China's economic policies

HideShow resource information

China's economic policies


  • Income Levels target
  • full employment target
  • stable prices target
  • Balance of payment target
  • economic growth info
  • Unemployment info
  • Inflation info
  • Balance of Paymentsinfo


  • 6.5 - 7 %
  • less than 4.5%
  • inflation of 3%
  • payments are balanced
  • China's economy grew by 6.9% in 2015, compared with 7.3% a year earlier, and expanded an annual 6.7 percent in the September quarter of 2016, the same pace as in the previous two quarters, marking its slowest growth in a quarter of a century.For 2016, the Chinese government is targeting the economy to grow between 6.5 to 7.0 percent. This percentage is higher than the target set by the Government so could be lowered.
  • Unemployment rate in China fell slightly to 4.04 percent in the third quarter of 2016 from 4.05 percent in the June quarter. During the first nine months of 2016, the country has created 10.67 million new jobs. These percentages are lower than the target set by the government and this is good because it shows how there was most likely, not only is there a decrease in China’s unemployment rate because of this increase in jobs by the Chinese government, but it also means that there was most likely a boost in the Chinese economy as it means that is there is more likely to be people who will have more disposable income to spend on goods and services which they may not have had access to .These statistics are also used to show how the unemployment rate in China from 2010 to 2014, along with projections up until 2020, has started to decrease over time. It cam be seen that in 2012 that China's unemployment rate had ended up at a range off approximately 4%. It can also be deduced from the statistic that have been shown in the data above, that it can be see that the Chinese unemployment rate can be considered to be fairly constant at staying at just above four percent over the last 5 years, although, there was a significant drop in the Chinese unemployment rate in late 2013, which is shown by the significant dip in the data on the graph that is shown above.
  • For the whole year of 2016, inflation was 2 percent, below government target at around 3 percent. Core Inflation Rate in China increased 1.90 percent in December of 2016 over the same month in the previous year. Core Inflation Rate in China averaged 1.21 percent from 2008 until 2016, reaching an all time high of 2.50 percent in June of 2011 and a record low of -1.60 percent in August of 2009. These percentages are lower than the target set. Also it can also be said that these statistics are used to show how over the five years that this data was collected that the Chinese inflation rate has been decreasing from when the data was first collected in 2012, where it can be seen in the data that has been collected above to drop substantially within 2012 and possibly going into 2013 from around 4.5 percent to just under 2 percent, before there was a slight increase again throughout 2013, which can be shown by the graph shown above to increase from until mid to late 2016, when after that point it starts to increase again, but only by a small amount.
  • China's current account surplus rose 33 percent to $293.2 billion in 2015, or 2.7 percent of GDP, as the goods trade surplus went up 33 percent hitting a record high of $578.1 billion. The services trade gap went up 39 percent to $209.4 billion, the primary income deficit jumped 74 percent to $59.2 billion while the secondary income deficit fell 46 percent $16.3 billion. China has also got consistently high current account surplus which may show the impacts that it has on the global growth many be shown to be smaller than how the global economy has had an impact on China's economy. This could mean that a nation that may have a rising current account surplus like china may possibly be seen by many other states to be causing a high amount of pressure for its currency to appreciate; but however, China is now said to be seeing many depreciation pressures, which is mainly coming from the many large capital outflows that can be found within china. this means that for China’s foreign exchange reserves, that its current account surplus which is at around nearly $300 billion is giving China a significant amount of space from the rapidly depleting reserves that it has.

Overall summary

When it comes to economic growth, China has been going above their target of 6.5-7% with growth going up to 7.3% during 2014 as China introduced plans to build a multi-tier transport network, comprising railways, roads and airport and to create a new economic belt alongside the Yangtze River. However between 2015 and 2016 economic growth has been at its slowest pace. This is because of excess capacities in industries such as coal, steel and cement.China has been successful in reducing it unemployment rates as the trend is negative meaning more people are employed compared to a few years ago. The government's objective is for unemployment to be lower than 4.5 % and the most recent statistic is just 4.04%. This has met the target and has gone below.Overall, these rapid economic performances has been driven by changes in government economic policy that have progressively given greater power to market forces.The government also rigorously enforced a number of competition laws while sharpening the business environment by allowing foreign direct investment in the country, reducing tariffs and ending multiple exchange rates.




amazing, so useful for revision, thanks !!

Similar Economics resources:

See all Economics resources »See all unit 12 resources »