Doing Business in China: Ten Things You Should Know About the Chinese Economy
The country's growth rate has slowed, and this worries economists. But China still has much to boast about in terms of production.
By: Oasis Team
After more than twenty years in which its growth rates never fell below double digits, the Chinese economy this year may grow "only" 7,5%. According to international analysts, this is not good news for anyone: the Chinese public debt alone (which the government ordered an audit of on July 29th) not supported by GDP (gross domestic product) growth could trigger a global financial crisis. Of course, no one can say for sure that this will happen. But in the coming months, the upheavals in the Chinese economy could make the front pages of newspapers in that country and also in our newspapers.
Ten facts that lead to reflection.
1. A GDP multiplied by ten
From 1978 to the present day, China's GDP has increased tenfold, making it the second largest economy in the world after the United States. Experts are convinced that by 2020 the economic power of the Asian nation will surpass that of the United States.
2. The new "owners" of the USA are... Chinese.
China holds $1.200 trillion in T-bonds, the equivalent of US Treasury bonds, which corresponds to about 10% of the entire US public debt. Furthermore, approximately 80% of the suppliers to the Walmart supermarket chain, the most popular among Americans, are Chinese.
3. Rich and poor
More than 135 million Chinese people have an income below the poverty level. That's more than 10% of the country's entire population.
According to the Hurun Wealth Report, one in every 1.300 Chinese people owns more than one million dollars. Nationwide, there are 1.2 million wealthy individuals, and of these, approximately 63.500 have personal assets exceeding 13 million dollars.
4. A desire for fresh air, computers, and cell phones.
China produces 80 air conditioning units for every thousand people in its population. The average in the rest of the world is only 4,8 units per thousand people. Computer production currently totals 283 per thousand people (compared to 5,9 computers in the rest of the world). The country also remains unbeatable in mobile phone production: China Mobile is the world's largest provider of mobile phone services, with a total of 558,9 million subscribers. The country produces 841 mobile phones for every thousand people (compared to only 83,6 devices per thousand people in the rest of the world).
5. Long live the pig!
The pig is a highly prized animal in China. It appears stylized in various ideograms and is even part of the Chinese zodiac system. But above all, this animal is the basic ingredient in many local cuisines. China produces 51,5 million tons of pork annually: about 50% of the entire world production.
6. The homeland of the only son
Despite its workforce having been able to produce surprising results over the past twenty years, the Chinese government seeks to limit population growth through a strict one-child policy. Chinese families are not allowed to have more than one child. The law is very strict on this matter, and it appears that – according to surveys – this policy is approved by 75% of the population.
7. The countryside wins over the city.
According to some studies, by 2015 the Chinese urban population is expected to reach 700 million people. But this currently represents only 43% of the country's total population. The majority of China's inhabitants continue to live in rural areas, where extreme poverty, lack of water, and inadequate transportation are commonplace.
8. The Cement Fever
The real estate boom has led the country to produce 60% of the world's cement, transforming vast areas of the Chinese urban landscape overnight. However, some newly built skyscrapers are already at risk. In March of this year, for example, an investigative commission discovered that in the city of Shenzhen, some construction companies had used poor-quality cement, sold below cost, seriously jeopardizing the stability of at least 15 buildings.
9. A giant housing bubble... of empty houses.
It is estimated that there are currently 64 million empty houses in China. The accumulation of these has created veritable ghost cities in certain areas. But construction continues, and it is predicted that by around 2025 there will be enough buildings in the country to house the populations of 10 New Yorks.
10. Christmas in China
China is considered the world's factory today: among the many things it produces are Christmas trees and decorations. It is estimated that 85% of these products are manufactured in the country. And almost all of them are exported, since Christmas traditions are not part of Chinese culture...