As of 2020, China was second in the world, after the US, in total number of billionaires and total number of millionaires, with 698 Chinese billionaires and 4.4 million millionaires.[338][339] In 2019, China overtook the US as the home to the highest number of people who have a net personal wealth of at least $110,000, according to the global wealth report by Credit Suisse.[340][341] According to the Hurun Global Rich List 2020, China is home to five of the world's top ten cities (Beijing, Shanghai, Hong Kong, Shenzhen, and Guangzhou in the 1st, 3rd, 4th, 5th, and 10th spots, respectively) by the highest number of billionaires, which is more than any other country.[342] China had 85 female billionaires as of January 2021, two-thirds of the global total, and minted 24 new female billionaires in 2020.[343]
However, it ranks behind over 60 countries (out of around 180) in per capita economic output, making it an upper-middle income country.[344] Additionally, its development is highly uneven. Its major cities and coastal areas are far more prosperous compared to rural and interior regions.[345] China brought more people out of extreme poverty than any other country in history[346]—between 1978 and 2018, China reduced extreme poverty by 800 million. China reduced the extreme poverty rate—per international standard, it refers to an income of less than $1.90/day—from 88% in 1981 to 1.85% by 2013.[347] According to the World Bank, the number of Chinese in extreme poverty fell from 756 million to 25 million between 1990 and 2013.[348] The portion of people in China living below the international poverty line of $1.90 per day (2011 PPP) fell to 0.3% in 2018 from 66.3% in 1990. Using the lower-middle income poverty line of $3.20 per day, the portion fell to 2.9% in 2018 from 90.0% in 1990. Using the upper-middle income poverty line of $5.50 per day, the portion fell to 17.0% from 98.3% in 1990.[349]
For Economic history of China, see Economic history of China before 1912, Economic history of China (1912–1949), and Economic history of China (1949–present).
China's nominal GDP trend from 1952 to 2015
From its founding in 1949 until late 1978, the People's Republic of China was a Soviet-style centrally planned economy. Following Mao's death in 1976 and the consequent end of the Cultural Revolution, Deng Xiaoping and the new Chinese leadership began to reform the economy and move towards a more market-oriented mixed economy under one-party rule. Agricultural collectivization was dismantled and farmlands privatized, while foreign trade became a major new focus, leading to the creation of Special Economic Zones (SEZs). Inefficient state-owned enterprises (SOEs) were restructured and unprofitable ones were closed outright, resulting in massive job losses.[citation needed] Modern-day China is mainly characterized as having a market economy based on private property ownership,[350] and is one of the leading examples of
In the early 2010s, China's economic growth rate began to slow amid domestic credit troubles, weakening international demand for Chinese exports and fragility in the global economy.[358][359][360] China's GDP was slightly larger than Germany's in 2007; however, by 2017, China's $12.2 trillion-economy became larger than those of Germany, UK, France and Italy combined.[361] In 2018, the IMF reiterated its forecast that China will overtake the US in terms of nominal GDP by the year 2030.[362] Economists also expect China's middle class to expand to 600 million people by 2025.[363]
In 2020, China was the only major economy in the world to grow, recording a 2.3% growth due to its success in taming the coronavirus within its borders.[364]
Share of world GDP (PPP)[365]YearShare19802.32%19904.11%20007.40%201013.89%201818.72%
China is a member of the WTO and is the world's largest trading power, with a total international trade value of US$4.62 trillion in 2018.[366] Its foreign exchange reserves reached US$3.1 trillion as of 2019,[367] making its reserves by far the world's largest.[368][369] In 2012, China was the world's largest recipient of inward foreign direct investment (FDI), attracting $253 billion.[370] In 2014, China's foreign exchange remittances were $US64 billion making it the second largest recipient of remittances in the world.[371] China also invests abroad, with a total outward FDI of $62.4 billion in 2012,[370] and a number of major takeovers of foreign firms by Chinese companies.[372]
Largest economies by nominal GDP in 2018[377]
Following the 2007–08 financial crisis, Chinese authorities sought to actively wean off of its dependence on the U.S. dollar as a result of perceived weaknesses of the international monetary system.[378] To achieve those ends, China took a series of actions to further the internationalization of the Renminbi. In 2008, China established dim sum bond market and expanded the Cross-Border Trade RMB Settlement Pilot Project, which helps establish pools of offshore RMB liquidity.[379][380] This was followed with bilateral agreements to settle trades directly in renminbi with Russia,[381] Japan,[382] Australia,[383] Singapore,
See also: Income inequality in China
China has had the world's largest middle class population since 2015,[389] and the middle class grew to a size of 400 million by 2018.[390] In 2020, a study by the Brookings Institution forecast that China's middle-class will reach 1.2 billion by 2027 (almost 4 times the entire U.S. population today), making up one fourth of the world total.[391] Wages in China have grown a lot in the last 40 years—real (inflation-adjusted) wages grew seven-fold from 1978 to 2007.[392] By 2018, median wages in Chinese cities such as Shanghai were about the same as or higher than the wages in Eastern European countries.[393] China has the world's highest number of billionaires, with nearly 878 as of October 2020, increasing at the rate of roughly five per week.[394][395][396] China has a high level of economic inequality,[397] which has increased in the past few decades.
As of 2020, China was second in the world, after the US, in total number of billionaires and total number of millionaires, with 698 Chinese billionaires and 4.4 million millionaires.[338][339] In 2019, China overtook the US as the home to the highest number of people who have a net personal wealth of at least $110,000, according to the global wealth report by Credit Suisse.[340][341] According to the Hurun Global Rich List 2020, China is home to five of the world's top ten cities (Beijing, Shanghai, Hong Kong, Shenzhen, and Guangzhou in the 1st, 3rd, 4th, 5th, and 10th spots, respectively) by the highest number of billionaires, which is more than any other country.[342] China had 85 female billionaires as of January 2021, two-thirds of the global total, and minted 24 new female billionaires in 2020.[343]
However, it ranks behind over 60 countries (out of around 180) in per capita economic output, making it an upper-middle income country.[344] Additionally, its development is highly uneven. Its major cities and coastal areas are far more prosperous compared to rural and interior regions.[345] China brought more people out of extreme poverty than any other country in history[346]—between 1978 and 2018, China reduced extreme poverty by 800 million. China reduced the extreme poverty rate—per international standard, it refers to an income of less than $1.90/day—from 88% in 1981 to 1.85% by 2013.[347] According to the World Bank, the number of Chinese in extreme poverty fell from 756 million to 25 million between 1990 and 2013.[348] The portion of people in China living below the international poverty line of $1.90 per day (2011 PPP) fell to 0.3% in 2018 from 66.3% in 1990. Using the lower-middle income poverty line of $3.20 per day, the portion fell to 2.9% in 2018 from 90.0% in 1990. Using the upper-middle income poverty line of $5.50 per day, the portion fell to 17.0% from 98.3% in 1990.[349]
For Economic history of China, see Economic history of China before 1912, Economic history of China (1912–1949), and Economic history of China (1949–present).
China's nominal GDP trend from 1952 to 2015
From its founding in 1949 until late 1978, the People's Republic of China was a Soviet-style centrally planned economy. Following Mao's death in 1976 and the consequent end of the Cultural Revolution, Deng Xiaoping and the new Chinese leadership began to reform the economy and move towards a more market-oriented mixed economy under one-party rule. Agricultural collectivization was dismantled and farmlands privatized, while foreign trade became a major new focus, leading to the creation of Special Economic Zones (SEZs). Inefficient state-owned enterprises (SOEs) were restructured and unprofitable ones were closed outright, resulting in massive job losses.[citation needed] Modern-day China is mainly characterized as having a market economy based on private property ownership,[350] and is one of the leading examples of state capitalism.[351][352] The state still dominates in strategic "pillar" sectors such as energy production and heavy industries, but private enterprise has expanded enormously, with around 30 million private businesses recorded in 2008.[353][354][better source needed][355][356] In 2018, private enterprises in China accounted for 60% of GDP, 80% of urban employment and 90% of new jobs.[357]
In the early 2010s, China's economic growth rate began to slow amid domestic credit troubles, weakening international demand for Chinese exports and fragility in the global economy.[358][359][360] China's GDP was slightly larger than Germany's in 2007; however, by 2017, China's $12.2 trillion-economy became larger than those of Germany, UK, France and Italy combined.[361] In 2018, the IMF reiterated its forecast that China will overtake the US in terms of nominal GDP by the year 2030.[362] Economists also expect China's middle class to expand to 600 million people by 2025.[363]
In 2020, China was the only major economy in the world to grow, recording a 2.3% growth due to its success in taming the coronavirus within its borders.[364]
Share of world GDP (PPP)[365]YearShare19802.32%19904.11%20007.40%201013.89%201818.72%
China is a member of the WTO and is the world's largest trading power, with a total international trade value of US$4.62 trillion in 2018.[366] Its foreign exchange reserves reached US$3.1 trillion as of 2019,[367] making its reserves by far the world's largest.[368][369] In 2012, China was the world's largest recipient of inward foreign direct investment (FDI), attracting $253 billion.[370] In 2014, China's foreign exchange remittances were $US64 billion making it the second largest recipient of remittances in the world.[371] China also invests abroad, with a total outward FDI of $62.4 billion in 2012,[370] and a number of major takeovers of foreign firms by Chinese companies.[372] China is a major owner of US public debt, holding trillions of dollars worth of U.S. Treasury bonds.[373][374] China's undervalued exchange rate has caused friction with other major economies,[242] and it has also been widely criticized for manufacturing large quantities of counterfeit goods.[375][376]
Largest economies by nominal GDP in 2018[377]
Following the 2007–08 financial crisis, Chinese authorities sought to actively wean off of its dependence on the U.S. dollar as a result of perceived weaknesses of the international monetary system.[378] To achieve those ends, China took a series of actions to further the internationalization of the Renminbi. In 2008, China established dim sum bond market and expanded the Cross-Border Trade RMB Settlement Pilot Project, which helps establish pools of offshore RMB liquidity.[379][380] This was followed with bilateral agreements to settle trades directly in renminbi with Russia,[381] Japan,[382] Australia,[383] Singapore,[384] the United Kingdom,[385] and Canada.[386] As a result of the rapid internationalization of the renminbi, it became the eighth-most-traded currency in the world, an emerging international reserve currency,[387] and a component of the IMF's special drawing rights; however, partly due to capital controls that make the renminbi fall short of being a fully convertible currency, it remains far behind the Euro, Dollar and Japanese Yen in international trade volumes.[388]
See also: Income inequality in China
China has had the world's largest middle class population since 2015,[389] and the middle class grew to a size of 400 million by 2018.[390] In 2020, a study by the Brookings Institution forecast that China's middle-class will reach 1.2 billion by 2027 (almost 4 times the entire U.S. population today), making up one fourth of the world total.[391] Wages in China have grown a lot in the last 40 years—real (inflation-adjusted) wages grew seven-fold from 1978 to 2007.[392] By 2018, median wages in Chinese cities such as Shanghai were about the same as or higher than the wages in Eastern European countries.[393] China has the world's highest number of billionaires, with nearly 878 as of October 2020, increasing at the rate of roughly five per week.[394][395][396] China has a high level of economic inequality,[397] which has increased in the past few decades.[398] In 2018 China's Gini coefficient was 0.467, according to the World Bank.
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