Country Analysis Report China

A Country Analysis report on “CHINA” Subject: International Business (IB) Prepared By: Devang M Dhedhi. (Enrollment No: 117040592010) M. B. A. -Semester-||| Submitted To: Mr. Amit Shah (Assistant Professor) BHAGWAN MAHAVIR COLLEGE OF MANAGEMENT, SURAT MBA PROGRAMME Affiliated to Gujarat Technological University, Ahmedabad 2011-2013 INDEX SR. NO| CONTENT| PAGE NO. | 1| COUNTRY PROFILE| 1| 2| HISTORICAL BACKGROUND| 4| 3| GEOGRAPHY| 6| 4| SOCIETY| 11| 5| GOVERNMENT AND POLITICS| 18| 6| ECONOMY| 25| 7| INTERNATIONAL RELATIONS| 38| 8| TRANSPORTATION AND TELECOMMUNICATION| 41| 9| SUMMARY| 49| 1. COUNTRY

Formal Name: People’s Republic of China (Zhonghua Renmin Gonghe Guo —??????? ). Short Form: China (Zhongguo —?? ). Term for Citizen(s): Chinese (singular and plural) (Huaren — ?? ). Capital: Beijing (Northern Capital — ?? ). Area: 9,956,960 sq km (3. 7m sq miles) Population: 1. 3 bn People: Han Chinese make up around 92% of the population. The remaining 8% is comprised of five minority ethnic groups. Official Language: Mandarin (Putonghua) with many local dialects. Religion(s): China is officially atheistic, but there are five State-Registered religions: Daoism, Buddhism, Islam, Catholic and Protestant Christianity.

Currency: Yuan or Renminbi (RMB) Major political parties: Chinese Communist Party Government: There are major hierarchies in China: the Chinese Communist Party (CCP), the National People’s Congress (China’s legislature), the government and the military. The supreme decision-making body in China is the CCP Politburo and its 9-member Standing Committee, which acts as a kind of ‘inner cabinet’, and is headed by the General Secretary of the Chinese Communist Party. The National People’s Congress (NPC) is China’s legislative body. It has a 5-year membership and meets once a year in plenary session.

However, in practice it is the CCP who takes all key decisions. Head of State and General Secretary of the CCP: President Hu Jintao Chairman of the Standing Committee of the NPC: Wu Bangguo Premier of the State Council: Wen Jiabao State Councillor (Foreign Affairs): Dai Bingguo Foreign Minister: Yang Jiechi Membership of international groups/organisations: United Nations (including permanent membership of the UN Security Council), ASEAN Regional Forum (ARF); Asia-Pacific Economic Cooperation Forum (APEC); Asian Development Bank (ADB); Shanghai Cooperation Organisation; World Trade Organisation (WTO).

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Major Cities: Based on 2000 census data, the largest cities are the four centrally administered municipalities, which include dense urban areas, suburbs, and large rural areas: Chongqing (30. 5 million), Shanghai (16. 4 million), Beijing (13. 5 million), and Tianjin (9. 8 million). Other major cities are Wuhan (5. 1 million), Shenyang (4. 8 million), Guangzhou (3. 8 million), Chengdu (3. 2 million), Xi’an (3. 1 million), and Changchun (3 million). China has 12 other cities with populations of between 2 million and 2. 9 million and 20 or more other cities with populations of more than 1 million persons.

Independence: The outbreak of revolution on October 10, 1911, signaled the collapse of the Qing Dynasty (1644–1911), which was formally replaced by the government of the Republic of China on February 12, 1912. The People’s Republic of China was officially established on October 1, 1949, replacing the Republic of China government on mainland China. Public Holidays: The official national holidays are New Year’s Day (January 1); Spring Festival or Lunar New Year (movable dates—three days—in January and February), Labor Day (May 1), and National Day (two-day observance on October 1–2).

Also commemorated are International Women’s Day (March 8), Youth Day (May 4), Children’s Day (June 1), Chinese Communist Party Founding Day (July 1), Army Day (August 1), and Teachers’ Day (September 10). Flag: The flag of China is red with a large yellow five-pointed star and four smaller yellow five-pointed stars (arranged in a vertical arc toward the middle of the flag) in the upper hoist-side corner. The color red symbolizes the spirit of the revolution, and the five stars signify the unity of the people of China under the leadership of the Chinese Communist Party.

The flag was officially unveiled in Beijing’s Tiananmen Square on October 1, 1949, the formal announcement of the founding of the People’s Republic of China. 2. HISTORICAL BACKGROUND The Chinese imperial system came to an end in 1911. The Qing (Manchu) dynasty was overthrown and China was proclaimed a republic, partly through the efforts of revolutionaries such as Sun Yat-sen. The country then entered a period of warlordism. In 1927 the Nationalist Party or ‘Kuomintang’ (KMT), under its leader Chiang Kai-shek, established a central government in Nanjing. The Chinese Communist Party (CCP) was founded in 1921.

It broke with the KMT and was forced to flee into the interior in the Long March in 1934/35. Both KMT and CCP forces opposed Japan during World War Two but a civil war broke out from 1945-1949. CCP forces under Mao Zedong routed their KMT opponents. In 1949 Mao announced the establishment of the People’s Republic of China. The government of the then Republic of China under President Chiang Kai-shek fled to Taiwan, together with approximately 2 million supporters. The period between 1949 and Mao’s death in 1976 was characterised by an ambitious political and economic restructuring programme.

This involved the collectivisation of industry, the establishment of communes and the redistribution of land. The Cultural Revolution from 1966-1976 brought enormous upheaval in the political system. Mao had to rely on the armed forces to maintain order and exercise control. Recent History In December 1978 the CCP, inspired by Deng Xiaoping, launched a wide-ranging programme of economic and social reform. This sought to modernise the economy, develop China’s external relations (the ‘open door policy’) – especially with the West, and implement a gradual and limited liberalisation of Chinese society.

This period of ‘reform and opening up’ since 1978 is expected to be widely commemorated in China this autumn as the basis of its current economic success and these commemorations may also be used as the platform for further policy reforms. There are no details at this point, but there is much speculation that rural land ownership reform may be prominent. Political opposition to the more liberal reforms forced periods of retrenchment. In June 1989, following the brutal suppression of pro-democracy demonstrators in Beijing, political control swung firmly into the hands of conservative elements within the CCP.

The Chinese government labelled the demonstrations a ‘counter-revolutionary rebellion’ and clamped down on dissent. Prominent dissidents fled the country or went into hiding. Many activists were arrested. Party General Secretary Zhao Ziyang was replaced by Jiang Zemin, former Mayor and Party Secretary of Shanghai. Jiang was appointed to the additional post of State President in March 1993. Jiang continued the policies of Deng Xiaoping, prioritising economic growth, particularly in China’s coastal provinces. Jiang retired as President in March 2003.

Hu Jintao was named President and Wen Jiabao became Premier. Wu Bangguo replaced Li Peng as NPC Chairman. The leadership transition was completed in September 2004 with Jiang retiring from the Chairmanship of the Central Military Commission (CMC). Hu assumed the post of CMC Chairman to add to his roles as State President and Party General Secretary. 3. GEOGRAPHY Location: Usually described as part of East Asia, China is south of Mongolia and the Siberian land mass, west of the Korean Peninsula and insular Japan, north of Southeast Asia, and east of Central and South Asia.

Size: China has a total area of nearly 9,596,960 square kilometers. Included in this total are 9,326,410 square kilometers of land and 270,550 square kilometers of inland lakes and rivers. From east to west, the distance is about 5,000 kilometers from the Heilong Jiang (Amur River) to the Pamir Mountains in Central Asia; from north to south, the distance is approximately 4,050 kilometers from Heilongjiang Province to Hainan Province in the south and another 1,450 kilometers farther south to Zengmu Shoal, a territorial claim off the north coast of Malaysia.

Land Boundaries: China has a total of 22,117 kilometers of land boundaries with 14 other nations. These borders include: Afghanistan (76 kilometers), Bhutan (470 kilometers), Burma (2,185 kilometers), India (3,380 kilometers), Kazakhstan (1,533 kilometers), North Korea (1,416 kilometers), Kyrgyzstan (858 kilometers), Laos (423 kilometers), Mongolia (4,677 kilometers), Nepal (1,236 kilometers), Pakistan (523 kilometers), Russia (4,300 kilometers), Tajikistan (414 kilometers), and Vietnam (1,281 kilometers). Length of Coastline:

China’s coastline extends 14,500 kilometers from the border with North Korea in the north to Vietnam in the south. China’s coasts are on the East China Sea, Korea Bay, Yellow Sea, and South China Sea. Maritime Claims: China claims a 12-nautical-mile territorial sea, a 24-nautical-mile contiguous zone, a 200-nautical-mile exclusive economic zone, and a 200-nautical-mile continental shelf or the distance to the edge of the continental shelf. Boundary Disputes: China is involved in a complex dispute with Malaysia, Philippines, Taiwan, Vietnam, and possibly Brunei over the Spratly (Nansha) Islands in the South China Sea.

The 2002 “Declaration on the Conduct of Parties in the South China Sea” eased tensions but fell short of a legally binding code of conduct desired by several of the disputants. China also occupies the Paracel (Xisha) Islands, which are also claimed by Vietnam and Taiwan, and asserts a claim to the Japanese-administered Senkaku Islands (Diaoyu Tai) in the Pacific Ocean. Most of the mountainous and militarized boundary with India is in dispute, but Beijing and New Delhi have committed to begin resolution with discussions on the least disputed middle sector.

China’s de facto administration of the Aksai Chin section of Kashmir (which is disputed by India and Pakistan) is the subject of a dispute between China and India. India does not recognize Pakistan’s ceding lands to China in a 1964 boundary agreement. In October 2004, China signed an agreement with Russia on the delimitation of their entire 4,300-kilometer-long border, which had long been in dispute. Topography: Mountains cover 33 percent of China’s landmass, plateaus 26 percent, basins 19 percent, plains 12 percent, and hills 10 percent.

Thus, 69 percent of China’s land is mountains, hills, and highlands. China has five main mountain ranges, and seven of its mountain peaks are higher than 8,000 meters above sea level. The main topographic features include the Qingzang (Qinghai-Tibet) Plateau at 4,000 meters above sea level and the Kunlun, Qin Ling, and Greater Hinggan ranges. In the Himalaya Mountains, the world’s highest, are Mount Everest (known in China as Qomolangma) at 8,844. 4 meters (based on new official measurements) and K–2 at 8,611 meters, shared with Nepal and Pakistan, respectively.

The lowest inland point in China—the second lowest place in the world after the Dead Sea—is at Turpan Pendi, 140 kilometers southeast of Urumqi, the capital of Xinjiang Uygur Autonomous Region, at 154 meters below sea level. With temperatures that have reached 49. 6 C, it also ranks as one the hottest places in China. Principal Rivers: China has 50,000 rivers totaling some 420,000 kilometers in length and each having a catchment area of more than 100 square kilometers. Some 1,500 of these rivers each have catchment areas exceeding 1,000 square kilometers. Most rivers flow from west to east and empty into the Pacific Ocean.

The Yangzi (Changjiang or Yangzte River), which rises in Tibet, flows through Central China, and, having traveled 6,300 kilometers, enters the Yellow Sea near Shanghai. The Yangzi has a catchment area of 1. 8 million square kilometers and is the third longest river in the world after the Amazon and the Nile. The second longest river in China is the Huanghe (Yellow River), which also rises in Tibet and travels circuitously for 5,464 kilometers through North China before reaching the Bo Hai Gulf on the north coast of Shangdong Province. It has a catchment area of 752,000 square kilometers.

The Heilongjiang (Heilong or Black Dragon River) flows for 3,101 kilometers in Northeast China and an additional 1,249 in Russia, where it is known as the Amur. The longest river in South China is the Zhujiang (Pearl River), which is 2,214 kilometers long. Along with its three tributaries, the Xi, Dong, and Bei—West, East, and North—rivers, it forms the rich Zhujiang Delta near Guangzhou, Zhuhai, Macau, and Hong Kong. Other major rivers are the Liaohe in the northeast, Haihe in the north, Qiantang in the east, and Lancang in the southwest. Climate: Most of the country is in the northern temperate zone.

There are complex climatic patterns ranging from the cold-temperate north to the tropical south, with subarctic-like temperatures in the Himalaya Mountains, resulting in a temperature difference of some 400 C from north to south. Temperatures range from –300 C in the north in January to 280 C in the south in July. Annual precipitation varies significantly from region to region, with a high of 1,500 millimeters annually along the southeastern coast and a low of fewer than 50 millimeters in the northwest. There is an alternating wet monsoon in the summer and a dry monsoon in winter.

North China and southward are affected by the seasonal cold, dry winds from Siberia and the Mongolia Plateau between September/October and March/April. Summer monsoon winds bring warm and wet currents into South China and northward. Natural Resources: China has substantial mineral reserves and is the world’s largest producer of antimony, natural graphite, tungsten, and zinc. Other major minerals are bauxite, coal, crude petroleum, diamonds, gold, iron ore, lead, magnetite, manganese, mercury, molybdenum, natural gas, phosphate rock, tin, uranium, and vanadium.

With its vast mountain ranges, China’s hydropower potential is the largest in the world. Land Use: Based on 2005 estimates, 14. 86 percent (about 1. 4 million square kilometers) of China’s land is arable. About 1. 3 percent (some 116,580 square kilometers) is planted to permanent crops. With comparatively little land planted to permanent crops, intensive agricultural techniques are used to reap harvests that are sufficient to feed the world’s largest population and still have surplus for export.

An estimated 544,784 square kilometers of land were irrigated in 2004. Environmental Factors: The major current environmental issues in China are air pollution (greenhouse gases and sulfur dioxide particulates) from overreliance on coal, which produces acid rain; water shortages, particularly in the north; water pollution from untreated wastes; deforestation; an estimated loss of 20 percent of agricultural land since 1949 to soil erosion and economic development; desertification; and illegal trade in endangered species.

Deforestation has been a major contributor to China’s most significant natural disaster: flooding. In 1998 some 3,656 people died and 230 million people were affected by flooding. China’s national carbon dioxide (CO2) emissions are among the highest in the world and increasing annually. The CO2 emissions in 1991 were estimated at 2. 4 billion tons; by 2000 that level, according to United Nations (UN) statistics, had increased by 16 percent to nearly 2. 8 billion tons. According to the International Energy Agency (IEA), between 1990 and 2002 the increase was closer to 45 percent.

These amounts cited by the UN are more than double those of India and Japan but still less than half those of the United States (comparable figures for Russia are unavailable but estimated at probably half the level of China’s). China’s ozone depleting potential also is high but was decreasing in the early twenty-first century. The CO2 emissions are mostly produced by coal-burning energy plants and other coal-burning operations. Better pollution control and billion-dollar cleanup programs have helped reduced the growth rate of industrial pollution. Time Zone:

Although China crosses all or part of five international time zones, it operates on a single uniform time, China Standard Time (CST; Greenwich Mean Time plus eight hours), using Beijing as the base. China does not employ a daylight savings time system. 4. SOCIETY Population: China officially recognized the birth of its 1. 3 billionth citizen (not counting Hong Kong, Macau, or Taiwan) on January 5, 2005. U. S. Government sources put the population at an estimated 1,313,973,713 in July 2006. The annual population growth rate was estimated at 0. 59 percent (2006 estimate).

The nation’s overall population density was 135 persons per square kilometer in 2003. The most densely populated provinces are in the east: Jiangsu (712 persons per square kilometer), Shangdong (587 persons per square kilometer), and Henan (546 persons per square kilometer). Shanghai was the most densely populated municipality at 2,646 persons per square kilometer. The least densely populated areas are in the west, with Tibet having the lowest density at only 2 persons per square kilometer. Sixty-two percent of the population lived in rural areas in 2004, while 38 percent lived in urban settings.

About 94 percent of population lives on approximately 46 percent of land. Based on 2000 census data, the provinces with the largest populations were Henan (91. 2 million), Shandong (89. 9 million), Sichuan (82. 3 million, not including Chongqing municipality, which was formerly part of Sichuan Province), and Guangdong (85. 2 million). The smallest were Qinghai (4. 8 million) and Tibet (2. 6 million). In the long term, China faces increasing urbanization; according to predictions, nearly 70 percent of the population will live in urban areas by 2035. Demography:

China has been the world’s most populous nation for many centuries. When China took its first post-1949 census in 1953, the population stood at 582 million; by the fifth census in 2000, the population had almost doubled, reaching 1. 2 billion. China’s fast-growing population was a major policy matter for its leaders in the mid-twentieth century, so that in the early 1970s, the government implemented a stringent one-child birth-control policy. As a result of that policy, China successfully achieved its goal of a more stable and much-reduced fertility rate; in 1971 women had an average of 5. children versus an estimated 1. 7 children in 2004. Nevertheless, the population continues to grow, and people want more children. There is also a serious gender imbalance. Census data obtained in 2000 revealed that 119 boys were born for every 100 girls, and among China’s “floating population” (see Migration below) the ratio was as high as 128:100. These situations led Beijing in July 2004 to ban selective abortions of female fetuses. Additionally, life expectancy has soared, and China now has an increasingly aging population; it is projected that 11. percent of the population in 2020 will be 65 years of age and older. Based on 2006 estimates, China’s age structure is 0–14 years of age—20. 8 percent; 15–64 years—71. 4 percent, and 65 years and older—7. 7 percent. Estimates made in 2006 indicate a birthrate of nearly 13. 3 births per 1,000 and a death rate of 6. 9 per 1,000. In 2006 life expectancy at birth was estimated at 74. 5 years for women and 70. 9 for men, or 72. 6 years overall. The infant mortality rate was estimated at 23. 1 per 1,000 live births overall (25. 9 per 1,000 for females and 20. for males). Migration: In 2006 it was estimated that China was experiencing a –0. 39 per 1,000 population net migration rate. Of major concern in China is its growing “floating population” (liudong renkou ), a large number of people moving from the countryside to the city, from developed economic areas to underdeveloped areas, and from the central and western regions to the eastern coastal region, as a result of fast-paced reform-era economic development and modern agricultural practices that have reduced the need for a large agricultural labor force.

Although residency requirements have been relaxed to a degree, the floating population is not officially permitted to reside permanently in the receiving towns and cities. As early as 1994, it was estimated that China had a surplus of approximately 200 million agricultural workers, and the number was expected to increase to 300 million in the early twenty-first century and to expand even further into the long-term future. It was reported in 2005 that the floating population had increased from 70 million in 1993 to 140 million in 2003, thus exceeding 10 percent of the national population and accounting for 30 percent of all rural laborers.

According to the 2000 national census, population flow inside a province accounted for 65 percent of the total while that crossing provincial boundaries accounted for 35 percent. Young and middle-aged people account for the vast majority of this floating population; those between 15 and 35 years of age account for more than 70 percent. Other migration issues include the more than 2,000 Tibetans who cross into Nepal annually, according to the United Nations High Commissioner for Refugees (UNHCR).

The government tries to prevent this out-migration from occurring and has pressured Nepalese authorities to repatriate illegal border-crossing Tibetans. Another activity viewed as illegal is the influx of North Koreans into northeastern China. Some 1,850 North Koreans fled their country in 2004, but China views them as illegal economic migrants rather than refugees and sends many of them back. Some of those who succeed in reaching sanctuary in foreign diplomatic compounds or international schools have been allowed to depart for South Korea. Ethnic Groups:

Besides the majority Han Chinese, China recognizes 55 other nationality or ethnic groups, numbering about 105 million persons, mostly concentrated in the northwest, north, northeast, south, and southwest but with some in central interior areas. Based on the 2000 census, some 91. 5 percent of the population was classified as Han Chinese (1. 1 billion). The other major minority ethnic groups were Zhuang (16. 1 million), Manchu (10. 6 million), Hui (9. 8 million), Miao (8. 9 million), Uygur (8. 3 million), Tujia (8 million), Yi (7. 7 million), Mongol (5. 8 million), Tibetan (5. million), Bouyei (2. 9 million), Dong (2. 9 million), Yao (2. 6 million), Korean (1. 9 million), Bai (1. 8 million), Hani (1. 4 million), Kazakh (1. 2 million), Li (1. 2 million), and Dai (1. 1 million). Classifications are often based on self-identification, and it is sometimes and in some locations advantageous for political or economic reasons to identify with one group over another. All nationalities in China are equal according to the law. Official sources maintain that the state protects their lawful rights and interests and promotes equality, unity, and mutual help among them.

Languages: The official language of China is standard Chinese or Mandarin (Putonghua, which means standard speech, based on the Beijing dialect). Other major dialects are Yue (Cantonese), Wu (Shanghaiese), Minbei (Fuzhou), Minnan (Hokkien-Taiwanese), Xiang, Gan, and Hakka (Kejia). Because of the many ethnic groups in China, numerous minority languages also are spoken. All of the Chinese dialects share a common written form that has evolved and been standardized during two millennia and serves as a unifying bond amongst the Han Chinese.

The government has aggressively developed both shorthand Chinese and Pinyin (phonetic spelling) as ways to increase literacy and transliterate Chinese names. The Pinyin system was introduced in 1958 and was approved by the State Council in 1978 as the standard system for the romanization of Chinese personal and geographic names. In 2000 the Hanyu (Han language) Pinyin phonetic alphabet was written into law as the unified standard for spelling and phonetic notation of the national language. Religion: The traditional religions of China are Confucianism, Daoism, and Buddhism.

Confucianism is not a religion, although some have tried to imbue it with rituals and religious qualities, but rather a philosophy and system of ethical conduct that since the fifth century B. C. has guided China’s society. Kong Fuzi (Confucius in Latinized form) is honored in China as a great sage of antiquity whose writings promoted peace and harmony and good morals in family life and society in general. Ritualized reverence for one’s ancestors, sometimes referred to as ancestor worship, has been a tradition in China since at least the Shang Dynasty (1750–1040 B. C. ).

Estimates of the number of adherents to various beliefs are difficult to establish; as a percentage of the population, institutionalized religions, such as Christianity and Islam, represent only about 4 percent and 2 percent of the population, respectively. In 2005 the Chinese government acknowledged that there were an estimated 100 million adherents to various sects of Buddhism and some 9,500 and 16,000 temples and monasteries, many maintained as cultural landmarks and tourist attractions. The Buddhist Association of China was established in 1953 to oversee officially sanctioned Buddhist activities.

In 1998 there reportedly were 600 Daoist temples and an unknown number of adherents in China. According to the U. S. Department of State in 2005, approximately 8 percent of the population is Buddhist, approximately 1. 5 percent is Muslim, an estimated 0. 4 percent belongs to the government-sponsored “patriotic” Catholic Church, an estimated 0. 4 to 0. 6 percent belongs to the unofficial Vatican-affiliated Roman Catholic Church, and an estimated 1. 2 to 1. 5 percent is registered as Protestant. However, both Protestants and Catholics also have large underground communities, possibly numbering as many as 90 million.

Chinese government figures from 2004 estimate 20 million adherents of Islam in China, but unofficial estimates suggest a much higher total. Most adherents of Islam are members of the Uygur and Hui nationality people. The Falun Dafa (Wheel of Law, also called Falun Gong) quasi-religious movement based on traditional Chinese qigong (deep-breathing exercises) and Daoist and Buddhist practices and beliefs was established in 1992 and claimed 70 million to 100 million practitioners in China in the late 1990s.

Because of its perceived antigovernment activities, Falun Gong was outlawed in China in April 1999, and reportedly tens of thousands of its practitioners were arrested and sentenced to “reeducation through labor” or incarcerated in mental hospitals. The constitution grants citizens of the People’s Republic of China the freedom of religious belief and maintains that the state “protects normal religious activities,” but that no one “may make use of religion to engage in activities that disrupt public order, impair the health of citizens or interfere with the educational system of the state. ” Education and Literacy:

Education in China is the responsibility of the Ministry of Education. The population has had on average only 6. 2 years of schooling, but in 1986 the goal of nine years of compulsory education by 2000 was established. The education system provides free primary education for five years, starting at age seven, followed by five years of secondary education for ages 12 to 17. At this level, there are three years of middle school and two years of high school. The Ministry of Education reports a 99 percent attendance rate for primary school and an 80 percent rate for both primary and middle schools.

Since free higher education was abolished in 1985, applicants to colleges and universities compete for scholarships based on academic ability. Private schools have been allowed since the early 1980s. The United Nations Development Program reported that in 2003 China had 116,390 kindergartens with 613,000 teachers and 20 million students. At that time, there were 425,846 primary schools with 5. 7 million teachers and 116. 8 million students. General secondary education had 79,490 institutions, 4. 5 million teachers, and 85. 8 million students. There also were 3,065 specialized secondary schools with 199,000 teachers and 5 million students.

Among these specialized institutions were 6,843 agricultural and vocational schools with 289,000 teachers and 5. 2 million students and 1,551 special schools with 30,000 teachers and 365,000 students. In 2003 China supported 1,552 institutions of higher learning (colleges and universities) and their 725,000 professors and 11 million students. While there is intense competition for admission to China’s colleges and universities among college entrants, Beijing and Qinghua universities and more than 100 other key universities are the most sought after.

The literacy rate in China is 90. 9 percent, based on 2002 estimates. Health: Indicators of the status of China’s health sector can be found in the nation’s fertility rate of 1. 8 children per woman (a 2005 estimate) and an under-five-years-of-age mortality rate of 37 per 1,000 live births (a 2003 estimate). In 2002 China had nearly 1. 7 physicians per 1,000 persons and about 2. 4 beds per 1,000 persons in 2000. Health expenditures on a purchasing parity power (PPP) basis were US$224 per capita in 2001, or 5. 5 percent of gross domestic product (GDP). Some 37. percent of public expenditures were devoted to health care in China in 2001. However, about 80 percent of the health and medical care services are concentrated in cities, and timely medical care is not available to more than 100 million people in rural areas. To offset this imbalance, in 2005 China set out a five-year plan to invest 20 billion renminbi (RMB; US$2. 4 billion) to rebuild the rural medical service system composed of village clinics and township- and county-level hospitals. In 2004 health officials announced that China had some 120 million hepatitis B virus carriers.

Although not identified until later, China’s first case of a new, highly contagious disease, severe acute respiratory syndrome (SARS), occurred in Guangdong in November 2002, and within three months the Ministry of Health reported 300 SARS cases and five deaths in the province. By May 2003, some 8,000 cases of SARS had been reported worldwide; about 66 percent of the cases and 349 deaths occurred in China alone. By early summer 2003, the SARS epidemic had ceased. A vaccine was developed and first-round testing on human volunteers completed in 2004.

China, similar to other nations with migrant and socially mobile populations, has experienced increased incidences of human immunodeficiency virus/acquired immune deficiency syndrome (HIV/AIDS). Based on 2003 estimates, China is believed to have a 0. 1 percent adult prevalence rate for HIV/AIDS, one of the lowest rates in the world and especially in Asia. However, because of China’s large population, this figure converted in 2003 to some 840,000 cases (more than Russia but fewer than the United States and second in Asia to India), of whom 44,000 died. About 80 percent of those infected live in rural areas.

In November 2004, the head of the United Nations AIDS program (UNAIDS) cited China, along with India and Russia, as being on the “tipping point” of having small, localized AIDS epidemics that could turn into major ones capable of hindering the world’s efforts to stop the spread of the disease. In 2004 the Ministry of Health reported that its annual AIDS prevention funding had increased from US$1. 8 million in 2001 to US$47. 1 by 2003 and that, whereas treatment had been restricted to a few hospitals in major cities, treatment was becoming more widely available.

According to the study by the World Health Organization, China’s Ministry of Health, and UNAIDS, China had an estimated 650,000 people who were infected with HIV by the end of 2005. In the 2000–2002 period, China had one of the highest per capita caloric intakes in Asia, second only to South Korea and higher than countries such as Japan, Malaysia, and Indonesia. By 2002, 92 percent of the urban population and 68 percent of the rural population had access to an improved water supply, and 69 percent of the urban population and 29 percent of the rural population had access to improved sanitation facilities.

Welfare: In pre-reform China, the socialist state fulfilled the needs of society from cradle tograve. Child care, education, job placement, housing, subsistence, health care, and elder care were largely the responsibility of the work unit as administered through state-owned enterprises and agricultural communes and collectives. As those systems disappeared or were reformed, the “iron rice bowl” approach to social security changed. Article 14 of the constitution stipulates that the state “builds and improves a social security system that corresponds with the level of economic development. In 2004 China experienced the greatest decrease in its poorest population since 1999. People with a per capita income of less than 668 renminbi (RMB;US$80. 71) decreased 2. 9 million or 10 percent; those with a per capita income of no more than 924 RMB (US$111. 64) decreased by 6. 4 million or 11. 4 percent, according to statistics from the State Council’s Poverty Reduction Office. Social security reforms since the late 1990s have included unemployment insurance, medical insurance, workers’ compensation insurance, maternity benefits, communal pension funds, and individual pension accounts. . GOVERNMENT AND POLITICS Recent Political Developments President Hu’s first term was spent consolidating his position and proceeding with economic reform. But he recognised the potential for instability caused by the previous strong focus on promoting high growth as the overriding policy priority. Examples of the imbalances this has caused in society include: * wide income imbalances between rich, eastern coastal cities, and poorer inland cities * income differences between urban and rural dwellers – the average urban resident of Beijing earns around RMB 2000 a month (around ? 30), but 135 million people in China still live below the international poverty line of US$ 1 a day, and up to 500 million on US$ 2 a day * a collapse of the health insurance scheme, which means that 80% of all healthcare costs have to be paid in cash at the time of consumption * Inequalities between urban residents and migrant labourers who have moved to the cities.

Unable to transfer their official place of residence, they cannot access public services, including education for their children * rampant corruption by those in public office * 87,000 incidents of mass violence which took place in 2005, often provoked by land expropriations or lay-offs from state-owned enterprises. Under the slogan of a “harmonious society”, he is therefore promoting a range of policies in the health, education, environment and other fields which will address social inequality.

But these policies will not be allowed to compromise economic growth and reform. The 17th Party Congress of October 2007 provided President Hu with an opportunity to put his own stamp on the ideological agenda, advance his preferred candidates to senior positions and secure a political succession consistent with that programme. Whilst the “harmonious society” remained pre-eminent, Hu’s singular success was in having his theory of “scientific development” written into the Party Constitution.

This means that although economic development will remain the key goal, growth will be balanced and sustainable in order to address imbalances in society between the prosperous cities and the impoverished rural hinterland. Although this will require innovation in methodology, it will also be gradual and measured, not radical. This is indicative of Hu’s consensus building style, following neither those advocating continued economic reform at all costs, nor the so-called ‘new Left’ who have called for more focus on social issues.

Although “democracy” was mentioned over 50 times in President Hu’s speech, this was very much qualified as “democracy with Chinese characteristics” or “socialist democracy”. He alluded to novel methods to increase popular participation in politics to effect electoral reforms at grass roots levels, and even allow direct elections of Party officials in limited circumstances at local levels. Yet the driving purpose is to ensure the long term stability of one-party rule under the CCP.

The senior Party hierarchy after the 17th Congress may similarly represent consensus rather than a definitive Hu Jintao ‘stamp’. We have little doubt that the President has prevailed in placing his successor(s) at the peak of the Party to assume power in 2012, although this has been done in such a way to co-opt competing interests behind his overall programme. Political Structure China has all the structures a modern democratic state would expect to have, with in theory a separation of powers between the different functions of state similar to most western democracies.

But all structures are subordinate to the leadership of the CCP. * The Legislature: Key laws are passed by the National People’s Congress (NPC) and its Standing Committee. The NPC has around two thousand members, and only meets in full session for a fortnight every March. Outside that time, a Standing Committee of around three hundred members carries out business. The Chairman is Wu Bangguo. Members are “elected” from Provincial and Municipal People’s Congresses, who are in turn “elected” from People’s Congresses below them.

Only at the lowest level are members “elected” by the public, but from a very narrow slate of approved candidates. (NB see “Village elections” below). A handful of independents manage to get elected. The NPC also votes the executive into office. * The Executive: The Government is headed by Wen Jiabao, who is Premier. There are 4 Vice Premiers, 5 State Councillors, 28 Ministers, and 50 Offices, Institutions or Bureaux under the State Council or other Ministries. Between them they carry out all the functions of government, from health policy to water resources, to meteorology.

Two bodies many would not expect to be part of government are Xinhua, the news agency, and the State Administration of Religious Affairs, which are directly under the State Council. * The Judiciary: there are several levels of People’s Courts which hear both criminal and civil cases (though the majority of criminal cases are actually dealt with by the police as administrative cases). The People’s Procuratorate acts as an investigator and public prosecutor. Officially, the courts continue to be instruments of the ‘dictatorship of the proletariat’, and there is provision for political involvement in their judgements.

In the next layer down from central government, China has 22 provinces; 4 municipalities directly under the central government (Beijing, Tianjin, Shanghai and Chongqing); 5 autonomous regions (Tibet, Xinjiang, Inner Mongolia, Ningxia and Guangxi); and 2 Special Administrative Regions (Hong Kong and Macao). The full hierarchy of government is: * central government * province, municipality or autonomous region * prefecture or city * county or district * township * village (though see below). A province may contain within it autonomous counties or towns where there is a large ethnic minority population.

Each layer of government will have departments similar to those of central government; a Communist Party Committee; a People’s Congress; and a Political Consultative Committee. The head of government in each province is the Governor, but in practice the provincial Party Secretary is more powerful. Villages are now officially regarded as self-governing (and therefore not part of the formal government hierarchy). There are direct popular elections to village committees. They are responsible for providing some public services, and receive a budget from higher authorities to do so.

They have no revenue-raising powers of their own. The quality of the elections varies, but they are more or less free and fair. The Chinese People’s Political Consultative Conference (CPPCC) The Chinese People’s Political Consultative Conference (and its provincial and local off-shoots) brings together all permitted strands of political opinion and activity in China. It is not the legislature, but its main annual meeting comes just ahead of the NPC, and its views are officially fed into the NPC. Its Chairman is Jia Qinglin.

Its main components are: * China’s 8 political parties other than the Chinese Communist Party (known collectively as the ‘United Front’). They include the Revolutionary Committee of the Chinese Guomindang; the China Democratic League; and the China Democratic National Construction Association. They are small, and all accept in their constitutions the dominant position of the Communist Party. * Representatives of China’s “mass organisations”: the Communist Youth League, The All-China Federation of Trade Unions; the All China Women’s Federation; and 50 other organisations covering everything from film artists to religious organisations.

In the next layer down from central government, China claims 23 provinces (as it includes Taiwan); 4 municipalities directly under the central government (Beijing, Tianjin, Shanghai and Chongqing); 5 autonomous regions (Tibet, Xinjiang, Inner Mongolia, Ningxia and Guangxi Zhuang); and 2 Special Administrative Regions (Hong Kong and Macao). The full hierarchy of government is: * central government * province, municipality or autonomous region * prefecture or city * county or district * township * village (though see below).

A province may contain within it autonomous counties or towns where there is a large ethnic minority population. Each layer of government will have departments similar to those of central government; a People’s Congress; a Political Consultative Committee (and a Communist Party Committee). The head of government in each province is the Governor, but in practice the provincial Party Secretary is more powerful. Villages are now officially regarded as theoretically self-governing (and therefore not part of the formal government hierarchy).

There are direct popular elections to village committees. They are responsible for providing some public services, and receive a budget from higher authorities to do so. They have no revenue-raising powers of their own. The quality of the elections varies, but they are more or less free and fair. The Chinese People’s Political Consultative Conference (CPPCC) The Chinese People’s Political Consultative Conference (and its provincial and local off-shoots) brings together all permitted strands of political opinion and activity in China.

It is not the legislature, but its main annual meeting comes just ahead of the NPC, and its views are officially fed into the NPC. Its Chairman is Jia Qinglin. Its main components are: * China’s 8 political parties other than the Chinese Communist Party (known collectively as the ‘United Front’). They include the Revolutionary Committee of the Chinese Guomindang; the China Democratic League; and the China Democratic National Construction Association. They are small, and all accept in their constitutions the dominant position of the Communist Party. Representatives of China’s “mass organisations”: the Communist Youth League, The All-China Federation of Trade Unions; the All China Women’s Federation; and 50 other organisations covering everything from film artists to religious organisations. The Party The real power in the land is the Chinese Communist Party. Founded in 1921 and now with around 70 million members, it has ruled China exclusively since 1949. Party structures Hu Jintao is General Secretary of the Communist Party. He heads the Politburo, which has 24 full and 1 alternate members.

Nine members of the Politburo form a Politburo Standing Committee. They are the real government of China, and agree all major policies of the Party and government in the Standing Committee, using their positions elsewhere in government to implement them. Each member of the Politburo has a particular portfolio or government position, as follows (in order of precedence): Hu Jintao – President of China, Chair of the Central Military Commission Wu Bangguo – Chairman of the National People’s Congress

Wen Jiabao – Premier Jia Qinglin – Chair of the Chinese People’s Political Consultative Conference Xi Jinping – Vice President of China Li Keqiang, Hui Liangyu, Zhang Dejiang, Wang Qishan – Vice Premiers He Guoqiang – in charge of Party discipline Li Changchun – propaganda Zhou Yongkang – law and order The Party has a number of Departments, Committees and Leading Groups to formulate policy which often mirror government Ministries.

Notable ones are: * Party Central Committee: the national Party committee, which meets once a year in the autumn, and has around 300 members  * The Central Military Commission: which is in effect the same thing as the state Central Military Commission, and therefore runs the armed forces  * The Commission for Discipline Inspection: responsible for fighting corruption among Party members  *  General Office and Central Bodyguards Bureau: which control access to the President  *  Organisation Department: in charge of personnel policy and appointments  *  Propaganda (or Publicity) Department  United Front Work Department: manages relations with other political parties, religious organisations and other non-Party organisations  *  International Liaison Department: manages relations with political parties in other countries. Leadership At the lowest levels there is a limited amount of democracy within the Party. Branch committees are elected from their members. At the highest level, the Party is effectively a self-perpetuating oligarchy. The outgoing Politburo Standing Committee selects its successor and members of the Politburo. Officially the Politburo and its Standing Committee are appointed at the

Party Congress every five years. The next Party Congress will take place in Autumn 2012. 6. ECONOMY GDP: US $6. 9trn (est. ) (2011) GDP per capita: Int’l $8,394 per capita (2011 – source: IMF) Annual Growth: 9. 2% (est. ) (2011) Consumer prices: 4. 8% (est. ) (2011) Exchange rate: 10. 4 Renminbi = ? 1 (2011 average exchange rate) China has been one of the world’s economic success stories since reforms began in 1978. China is the world’s second biggest economy. Official figures show that GDP has grown on average by 10% a year over the past 30 years with an estimate of 9. 2% recorded for 2011.

The current growth model, and policy underlying it, remains heavily skewed towards exports and investment, with little emphasis on private consumption. China has started to adjust its economic policies to better promote sustainable growth. The Government has highlighted its intention to: * undertake more banking reform (and encourage banks to provide finance to rural areas and smaller firms)  * develop the capital markets (so firms can more easily raise finance) * further reform of the insurance sector to expand the options available to consumers and  * provide a sounder regulatory structure aimed at promoting financial integration.

A growing share of China’s economic growth has been generated in the private sector as the government has opened up industries to domestic and foreign competition, though the role of the state in ownership and planning remains extensive. China’s entry into the World Trade Organisation in December 2001 is further integrating China into the global economy. Gross Domestic Product (GDP)/Purchasing Power Parity (PPP): In 2005 China had a GDP of US$2. 2 trillion. China’s PPP was estimated for 2005 at nearly US$8. 9 trillion. PPP per capita in 2005 was estimated at US$6,800.

Based on official Chinese data, the estimated GDP growth rate for 2005 was 9. 9 percent. Government Budget: The state budget for 2004 was US$330. 6 billion in revenue and US$356. 8 billion in expenditures. In the revenue column, 95. 5 percent was from taxes and tariffs, 54. 9 percent of which was collected by the central government and 45 percent by local authorities. The expenditures were for culture, education, science, and health care (18 percent); capital construction (12 percent); administration (14 percent); national defense (7. percent); agriculture, forestry, and water conservancy (5. 9 percent); subsidies to compensate for price increases (2. 7 percent); pensions and social welfare (1. 9 percent); promotion of innovation, science, and technology (4. 3 percent); operating expenses of industry, transport, and commerce (1. 2 percent); geological prospecting (0. 4 percent), and other (31. 9 percent). The overall budget deficit in 2004 was approximately US$26 billion, an amount equivalent to about 1. 5 percent of gross domestic product (GDP). Inflation:

China’s annual rate of inflation averaged 6 percent per year during the 1990–2002 period. Although consumer prices declined by 0. 8 percent in 2002, they increased by 1. 2 percent in 2003. China’s estimated inflation rate in 2005 was 1. 8 percent. Special and Open Economic Zones: As part of its economic reforms and policy of opening to the world, between 1980 and 1984 China established special economic zones (SEZs) in Shantou, Shenzhen, and Zhuhai in Guangdong Province and Xiamen in Fujian Province and designated the entire island province of Hainan a special economic zone.

In 1984 China opened 14 other coastal cities to overseas investment (listed north to south): Dalian, Qinhuangdao, Tianjin, Yantai, Qingdao, Lianyungang, Nantong, Shanghai, Ningbo, Wenzhou, Fuzhou, Guangzhou, Zhanjiang, and Beihai. Then, beginning in 1985, the central government expanded the coastal area by establishing the following open economic zones (listed north to south): Liaodong Peninsula, Hebei Province (which surrounds Beijing and Tianjin), Shandong Peninsula, Yangzi River Delta, Xiamen-Zhangzhou-Quanzhou Triangle in southern Fujian Province, Zhujiang (Pearl River) Delta, and Guangxi Zhuang Autonomous Region.

In 1990 the Chinese government decided to open the Pudong New Zone in Shanghai to overseas investment, as well as more cities in the Yangzi River Valley. Since 1992 the State Council has opened a number of border cities and all the capital cities of inland provinces and autonomous regions. In addition, 15 free-trade zones, 32 state-level economic and technological development zones, and 53 new- and high-tech industrial development zones have been established in large and medium-sized cities.

As a result, a multilevel diversified pattern of opening and integrating coastal areas with river, border, and inland areas has been formed in China. Agriculture, Forestry, and Fishing: China traditionally has struggled to feed its large population. Even in the twentieth century, famines periodically ravaged China’s population. Great emphasis has always been put on agricultural production, but weather, wars, and politics often mitigated good intentions. With the onset of reforms in the late 1970s, the relative share of agriculture in the gross domestic product (GDP) began to increase annually.

Driven by sharp rises in prices paid for crops and a trend toward privatization in agriculture, agricultural output increased from 30 percent of GDP in 1980 to 33 percent of GDP by 1983. Since then, however, agriculture has decreased its share in the economy at the same time that the services sector has increased. By 2004 agriculture (including forestry and fishing) produced only 15. 2 percent of China’s GDP but still is huge by any measure. Some 46. 9 percent of the total national workforce was engaged in agriculture, forestry, and fishing in 2004.

According to United Nations statistics, China’s cereal production is the largest in the world. In 2003 China produced 377 million tons, or 18. 1 percent of total world production. Its plant oil crops—at 15 million tons in 2003—are a close second to those of the United States and amounted to 12. 6 percent of total world production. More specifically, China’s principal crops in 2004 were rice (176 million tons), corn (132 million tons), sweet potatoes (105 million tons), wheat (91 million tons), sugarcane (89 million tons), and potatoes (70 million tons).

Other grains, such as barley, buckwheat, millet, oats, rye, sorghum, and tritcale (a wheat-rye hybrid), added substantially to overall grain production. Crops of peanuts, rapeseed, soybeans, and sugar beets also were significant, as was vegetable production in 2004. Among the highest levels of production were cabbages, tomatoes, cucumbers, and dry onions. In 2004 fruit production also became a significant aspect of the agricultural market. China produced large crops of watermelons, cantaloupes, and other melons that year. Other significant orchard products were apples, citrus fruits, bananas, and mangoes.

China, a nation of numerous cigarette smokers, also produced 2. 4 million tons of tobacco leaves. Fertilizer use was a major contributor to these abundant harvests. In 2002 China consumed 25. 4 million tons of nitrogenous fertilizers, or 30 percent of total world consumption and more than double the consumption of other major users such as India and the United States in the same period. Among the less used fertilizers, China also was a leader. It consumed 9. 9 million tons of phosphate fertilizers (29. 5 percent of the world total) and 4. 2 million tons of potash fertilizers (18. percent of the world total). With China’s accession to the World Trade Organization (WTO) in 2001, food export opportunities have developed that have brought about still more efficient farming techniques. As a result, traditional areas such as grain production have decreased in favor of cash crops of vegetables and fruit for domestic and export trade. China’s livestock herds are the largest in the world, far outstripping all of Europe combined and about comparable in size to all African nations combined. For example, in 2003 China had 49. 1 percent of the world’s pigs, 22. percent of the world’s goats, and 7. 5 percent of the world’s cattle. Converted into food production, China’s major livestock products in 2004 were pork (47. 2 million tons), poultry eggs (28. 0 million tons), cow’s milk (18. 5 million tons), poultry meat (13. 4 million tons), and beef and veal (6. 4 million tons). Other meats of significant amounts were mutton, lamb, and goat. Major by-products were cattle hides (1. 6 million tons), sheepskins (321,000 tons), and goatskins (375,000 tons). Honey (300,000 tons) and raw silk (95,000 tons) also were major products destined for the commercial market.

Forestry products, measured in annual roundwood production, also abound. In 2004 China produced an estimated 284 million cubic meters of roundwood, the world’s third largest supplier after the United States and India, or about 8. 5 percent of total world production. From the roundwood, some 11. 3 million cubic meters of sawnwood are produced annually. China also leads the world in fish production. In 2003 it caught 16. 7 million tons of fish, far out catching the second-ranked nation, the United States, with its 4. 9 million tons.

Aquaculture also was substantial in world terms. In the same year, China harvested 28. 8 million tons of fish, an amount more than 10 times that of the second-ranked nation, India, which produced 2. 2 million tons. The total fish production in 2003 was 45. 6 million tons. Of this total, 63. 2 percent was from aquaculture, an increasing sector, and 36. 7 percent from fish caught in rivers, lakes, and the sea. Mining and Minerals: Mineral resources include large reserves of coal and iron ore, plus adequate to abundant supplies of nearly all other industrial minerals.

Besides being a major coal producer, China is the world’s fifth largest producer of gold and in the early twenty-first century became an important producer and exporter of rare metals needed in high-technology industries. The rare earth reserves at the Bayan Obi mine in Inner Mongolia are thought to be the largest in any single location in the world. Outdated mining and ore-processing technologies are being replaced with modern techniques, but China’s rapid industrialization requires imports of minerals from abroad.

In particular, iron ore imports from Australia and the United States have soared in the early 2000s as steel production rapidly outstripped domestic iron ore production. The major areas of production in 2004 were coal (nearly 2 billion tons), iron ore (310 million tons), crude petroleum (175 million tons), natural gas (41 million cubic meters), antimony ore (110,000 tons), tin concentrates (110,000 tons), nickel ore (64,000 tons), tungsten oncentrates (67,000 tons), unrefined salt (37 million tons), vanadium (40,000 tons), and molybdenum ore (29,000 tons).

In order of magnitude, bauxite, gypsum, barite, magnesite, talc and related minerals, manganese ore, fluorspar, and zinc also were important. In addition, China produced 2,450 tons of silver and 215 tons of gold in 2004. The mining sector accounted for less than 0. 9 percent of total employment in 2002 but produced about 5. 3 percent of total industrial production. Industry and Manufacturing: Industry and construction produced 53. 1 percent of China’s gross domestic product (GDP) in 2005. Industry (including mining, manufacturing, construction, and power) contributed 52. percent of GDP in 2004 and occupied 22. 5 percent of the workforce. The manufacturing sector produced 44. 1 percent of GDP in 2004 and accounted for 11. 3 percent of total employment in 2002. China is the world’s leading manufacturer of chemical fertilizers, cement, and steel. Prior to 1978, most output was produced by state-owned enterprises. As a result of the economic reforms that followed, there was a significant increase in production by enterprises sponsored by local governments, especially townships and villages, and, increasingly, by private entrepreneurs and foreign investors.

By 2002 the share in gross industrial output by state-owned and state-holding industries had decreased to 41 percent, and the state-owned companies themselves contributed only 16 percent of China’s industrial output. An example of an emerging heavy industry is automobile manufacture, which has soared during the reform period. In 1975 only 139,800 automobiles were produced annually, but by 1985 production had reached 443,377, then jumped to nearly 1. 1 million by 1992 and increased fairly evenly each year up until 2001, when it reached 2. 3 million.

In 2002 production rose to nearly 3. 3 million and then jumped again the next year to 4. 4 million. Domestic sales have kept pace with production. After respectable annual increases in the mid- and late 1990s, sales soared in the early 2000s, reaching 3 million automobiles sold in 2003. With some governmental controls in place, sales dipped to 2. 4 million sold in 2004. Some forecasters expect sales to reach 6. 9 million by 2015. By 2010 China’s automobile production is projected to reach 9. 4 million, and the country could become the number-one automaker in the world by 2020.

So successful has China’s automotive industry been that it began exporting car parts in 1999. China began to plan major moves into the automobile and components export business starting in 2005. A new Honda factory in Guangzhou was being built in 2004 solely for the export market and was expected to ship 30,000 passenger vehicles to Europe in 2005. By 2004, 12 major foreign automotive manufacturers had joint-venture plants in China. They produced a wide range of automobiles, minivans, sport utility vehicles, buses, and trucks. In 2003 China exported US$4. billion worth of vehicles and components, an increase of 34. 4 percent over 2002. By 2004 China had become the world’s fourth largest automotive vehicle manufacturer. Concomitant with automotive production and other steel-consuming industries, China has been rapidly increasing its steel production. Iron ore production kept pace with steel production in the early 1990s but was soon outpaced by imported iron ore and other metals in the early 2000s. Steel production, an estimated 140 million tons in 2000, was expected to reach more than 350 million tons a year by 2010.

Energy: As with other economic categories, China is a major producer and consumer of energy resources. In 2002, the most recent year available for United Nations statistics, China produced 934. 2 million tons of oil equivalents and consumed 889. 6 million tons. Per capita consumption was 687 kilograms, only a quarter of North Korea’s estimated consumption, a third of that in Hong Kong, and well below the average for Asia. China’s energy consumption has risen dramatically since the inception of its economic reform program in the late 1970s.

Electric power generation—mostly by coal-burning plants—has been in particular demand; China’s electricity use in the 1990s increased by between 3 percent and 7 percent per year. In 2003 electricity use increased by 15 percent over the previous year, and supplies could not keep up with demand, thus slowing economic development. Government statistics indicate that the overall demand for electric power for 2004 was projected to be around 2 trillion kilowatt-hours, but by June of that year a 60-b

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