dutch trade relations improved and we now enjoy a mutually beneficial relationship. “Sino-Dutch relations have maintained an excellent momentum in recent years” as premier Wen Jiabao told the press after meeting Dutch PM Jan Peter Balkenende in April this year. Chinese-Dutch ties are good, which is being reflected in the fact that the Netherlands are China’s third largest trade partner within the EU. The bilateral trade volume jumped 44,3 per cent last year. 7,48 billion US$ has been invested by Dutch enterprises into 824 projects in China. As a newborn saying goes: “Dutch people are the Chinese in Europe and Chinese are the Dutch in Asia”: both are doing good in business, and doing good in business with each other.
It's not just large companies like Philips, Shell Akzo-Nobel and Heineken, that prosper in China. Of our small and medium sized enterprises that operate internationally, 15% are already trading with China while another 40% are considering the possibilities. There are over a hundred Dutch companies in Shanghai alone, reflecting the increasing interest in China. And this interest is only set to grow. In February this year, a trade mission led by the vice-minister of Economic Affairs visited China. The original group of 35 companies had to be expanded to 65 to accomodate all those that were interested in the trip.