China Economy Overview - beyondsummits.com€¦ · • Due to the increasingly fierce international competition for attracting foreign investment and the downturn in the domestic

1

China Economy Overview

2

Summary：

• As the country with the largest population in the world, China has a total population of 1.38

billion in 2016, an increase of 5.88 ‰ compared with 2015 and it is estimated that it will reach

or exceed 1.4 billion in the next few years. Although the liberation of the “two-child“ policy will

lead to a slight increase in China’s population in a few years, the structure change in the labor

force caused by population aging will further drag down the pace of China's economic

development.

• Economically, although China has become the world's second-largest economy, its GDP

growth rate further declined in 2016, and the overall economic situation in China will not be

optimistic. In terms of industrial structure, the proportion of service industries continued to

increase, and some products with high value-added and high-tech content also increased

rapidly. In the next few years, supply-side structural reforms, especially cutting overcapacity,

reducing excess inventory, deleveraging, lowering costs, and strengthening areas of weakness

are still important measures for China's structural optimization.

© 2016 Beyond Summits© 2017 Beyond Summits

3

Summary：

• China has gradually entered an aging with the proportion of people over the age of 65 in 2016

climbing to 10.8%. It is estimated that in the coming decades, this aging phenomenon may

bring China to a more severe condition.

• In 2016, Chinese resident income growth was overall faster than the economic growth. Annual

national per-capita disposable income was 23,821 yuan, an increase of 8.4% over the previous

year and faster than the GDP growth rate.

• In 2016, China's foreign trade import and export volume both declined, which was one of the

factors of China's economic decline.

© 2017 Beyond Summits

4

Summary：

• The market has been developing steadily. In 2016, the number of newly registered enterprises

in China remained at a high level, with stable and orderly market order.

• Due to the increasingly fierce international competition for attracting foreign investment and the

downturn in the domestic economy, the amount of China's foreign investment in 2016 dropped

slightly to US $ 126 billion.

• In 2016, the amount of China's Outward Foreign Direct Investment (OFDI) increased by 43.5%

to reach US $ 183 billion. China surpassed Japan for the first time to become the second

largest global investor after the United States, up 3 places compared to 2015. With the

construction of the Belt and Road and the promotion of international capacity cooperation,

China's outward foreign direct investment is expected to remain at a relatively high level.

• In 2016, under the strong appreciation of the U.S. dollar and the expected impact of rate hike

by the Federal Reserve, the exchange rate of the RMB against the U.S. dollar devalued, with

an annual average of 6.64.


5

China：Country with the largest population

The world’s second largest economy

A population of over

1.3 billion

56 ethnic groups

90% is Han group

Over 80 dialects

Over 70% population

speak Mandarin


6

Shanghai

Chongqing

Tianjin

Guangxi

4 Municipalities

5 Autonomous Regions

23 Provinces

(including Taiwan)

2 Special Administrative Regions

661 Cities

Hong KongMacau

BeijingXinjiang

Inner Mongolia

Tibet

Ningxia

*Mainland China: Excluding Hong Kong,

Macau & Taiwan

Taiwan


7

Tianjin

Hangzhou

Qingdao

Nanjing

Jinan

Chongqing

Chengdu

Xi’an

Beijing

Shanghai

Guangzhou

Shenzhen

Shenyang

Harbin

Wuhan

Dalian

Super cities:Beijing

Shanghai

Guangzhou

Shenzhen

1st tier cities:Tianjin

Shenyang

Dalian

Harbin

Jinan

Qingdao

Nanjing

Hangzhou

Wuhan

Chongqing

Chengdu

Xi’an


8

2nd tier cities:

Shijiazhuang Changchun

Hohhot Taiyuan

Zhengzhou Hefei

Wuxi Suzhou

Ningbo Fuzhou

Xiamen Nanchang

Changsha Shantou

Zhuhai Haikou

Sanya Nanning

Guiyang Kunming

Lhasa Lanzhou

Xining Yinchuan

Urumchi

Hefei

Taiyuan

Zhengzhou

Ningbo

Xiamen

Changchun

Shijiazhuang

Hohhot

Wuxi

Suzhou

FuzhouNanchang

Changsha

ShantouZhuhai

Haikou

Sanya

Nanning

GuiyangKunming

Lasa

LanzhouXining

Yinchuan

Urumchi


9

Source：National Bureau of Statistics of the People’s Republic of China

In 2016, the population in China showed a trend of continuous growth. The population birth rate

and natural growth rate have picked up, which is mainly due to the overall liberalization of the "two

child" policy.

1.27 1.28 1.28 1.29 1.30 1.31 1.31 1.32 1.33 1.33 1.34 1.35 1.35 1.36 1.37 1.37 1.38

14.0313.38

12.8612.41 12.29 12.40

12.09 12.10 12.14 11.95 11.90 11.93 12.10 12.0812.37

12.07

12.95

7.586.95

6.456.01 5.87 5.89

5.28 5.17 5.08 4.87 4.79 4.79 4.95 4.925.21 4.96

5.86

4

6

8

10

12

14

1.20

1.25

1.30

1.35

1.40

1.45

1.50

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

China’s Population Trend

Total Population(Billion) Birth Rate(‰) Natural Growth Rate(‰)


10


51.6% 51.5% 51.5% 51.5% 51.5% 51.5% 51.5% 51.5% 51.5% 51.4% 51.3% 51.3% 51.3% 51.2% 51.2% 51.2% 51.2%

48.4% 48.5% 48.5% 48.5% 48.5% 48.5% 48.5% 48.5% 48.5% 48.6% 48.7% 48.7% 48.7% 48.8% 48.8% 48.8% 48.8%

1.27 1.28

1.28 1.29

1.30 1.31

1.31 1.32

1.33 1.33

1.34 1.35

1.35 1.36

1.37 1.37

1.38

1.20

1.25

1.30

1.35

1.40

0%

20%

40%

60%

80%

100%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

China’s Gender Ratio

Male Female Total Population(Billion)

In recent years, the gender ratio in China has been relatively stable and has been in a situation

where there are slightly more men than women.


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36.2% 37.7% 39.1% 40.5% 41.8% 43.0% 44.3% 45.9% 47.0% 48.3% 49.9% 51.3% 52.6% 53.7% 54.8% 56.1% 57.4%

63.8% 62.3% 60.9% 59.5% 58.2% 57.0% 55.7% 54.1% 53.0% 51.7% 50.1% 48.7% 47.4% 46.3% 45.2% 43.9% 42.7%

1.27 1.28

1.28 1.29

1.30 1.31

1.31 1.32

1.33 1.33

1.34 1.35

1.35 1.36

1.37 1.37

1.38

1.20

1.25

1.30

1.35

1.40

0%

20%

40%

60%

80%

100%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

China’s Urban and Rural Population Structure

Urban Population Rural Population Total Population(Billion)

Since 2000, China has strived to transform to modernization and urbanization. By 2016, the

proportion of urban population reached 57.4%.



12


22.9% 22.5% 22.4% 22.1% 21.5% 20.3% 19.8% 19.4% 19.0% 18.5% 16.6% 16.5% 16.5% 16.4% 16.5% 16.5% 16.6%

70.1% 70.4% 70.3% 70.4% 70.9% 72.0% 72.3% 72.5% 72.7% 73.0% 74.5% 74.4% 74.1% 73.9% 73.4% 73.0% 72.6%

7.0% 7.1% 7.3% 7.5% 7.6% 7.7% 7.9% 8.1% 8.3% 8.5% 8.9% 9.1% 9.4% 9.7% 10.1% 10.5% 10.8%

1.27 1.28

1.28 1.29

1.30 1.31

1.31 1.32

1.33 1.33

1.34 1.35

1.35 1.36

1.37 1.37

1.38

1.20

1.25

1.30

1.35

1.40

0%

20%

40%

60%

80%

100%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

China’s Age Structure

0-14 Years Old 15-64 Years Old Over 65 Years Old(including 65) Total Population(Biliion)

Since 2000, the declining birth rate and the extension in the life expectancy of people have also

led to the aging phenomenon in China. The number of people over the age of 65 has accounted

for more than one-tenth of the total population, and this proportion is constantly on the rise.


13

Source：National Bureau of Statistics of the People’s Republic of China Note：Accounting method was adjusted in July 2016

Over the past few years, global economy continued to move downward. The situation is the same

in China, whose GDP growth rate has gradually dropped year by year in recent 5 years.

10,028 11,086 12,172 13,742 16,184

18,732 21,944

27,023 31,952

34,908

41,303

48,930 54,037

59,524 64,397

68,905

74,413

8.5 8.3 9.1

10.0 10.1

11.4

12.7

14.2

9.7 9.4

10.6

9.5 7.9 7.8

7.3 6.9 6.7

0

2

4

6

8

10

12

14

16

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

China’s GDP and Growth Rate

GDP(Billion RMB) Growth Rate(%)


14

7,942 8,717 9,506 10,666 12,487

14,368 16,738

20,505 24,121

26,222

30,876

36,403 40,007

43,852 47,203

49,992

53,980

7.6 7.6 8.4

9.4 9.5

10.7

12.1

13.6

9.1 8.9

10.1

9.0 7.3 7.2 6.8 6.4 6.1

0

2

4

6

8

10

12

14

16

0

10,000

20,000

30,000

40,000

50,000

60,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

China’s Per-capita GDP and Growth Rate

Per-capita GDP(RMB) Growth Rate(%)


In recent years, China's per capita GDP growth rate continued to decline, and is lower than the

national GDP growth. Therefore, the change and adjustment of the demographic structure have a

tremendous impact on the entire Chinese economy and the gross national product (GNP).


15

Source：National Bureau of Statistics of the People's Republic of China

14.7% 14.0% 13.3% 12.3% 12.9% 11.6% 10.6% 10.3% 10.3% 9.8% 9.5% 9.4% 9.4% 9.3% 9.1% 8.9% 8.6%

45.5% 44.8% 44.5% 45.6% 45.9% 47.0% 47.6% 46.9% 46.9% 45.9% 46.4% 46.4% 45.3% 44.0% 43.1% 40.9% 39.8%

39.8% 41.2% 42.2% 42.0% 41.2% 41.3% 41.8% 42.8% 44.3% 44.1% 44.2% 45.3% 46.7% 47.8% 50.2% 51.6%

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

0%

20%

40%

60%

80%

100%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

China’s GDP structure

Primary Industry Secondary Industry Tertiary Industry Gross Domestic Product（Billion RMB）

In 2016, the share of service industries in China's GDP continued to rise, reaching more than half,

which marked that the level of China's economic and social development has reached a new stage,

and indicated that the industrial structure and consumption structure of China have been upgraded

to a new level.

42.9%


16

Source：Local Government’s Report and Bureau of Statistics


2016 GDP Rank 2016 GDP (billion Yuan) 2016 GDP Growth 2015 GDP Rank 2015 GDP (billion Yuan)

1 Guangdong 7951.2 7.5% Guangdong 7281.3

2 Jiangsu 7608.6 7.8% Jiangsu 7011.6

3 Shandong 6700.8 7.6% Shandong 6300.2

4 Zhejiang 4648.5 7.5% Zhejiang 4288.6

5 Henan 4016.0 8.1% Henan 3700.2

6 Sichuan 3268.1 7.7% Sichuan 3005.3

7 Hubei 3229.8 8.1% Hebei 2980.6

8 Hebei 3182.8 6.8% Hubei 2955.0

9 Hunan 3124.5 7.9% Hunan 2890.2

10 Fujian 2851.9 8.4% Liaoning 2866.9

11 Shanghai 2746.5 6.8% Fujian 2598.0

12 Beijing 2489.9 6.7% Shanghai 2512.3

13 Anhui 2411.8 8.7% Beijing 2301.5

14 Shaanxi 1916.5 7.6% Anhui 2200.6

15 Inner Mongolia 1863.3 7.2% Shaanxi 1802.2

16 Jiangxi 1836.4 9.0% Inner Mongolia 1783.2

17 Guangxi Autonomous Region 1824.5 7.3% Guangxi Autonomous Region 1680.3

18 Tianjin 1788.5 9.0% Jiangxi 1672.4

19 Chongqing 1755.9 10.7% Tianjin 1653.8

20 Yunnan 1487.0 8.7% Chongqing 1571.7

21 Guizhou 1173.4 10.5% Heilongjiang 1508.4

22 Xinjiang Autonomous Region 955.0 7.6% Jilin 1406.3

23 Gansu 715.2 7.6% Yunnan 1361.9

24 Hainan 404.5 7.5% Shanxi 1276.6

25 Ningxia Autonomous Region 315.0 8.1% Guizhou 1050.3

26 Qinghai 257.2 8.0% Xinjiang Autonomous Region 932.5

27 Tibet Autonomous Region 114.8 11.5% Gansu 679.0

28 Shanxi Unpublished 4.5% Hainan 370.3

29 Liaoning Unpublished Unpublished Ningxia Autonomous Region 291.2

30 Jilin Unpublished 6.9% Qinghai 241.7

31 Heilongjiang Unpublished 6.1% Tibet Autonomous Region 102.6

31 Provinces and Municipalities’

GDP and growth rate in 2015-2016

17

100.4

100.7

99.2 101.2

103.9

101.8 101.5

104.8105.9

99.3

103.3

105.4 102.6 102.6102.0

101.4102.0102.8

98.797.8

102.3

106.1

104.9103.0

103.1

106.9

94.6

105.5 106.0

98.3 98.1 98.1

94.8

98.6

88

92

96

100

104

108

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

China’s Consumer Price Index & China’s Industrial Producer Price Index

CPI(Last year=100) PPI(Last year=100)


The industrial producer price index (PPI) has maintained negative growth for five consecutive years.

Although domestic supply-side reforms, cutting overcapacity, and increases in international bulk stock

prices have boosted the PPI, the weak demand has caused a lack of continuity in the recovery of the PPI.

In 2016, the consumer price index (CPI) rebounded slightly, and inflationary pressure remained high.


18

Source：China’s Ministry of Human Resources and Social Security

50.0% 50.0% 50.0% 49.1% 46.9% 44.8% 42.6% 40.8% 39.6% 38.1% 36.7% 34.8% 33.6% 31.4% 29.5% 28.4% 27.7%

22.5% 22.3% 21.4% 21.6% 22.5% 23.8% 25.2% 26.8% 27.2% 27.8% 28.7% 29.5% 30.3% 30.1% 29.9% 29.2% 28.8%

27.5% 27.7% 28.6% 29.3% 30.6% 32.2% 32.4% 33.2% 34.1% 34.6% 35.7% 36.1% 38.5% 40.6% 42.4% 43.5%

7.2

7.3 7.3

7.4 7.4

7.5 7.5

7.5 7.6 7.6

7.6 7.6

7.7 7.7

7.7 7.7 7.8

6.9

7.0

7.1

7.2

7.3

7.4

7.5

7.6

7.7

7.8

7.9

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Employment in Different Industries

Primary Industry Employment Secondary Industry Employment

Tertiary Industry Employment Employees(Hundred Million Persons)

31.4%

With the continuous development of the service industry, the scale of the service industry in providing

employment positions is also growing. In 2016, the proportion of employed persons in the tertiary industry

reached 43.5%, a sharp increase from 2015. Among them, the ability of the high-tech service industry

and the people's livelihood service industry to provide employment positions was more prominent.


19

6,280 6,860 7,703 8,472 9,422 10,493

11,760 13,786

15,781 17,175

19,109

21,810

24,565 26,955

28,844 31,195

33,616

2,253 2,366 2,476 2,622 2,936 3,255 3,587 4,140 4,761 5,153 5,919 6,977 7,917 8,896 9,892

11,422 12,363

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Chinese Residents’ Per-Capita Disposable Income Per Capita Disposable Income of Urban Residents (RMB)Per Capita Disposable Income of Rural Residents (RMB)


In 2016, Chinese resident income growth was overall faster than economic growth. The annual national

per capita disposable income of the country reached 23,821 yuan, an increase of 8.4% over the previous

year. After deducting the price factor, the per capita disposable income actually increased by 6.3%.

Among them, the per capita disposable income of urban residents was 33,616 yuan and the per capita

disposable income of rural residents was 12,363 yuan.


20

474 510 621 851

1,155 1,422

1,760

2,177

2,563

2,208

2,974

3,642

3,867 4,159 4,303

3,959 3,685

249 266 326 438 593

762

969 1,220 1,431

1,202

1,578

1,898 2,049

2,209 2,343 2,277

2,097

225 244 295 413 561 660 791

956 1,133

1,006

1,396

1,743 1,818 1,950 1,960

1,684 1,588

80

580

1,080

1,580

2,080

2,580

3,080

3,580

4,080

4,580

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

China’s Total Foreign Trade Volume

Total Amount of Import and Export(Billion USD) Total Amount of Export(Billion USD)

Total Amount of Import(Billion USD)


In 2016, China's foreign trade import and export volume both declined. Nevertheless, China's

export growth rate was still better than the world's major economies and emerging countries. It

was noteworthy that the import and export of processing trade or traditional labor-intensive

products had been greatly reduced.


21

1,290 1,762 2,002 1,961

2,503

3,651

4,439

5,528

52.4

40.6 42.1

37.4 36.3 38.4

0

10

20

30

40

50

60

0

1,000

2,000

3,000

4,000

5,000

6,000

2008 2010 2011 2012 2013 2014 2015 2016

New Registered Enterprises & Foreign-funded Enterprises in ChinaNew Registered Enterprises(Thousand Households)

New Registered Foreign-funded Enterprises in China(Thousand Households)

Source：SAIC General Office, Statistics Department

The superposition effect of the commercial system reform and the national entrepreneurship innovation

policy has effectively promoted the rapid growth of main market players. In 2016, the number of newly

registered enterprises nationwide was 5.528 million, an increase of 24.5% over the previous year,

breaking a new record.


22

203,208 208,056 242,284

353,030 376,711

406,442 434,937 446,487

481,179

0

100,000

200,000

300,000

400,000

500,000

600,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Number of Foreign-funded Enterprises(Households)

Number of Foreign-funded Enterprises in China

China market has been and will continue to be the most important “foreign investment friendly”

market. Most foreign enterprises positioned China market not only as a manufacturing base but

also as the world’s largest market, hence had no intention to withdraw their investment.


Note: Basic information of foreign-funded enterprises is obtained from SAIC. Since 2008, the branches of the foreign-funded enterprises were included in the statistics.© 2017 Beyond Summits

23


40.7 46.9

52.7 53.5 60.6 60.3 63.0

74.8

92.4 90.0

105.7

116.0 111.7

117.6 119.6 126.3 126.0

0

20

40

60

80

100

120

140

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

China’s Foreign Direct Investment Amount

Actual Utilized Amount of FDI(Billion USD)

In year-on-year terms, China’s foreign direct investment amount decreased slightly in 2016, which

was dampened by sluggish international economic situation.


24

Source：United Nations Conference on Trade and Development

26.5

55.9 56.5

68.8 74.7

87.8

107.8

123.1 127.6

183.1

0

20

40

60

80

100

120

140

160

180

200

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

China’s Outward Direct Investment

China’s Outward Direct Investment(Billion USD)

In 2016, the amount of China's Outward Foreign Direct Investment (OFDI) increased by 43.5% to reach

US $ 183 billion. China surpassed Japan for the first time to become the second largest global investor

after the United States, up 3 places compared to 2015. With the construction of the Belt and Road and

the promotion of international capacity cooperation, China's outward foreign direct investment is expected

to remain at a relatively high level.

© 2016 Beyond Summits© 2017 Beyond Summits

25

827.70 827.70 827.68 819.17 797.18760.40

694.51 683.10 676.95645.88 631.25 619.32 614.28 622.84

664.23

800.58

936.13

1029.001019.531001.901041.751022.27

952.70897.25 900.11

810.67 822.19 816.51

0

200

400

600

800

1,000

1,200

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

China’s RMB Exchange Rate(Yearly Average)

RMB against USD Exchange Rate(USD=100)(RMB) RMB against EUR Exchange Rate(EUR=100)(RMB)


In 2016, under the strong appreciation of the U.S. dollar and the expected impact of rate hike by

the Federal Reserve, the exchange rate of the RMB against the U.S. dollar devalued, with an

annual average of 6.64.


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China Economy Overview - beyondsummits.com€¦ · • Due to the increasingly fierce international competition for attracting foreign investment and the downturn in the domestic