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Introduction
1.1 Geographic location:

China is situated between latitudes 18° and 54° North and longitudes 73° and 135° East, which is
in Eastern Asia. Fourteen countries share boundaries with China. The total land boundaries of
China measures 22,117 kilometers (13,743 miles) long. The total area of China is 9,640,821
square kilometers (3,704,427 square miles). In terms of land area, the People's Republic of China
is the second largest country in the world and in terms of total area, the fourth largest country in
the world. China's shoreline extends approximately 14,500 kilometers (9,000 miles), the eleventh
longest shoreline in the world. China is bordered by the South China Sea to the southeast and by
the East China Sea towards the east, separating China from Korea, Taiwan, and Japan.

In terms of land area, the People's Republic of China is the second largest country in the world
and in terms of total area, the fourth largest country in the world.Maritime Boundaries: South
Korea, Taiwan

1.2 historical background

Chinese history is broken up into a series of dynasties for ease of consumption. When
sightseeing in China, it is often difficult to remember which dynasty is which. Here’s a quick
rundown to help you remember (with a few gaps where no dynasty dominated China):

Qing Dynasty (1644-1912) means 100-400 years ago. This period was marked by colonialism,
internal rebellions and the Opium Wars.

Ming Dynasty (1368-1644) means pretty old, but not that old in the grand scheme of China’s
history. Roughly 400-700 years old if you want to be semi-precise. This was the era that the
Forbidden City and Great Wall of China were built.

Yuan Dynasty (1271-1368) basically means Kublai Khan and the Mongol era. You won’t come
across much from this dynasty.

Song Dynasty (970-1279) means around 1000 years old. You might see some nice artwork from
this era and a few temples reconstructed in the Song Dynasty style.

Tang Dynasty (618-907): this was a golden age so you’ll find things from this era in just about
every museum. Also, Xi’an was the capital during the Tang Dynasty, so it will come up a lot
when you visit Xian.

Han Dynasty (206 BC-220 AD) means really old – 2000 years even. You won’t come across too
much from this era though, although it was another golden age.

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Qin Dynasty (221 BC-206 BC) will only be relevant when you see the Terracotta Warriors. They
date from this dynasty.

Warring States Period (475 BC-221 BC) was a time of continual warfare between the kingdoms
which spawned Sun Tzu’s Art of War and lots of stories about warriors.

Spring and Autumn Period (722 BC-476 BC) was an age of thinkers – Confucius and Laozi lived
then.And those are basically the only dynasties and eras you need to know. Anything before the
Spring and Autumn Period is probably semi-fictional and anything left out above wasn’t all that
important.

The Founding of Modern China

What exactly happened after the last dynasty fell can be a bit confusing as well. Here’s the deal:
basically, the republican movement was fragmented. The two key players were the Nationalists
(Kuomintang) and the Communists. Although he led the Kuomintang,Dr Sun Yatsen is regarded
by all as the father of modern China as he really pushed forward the republican agenda. After his
death in 1925 the Kuomintang and Communists fought a bitter civil war. The Communists were
finally victorious in 1949 while the remnants of the Kuomintang fled to Taiwan.

Mao Zedong was the dominant figure in the Chinese Communist Party from the founding of the
People’s Republic of China until his death in 1976. After his death China began to open up to the
outside world again and started on the path towards a market economy

1.3 Ethnic and religious groups

China's San Jiao (three religions) include Confucianism, Buddhism, and Taoism, and historically
have had a significant impact in shaping Chinese culture.

As a large united multi-national state, China is composed of 56 ethnic groups. Among them Han
Chinese account for 91.59% of the overall Chinese population and the other 55 make up the
remaining 8.41% according to the Fifth National Population Census of 2000. As the combined
population of these other minorities is far fewer than that of the Han, they form the 55 minorities
of China.These numerous ethnic groups share China's vast lands but at the same time many live
in their individual communities. The relationships between them have been formed over many
years.

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Chinese Han People

With a population of 1159.4 million, the Han Chinese can be found in almost every part of
China. However, they mainly live in the middle and lower reaches of the Yellow River, Yangtze
River and the Pearl River, and also in the Northeast Plain Region (Songliao Plain). They form
the largest ethnic group within China and also the largest in the world. The Han people have their
own distinctive way of life.

55 Minorities in China

The 55 minority ethnic groups are distributed extensively throughout different regions of China.
The regions where they are most concentrated are Southwest China, Northwest China and
Northeast China. No matter whether it is Inner Mongolia, Xinjiang, Ningxia, Guangxi, Tibet,
Yunnan, Guizhou, Qinghai or Sichuan, Gansu, Hubei, Hunan or another province, one can find
Chinese minorities. From the areas listed above, the greatest number of minorities can be found
in Yunnan Province (25 ethnic groups). Zhuang has the largest population (more than 16 million)
of minority ethnic groups.

1.4 Political and interest groups:

The politics of China takes places in a framework of a socialist republic run by a single party, the
Communist Party of China. The leadership of the Communist Party is stated in the Constitution
of the People's Republic of China. State power within the People's Republic of China is
exercised through the Communist Party, the Central People's Government and their provincial
and local representation.

As a single-party state, the General Secretary of the Communist Party of China holds ultimate
power and authority over state and government.

1.5 Status at international level:

china holds a permanent seat, which affords it veto power, on the Security Council of the United
Nations (UN). Prior to 1971, the Republic of China on Taiwan held China’s UN seat, but, as of
that date, the People’s Republic of China successfully lobbied for Taiwan’s removal from the
UN and took control of the seat.

China is an active member of numerous UN system organizations, including the UN General

Assembly and Security Council; Food and Agriculture Organization of the UN; UN Conference
on Trade and Development; UN Educational, Scientific and Cultural Organization; UN Office of
the High Commissioner for Refugees; UN Industrial Development Organization; UN Institute
for Training and Research; UN Monitoring, Verification, and Inspection Commission; and UN
Truce Supervision Organization. China also holds memberships in the African Development
Bank, Asian Development Bank, Asia Pacific Economic Cooperation, Association of Southeast
Asian Nations (dialogue partner), Association of Southeast Asian Nations Regional Forum

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Also, Bank for International Settlements, Caribbean Development Bank, Group of 77,
International Atomic Energy Agency, International Bank for Reconstruction and Development,
International Chamber of Commerce, International Civil Aviation Organization, International
Criminal Police Organization, International Development Association, International Federation
of Red Cross and Red Crescent Societies, International Finance Corporation, International Fund
for Agricultural Development, International Hydrographic Organization, International Labour
Organization, International Maritime Organization, International Monetary Fund, International
Olympic Committee, International Organization for Migration (observer), International
Organization for Standardization, International Red Cross and Red Crescent Movement,
International Telecommunication Union, Latin American Integration Association (observer).

As well as Non-Aligned Movement (observer), Organisation for the Prohibition of Chemical

Weapons, Permanent Court of Arbitration, Shanghai Cooperation Organization, Universal Postal
Union, World Customs Organization, World Health Organization, World Intellectual Property
Organization, World Meteorological Organization, World Tourism Organization, World Trade
Organization, and Zangger Committee

2.Overview of the economy

The Chinese economy has witnessed tremendous transition and growth since 1978 when Deng
Xiaoping introduced China to capitalist market reforms and moved away from a centrally
planned economy.

The resulting growth has persisted for the last 35 years; its Gross Domestic Product (GDP) has
seen an average annual growth rate of 10.12% between 1983 and 2013, making China's economy
the second-largest in the world.

China's transformation from a sleeping rural, agricultural giant to manufacturing and service
sector kingpin had brought rapid infrastructure development, urbanization, rising per capita
income (PCI) and a big shift in the composition of its GDP.

China’s GDP is broadly contributed by three broader sectors or industries – primary industry
(agriculture), secondary industry (construction and manufacturing) and tertiary industry (the
service sector).

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2.1 Agriculture sector:

China is the world's largest producer of rice and other food crops are wheat,
corn(maize),tobacco, soybeans, potatoes, sorghum, peanuts, tea, millet, barley, oilseed, pork,
and fish

Major non-food crops, including cotton, other fibers, and oilseeds.

Animal husbandry constitutes the second most important component of agricultural production.
China is the world's leading producer of pigs, chickens, and eggs, and it also has sizable herds of
sheep and cattle.

China has a long tradition of ocean and freshwater fishing and of aquaculture.

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2.2 Industrial sector:

China has one of the most diverse spread of industrial production in the world, accounted for
45.3 percent of China’s GDP in 2012 – cementing China’s position as the world leader in gross
value of industrial output.

Major industries include mining and ore processing, iron, steel, aluminum, and other metals,
coal; machine building; armaments; textiles and apparel; petroleum; cement; chemicals;
fertilizers; consumer products, including footwear, toys, and electronics; food processing;
transportation equipment, including automobiles, rail cars and locomotives, ships, and aircraft;
telecommunications equipment, commercial space launch vehicles, satellites.

In 2012, China had the 28th fastest industrial production growth rate in the world at 7.9% that is
called 'The World’s Factory'.

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2.3 Service Sector:

China's service sector has doubled in size over the last two decades to account for about 46% of
GDP.

In 2013, it surpassed China's the secondary industries for the first time. Within the service sector
are transport, storage and post (5% of GDP), wholesale and retail trades (10%), hotel and
catering services (2%),financial services (6%), real estate (6%) and mishmash of services
categorized as 'other' (18%).

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China employment by sector:

The chart shows that the employment in secondary and tertiary industry has been increasing in
recent years while the employment in primary industry has been decreasing

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2.4 Nature of exports, imports by destination

China exports

china is the largest export economy in the world and the 37th most complex economy according
to the Economic Complexity Index (ECI). In 2014, China exported $2.37T and imported $1.53T,
resulting in a positive trade balance of $834B. In 2014 the GDP of China was $10.4T and its
GDP per capita was $13.2k.

The top exports of China:

The top exports of China are Computers ($208B), Broadcasting Equipment ($157B), Telephones
($107B), Integrated Circuits ($61.5B) and Office Machine Parts ($46.9B), using the 1992
revision of the HS (Harmonized System) classification. Its top imports are Crude Petroleum
($205B), Integrated Circuits ($135B), Iron Ore ($73.4B), Gold ($63.9B) and Cars ($55.2B).

The top export destinations of China:

The top export destinations of China are the United States ($432B), Hong Kong ($258B), Japan
($166B), Germany ($101B) and South Korea ($88.9B).

China imports

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In 2014 China imported $1.53T, making it the 2nd largest importer in the world. During the last
five years the imports of China have increased at an annualized rate of 14.4%, from $782B in
2009 to $1.53T in 2014

The top imports of china:

Electronic equipment ($431.6B), oil (198.7B), machinery (157.2B), medical and technical
equipment($99.7B), vehicles ($69.6B), plastic ($65.6B), organic chemical ($47.9B), oil seed
($39.6B), and copper ($38.4B)

The top import origins of china:

The top import origins are South Korea ($142B), the United States ($134B), Other Asia ($131B),
Japan ($131B) and Germany ($96.7B).

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3.Magnitude and trends of economics and social indicators

3.1 Population

The current population of China is 1,381,280,041 as of Sunday, May 1, 2016, based on the latest
United Nations estimates.

China population is equivalent to 18.72% of the total world population.

China ranks number 1 in the list of countries by population.

The population density in China is 147 per Km2 (381 people per mi2).

The total land area is 9,390,784 Km2 (3,625,800 sq. miles)

56.6 % of the population is urban (799,964,410 people in 2016)

The median age in China is 37.3 years.

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3.2 Literacy rate

Adult literacy rate is the percentage of people age 15 and above who can, with understanding,
read and write a short, simple statement on their everyday life. As of 2010, China’s literacy rate
was just over 95%.This is an impressive improvement for a country which, as recently as 1990,
had a literacy rate of just 78%. Even though just 5% of Chinese adults are illiterate, that still
means an estimated 54 million people aged 15 and older are unable to read and write a simple
sentence.

Literacy rate – adult total (15 years and older)

Total population: 1990-77.8%

2000- 90.9%

2010- 94.3%

2015-95.5%

Male: 1990-87.0%

2000- 95.1%

2010- 97.1%

2015-97.8%

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Female: 1990-68.1%

2000- 86.5%

2010- 91.3%

2015-93.2%

3.3 China Deposits (personal saving)

Personal Savings in China remained unchanged at 0.35 percent in 2014 from 0.35 percent in
2013. Personal Savings in China averaged 1.21 Percent from 1990 until 2014, reaching an all
time high of 3.15 Percent in 1993 and a record low of 0.35 Percent in 2012

3.4 China Employed Persons

The number of employed persons in China increased to 76977 Tens of Thousands in 2013 from
76704 Tens of Thousands in 2012. Employed Persons in China averaged 58826.14 Tens of
Thousands from 1952 until 2013, reaching an all time high of 76977 Tens of Thousands in 2013
and a record low of 20729 Tens of Thousands in 1952.

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3.5 China unemployment rate

Unemployment Rate in China remained unchanged at 4.10% in the third quarter of 2014 from
4.10 %in the third quarter of 2014. Unemployment Rate in China averaged 4.14% from 2002
until 2014, reaching an all time high of 4.30 % in the fourth quarter of 2003 and a record low of
3.90 %in the third quarter of 2002.

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3.6 China Inflation Rate

The inflation rate in China was recorded at 1.6 % in October of 2014. Inflation Rate in China
averaged 5.72% from 1986 until 2014, reaching an all time high of 28.40% in February of 1989
and a record low of -2.20 % in April of 1999.

3.7 Income Inequality

China has one of the world’s highest levels of income inequality, with the richest 1 per cent of
households owning a third of the country’s wealth, a report from Peking University has found.

The poorest 25 per cent of Chinese households own just 1 per cent of the country’s total wealth,
the study found.

China’s Gini coefficient for income, a widely used measure of inequality, was 0.49 in 2012,
according to the report. The World Bank considers a coefficient above 0.40 to represent severe
income inequality

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3.8 Foreign Direct Investment

In China, foreign direct investment refer to the accumulated foreign investment in domestic
companies or entities in non financial sector in a given year. Foreign Direct Investment in China
increased by 354.20 USD HML in March of 2016. Foreign Direct Investment in China averaged
415.77 USD HML from 1997 until 2016, reaching an all time high of 1262.70 USD HML in
December of 2015 and a record low of 18.32 USD HML in January of 2000. Foreign Direct
Investment in China is reported by the Ministry of Commerce of the People's Republic of China

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3.9 China GDP

The Gross Domestic Product (GDP) in China was worth 10354.80 billion US dollars in 2014.
The GDP value of China represents 16.70 percent of the world economy. GDP in China
averaged 1437.04 USD Billion from 1960 until 2014, reaching an all time high of 10354.80 USD
Billion in 2014 and a record low of 46.68 USD Billion in 1962. GDP in China is reported by the
World Bank Group.

3.10 GDP growth rate

The Gross Domestic Product (GDP) in China expanded 1.90 percent in the third quarter of 2014
over the previous quarter. GDP Growth Rate in China averaged 1.97% from 2010 until 2014,
reaching an all time high of 2.50% in the second quarter of 2011 and a record low of 1.40 %in
the first quarter of 2012.

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3.11 GDP per capita

China GDP per capita 1960-2016 | Data | Chart | Calendar | Forecast

The Gross Domestic Product per capita in China was last recorded at 3865.88 US dollars in
2014. The GDP per Capita in China is equivalent to 31 percent of the world's average. GDP per
capita in China averaged 873.24 USD from 1960 until 2014, reaching an all time high of 3865.88
USD in 2014 and a record low of 83.33 USD in 1962. GDP per capita in China is reported by the
World Bank

3.12 GDP Per Capita PPP

The Gross Domestic Product per capita in China was last recorded at 12608.87 US dollars in
2014, when adjusted by purchasing power parity (PPP). The GDP per Capita, in China, when
adjusted by Purchasing Power Parity is equivalent to 71 percent of the world's average. GDP per
capita PPP in China averaged 5476.62 USD from 1990 until 2014, reaching an all time high of
12608.87 USD in 2014 and a record low of 1516.21 USD in 1990. GDP per capita PPP in China
is reported by the World Bank.

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3.13 Gross national savings (percent of gdp)

China’s gross national savings were 49.77% of the gdp in year 2015

source
International Monetary Fund

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3.14 Infant Mortality Rate

data.worldbank.org/indicator/SP.DYN.IMRT.IN

Infant mortality rate compares the number of deaths of infants under one year old in a given year
per 1,000 live births in the same year. This rate is often used as an indicator of the level of health
in a country

Country name 2011 2012 2013 2014

China 13 12 11 10

3.14 China HDI

A composite index measuring average achievement in three basic dimensions of human

development—a long and healthy life, knowledge and a decent standard of living

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http://hdr.undp.org/en/data

3.15 Gender Inequality Index

China has a GII value of 0.191, ranking it 40 out of 155 countries in the 2014 index. In China,
23.6 percent of parliamentary seats are held by women, and 58.7 percent of adult women have
reached at least a secondary level of education compared to 71.9 percent of their male
counterparts. For every 100,000 livebirths, 32 women die from pregnancy related causes; and the
adolescent birth rate is 8.6 births per 1,000women of ages 15-19. Female participation in the
labour market is 63.9 percent compared to 78.3 for men.

http://hdr.undp.org/en/data

3.16 Population below poverty line:

National estimates of the percentage of the population falling below the poverty line are based on
surveys of sub-groups, with the results weighted by the number of people in each group.
Definitions of poverty vary considerably among nations. For example, rich nations generally
employ more generous standards of poverty than poor nations.

Country 1999 2001 2004 2008 2009 2010 2011 2012 2013 2014

China 10 10 10 8 8 2.8 2.8 13.4 13.4 6.1

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Source: CIA World Factbook

4. Application of growth and development theories:

4.1 Rostow Growth Model

Walt Rostow took an historical approach in suggesting that developed countries have tended to
pass through 5 stages to reach their current degree of economic development.

Traditional society:. This is an agricultural economy of mainly subsistence farming, little of

which is traded. The size of the capital stock is limited and of low quality resulting in very low
labour productivity and little surplus output left to sell in domestic and overseas markets

Pre-conditions for take-off: Agriculture becomes more mechanised and more output is traded.
Savings and investment grow although they are still a small percentage of national income
(GDP). Some external funding is required - for example in the form of overseas aid or perhaps
remittance incomes from migrant workers living overseas

Take-off: Manufacturing industry assumes greater importance, although the number of

industries remains small. Political and social institutions start to develop - external finance may
still be required. Savings and investment grow, perhaps to 15% of GDP. Agriculture assumes
lesser importance in relative terms although the majority of people may remain employed in the
farming sector. There is often a dual economy apparent with rising productivity and wealth in
manufacturing and other industries contrasted with stubbornly low productivity and real incomes
in rural agriculture.

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Drive to maturity: Industry becomes more diverse. Growth should spread to different parts of
the country as the state of technology improves - the economy moves from being dependent on
factor inputs for growth towards making better use of innovation to bring about increases in real
per capita incomes

Age of mass consumption: Output levels grow, enabling increased consumer expenditure.
There is a shift towards tertiary sector activity and the growth is sustained by the expansion of a
middle class of consumers

According to the Rostow Growth Model China is at Drive to Maturity State. Here the growths
are self sustaining, industries are more diversified and the use of technology increases and
properly utilized.

4.2 Classical Model Of Growth:

According to the assumptions of Classical growth Model the economy is working at full
employment and a laissez faire economy, which means there is 0 unemployment rate and there is
no role of Government. So for China this theory is not applicable. The current unemployment
rate is still 4.10 and Government runs the economy not a Laissez faire economy. This theory also
ignores the role of technology but in China use of technology is increasing rapidly.

4.3 H-D Model of Economic Growth:

Harrod and Domor Model believe that the economy can grow when there is an increase in
savings or technological advancement. In china there is no change in savings since last 2 years
i.e 0.35 from 2012 -2014. Savings is a key factor of investments which means if there is
investment there are savings. But if we look critically in China investments are increasing and
economy is growing but savings are very miner and no increase. So this Model is not applicable
for a country like China.

4.4 W. Arthur Lewis Theory:

According to the Arthur Lewis theory the economy has backward agriculture sector and
advanced industrial sector, the unproductive labour has to be transferred to industrial sector and
believes in Urbanization. In China the Agriculture sector contributes 10% in the GDP whereas
Industrial sector and service sector contributes 43.5% and 46 % n total GDP. The share of GDP
of agriculture sector is still very high as compare to the other Developed countries. This theory is
applicable for China; the surplus labour should be transferred to industrial sector but to make
sure first that the transfer of labour is costless and the agriculture sector should not suffer from
this transfer. As it is still contributing 10% in the GDP

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4.5 Neo- Classical Counterrevolution:

The Neo Classical Model emphasizes on free market, privatization, laissez Fair economy, free
trade. Neo classic says that underdevelopment is due to internally induced phenomenon caused
by bad economic policies and too much government intervention. But after some analysis this
theory found not be worked in some situations and its concluded that both the government and
private sector should work together to make a developed country, if we look at china the private
and government sectors are playing their roles for Economic Growth. Both the internal and
external stimulations are utmost necessary. So for china this kind of theory is applicable where
both private and govt. sector works together for the economic growth

4.6 Balanced Growth Theory:

The Balanced Growth theory says that for development all the primary, secondary and tertiary
sectors must be simultaneously developed. But if we look at china the economy is developed but
the sectors are not developed simultaneously, but their economy is growing majorly on the basis
of secondary and tertiary sector. So this theory is also not applicable on china

4.7 Solow Growth Model

Solow growth model assumes that the long term growth is a function og technological
advancements not investments. This model is built on 2 equations a production function ant
capital accumulation, if we look at china the economy is majorly growing due to the
technological advancement. So this theory is applicable on china.

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5.conclusion and implications

China is a developed country. It enjoys lots of benefits being developed, they are trying to
reduce there agriculture sector and to increase the service and industrial sector.

The theories which are applicable for china can help them to grow more and compete with other
developed nations

Refernces:

http://www.worldometers.info/world-population/china-population/

https://www.oecd.org/env/country-reviews/37657409.pdf

http://www.worldbank.org/en/country/china/overview

http://www.tradingeconomics.com/china/indicators

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