China is the main locomotive of the world economy. Alexander Sivtsov
In this article, we will talk about the country of the Rising Sun, namely China, whose economy should be considered the main engine of world economic development. Anyone who does not even have an economic education and does not practice trading knows that Chinese goods are sold all over the world. China is the world’s leader in the production of most industrial products, as well as automobiles. China ranks first in the world in terms of exports, and ranks first in gold and foreign exchange reserves. Let us now take a closer look at the main economic indicators of the country.
GDP of China
As in my previous article, first of all, let’s consider the GDP indicator (Gross Domestic Product). In 2010, China by the level of GDP has bypassed Japan and became the second economy of the world in this indicator after the United States. At the end of 2016, China’s GDP was $ 11.12 trillion, which is more than double the GDP of Japan, which in 2016 amounted to $ 4.94 trillion. According to recent data, China’s annual GDP growth rate was 6.8%, which is an average for the past three years and well above the US GDP growth of 2.6%.
Fig.1 Dynamics of changes in GDP growth in annual terms from 2015 to 2018
Unemployment rate in China
The employment of the population in China is the main trump card of the economy of this country, since it was thanks to a huge resource of labor that the Chinese economy managed to reach current heights. According to recent data, the unemployment rate in China was 3.9% and continues to decline. Reduction of unemployment is due to migration of people from rural areas to cities. At the end of 2017, the level of urbanization was 58.52%, while the government plans to reach 60% by 2020 and 70% by 2030. According to analysts, a 1% increase in urbanization, in 5 years will yield 5% of GDP growth. Since 2010, China’s GDP has grown by $ 6.0 trillion and maintains high growth rates. It is possible that after 10 years, the Chinese economy will be on the heels of the US economy, which has a GDP of about $ 18.5 trillion.
Figure 2. Dynamics of changes in the unemployment rate from March 2017 to February 2018
The rate of inflation in China
As in other developed countries of the world, the growth rate of inflation plays a key role in the growth of China’s economy. According to recent data, the inflation rate in China was 2.1%, exceeding the level of 1.2% a year earlier. In many ways, inflation in China is supported by rising energy prices. Due to the huge industry, the demand for energy in China is growing every year.
Fig.3 Dynamics of changes in the level of inflation from March 2017 to February 2018
The Chinese yuan is not quoted on the international currency market and traders do not have the opportunity to trade the currency of one of the most economically strong countries in the world. The fact that the yuan is not quoted on forex, as for me, for China is only a plus. The thing is that if the yuan was available for trading on the forex market, it would immediately replace the yen and other instruments of the “safe haven”, which would negatively affect China’s inflation and economic growth. Despite the fact that the yuan is not traded on forex, China’s economy has a significant impact on world markets. China is not only a “peace factory”, but also one of the largest consumption markets, which is very beneficial for its trading partners, among which are the countries with the strongest economy in the world.
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