1. The Fundamental Dynamics of the Chinese Economy main DYNAMICS Ramazan TAŞ TURGUT ÖZAL UNIVERSITY USAK * ANKARA* 2012 rtas@turgutozal.edu.tr

2. DYNAMIC 1 THE BIGGEST POPULATION, THE BIGGEST MARKET CHINA IS WORLD’S BIGGEST MARKET FULL OF SKILLS AND DEMAND 1 CHINA > 2,5 EU (500 Million) 1 CHINA > 4 US (300 Million) WORLD’S BIGGEST LABER MARKET FULL OF SKILLS MINIMIZE COSTS, STIMULATES SUPPLY SIDE OF ECONOMY WORLD’S BIGGEST CONSUMER MARKET FULL OF POTANTIAL OPTIMIZE SCALES, STIMULATES DEMAND SIDE OF ECONOMY Ramazan TAS * 2012 * rtas@turgutozal.edu.tr 2

3. DYNAMIC 1 THE BIGGEST POPULATION, THE BIGGEST MARKET Ramazan TAS * 2012 * rtas@turgutozal.edu.tr 3 POPULATION 1978199020002011 POPULATION 962 Million1,14 Billion 1,27 Billion1,35 Billion URBAN (%)18263651 RURAL (%)827464 49 POPOLATION GROWTH RATE %012%014%08%05 GDP ( Billion Yuan) GDP (Billion US Dollar) PER CAPITA INCOME (Yuan) PER CAPITA INCOME (US Dollar) 38116447858 47,156 6,736 35000 5000 SOURCE National Bureau of Statistics of China

4.  DYNAMIC 2 DOUBLE DIGIT GROWTH PERFORMANCE FOR 33 YEARS OVERCOMING ALL OF PAST ASIAN AND CURRENT EUROPEAN CRISIS CHINA IS THE FASTEST GROWING ECONOMY IN THE WORLD FOR 33 YEARS CONTINUOUSLY AT AVERAGE 10 % AVERAGE ANNUAL GROWTH RATE 1979-2009 1991-2009 2001-2009 2010 2011 GDP 9,9 10,5 10,5 10,2 9,2 SOURCE: National Bureau of Statistics of China Ramazan TAS * 2012 * rtas@turgutozal.edu.tr 4

5. DYNAMIC 3 MORE INVEST LESS CONSUME IS THE MAIN SOURCES OF WORLD RECORD GROWTH PERFORMANCE CHINESE ECONOMY’S HIGH SPEED GROWTH DEPENDS ON HIGH RECORD DOMESTIC SAVING AND INVESTMENT NOT FOREIGN CAPITAL AND CONSUMPTION IN 2009, ALMOST ALL OF THE GROWTH CAME FROM INVESTMENT Ramazan TAS * 2012 * rtas@turgutozal.edu.tr 5 SOURCES OF GDP GROWTH 1978199020002009 FINAL CONSUMPTION39,647,865,145,4 GROSS CAPITAL FORMATION 66,050,422,495,2 NET EXPORTS- 5,41,912,5- 40,6 SOURCE National Bureau of Statistics of China

6. DYNAMIC 3 MORE INVEST LESS CONSUME IS THE MAIN SOURCES OF WORLD RECORD GROWTH PERFORMANCE CHINA INVESTS 66 % OF GDP TO STIMULATE HIGH RECORD GROWTH Ramazan TAS * 2012 * rtas@turgutozal.edu.tr 6 INVESTMENT IN FIXED ASSETS 199020002009 Investment in Fixed Assets to GDP (%) 24,233,266,0 Urban (%) 72,579,786,3 Rural (%) 27,520,313,7 SOURCE National Bureau of Statistics of China

7. DYNAMIC 3 MORE INVEST LESS CONSUME IS THE MAIN SOURCES OF WORLD RECORD GROWTH PERFORMANCE CHINA FINANCES HIGH RECORD INVESTMENT WITH SELF-RAISING FUNDS NOT STATE BUDGET Ramazan TAS * 2012 * rtas@turgutozal.edu.tr 7 COMPOSITION OF FUNDING SOURCES OF INVESTMENT IN FIXED ASSETS (%) 1981 199020002009 State Budget 28,1 8,76,45,1 Domestic Loans 12,7 19,620,315,7 Foreign Investment 3,8 6,35,11,8 Self-raising Funds 55,4 65,468,277,4 SOURCE National Bureau of Statistics of China

8. DYNAMIC 4 STIMULATE SCIENCE AND TECHNOLOGY INVESTMENT ON R&D IS ONE OF THE MAIN SOURCES OF WORLD RECORD GROWTH PERFORMANCE CHINA DOUBLLED ITS R&D EXPENDITURE IN 10 YEARS Ramazan TAS * 2012 * rtas@turgutozal.edu.tr 8 R&D 20002009 R&D Expenditure as Percentage of GDP (%) 0,901,70 COMPOSITION OF INTRAMURAL EXPENDITURE ON R&D (%) Basic Research 5,24,6 Applied Research 17,012,5 Experimental Development 77,8 82,9 SOURCE National Bureau of Statistics of China

9. DYNAMIC 5 DEEPENING INDUSTRILIZATION VERSUS DE-INDUSTRILIZATION IS THE MAIN SOURCES OF WORLD RECORD GROWTH PERFORMANCE CHINESE ECONOMY’S HIGH SPEED GROWTH DEPENDS ON THE MOST DYNAMIC INDUSTRIAL SECTOR OF THE WORLD MAKING CHINA WORLD’S GLOBAL FACTORY Ramazan TAS * 2012 * rtas@turgutozal.edu.tr 9 SECTORAL SOURCES OF GDP GROWTH (%) 199020002009 AGRICULTURE41,74,44,5 INDUSTRY41,060,852,5 SERVICES17,334,842,9 SOURCE National Bureau of Statistics of China

10. DYNAMIC 5 DEEPENING INDUSTRILIZATION VERSUS DE-INDUSTRILIZATION FROM 1978 TO 2012 INDUSTRY INCREASED 28 TIMES, PER CAPITA GDP INCREASED 13 TIMES AGRCULTURE ONLY INCREASED 4 TIMES IF CHINESE ECONOMY WAS AN AGRICULTUREL ECONOMY, PER CAPITA INCOME WOULD RAISE 4 TIMES ONLY INSTEAD OF 28 TIMES, SO PER CAPITA INCOME WOULD BE LESS 7 TIMES THAN NOW (700 INSTEAD OF 5000 US DOLARS) Ramazan TAS * 2012 * rtas@turgutozal.edu.tr 10 INDICES OF CONSTANT PRICES 19782009 GDP 1001863 AGRICULTURE 100402 SERVICE 1002516 INDUSTRY 100 2850 PER CAPITA INCOME (Yuan) 1001337 SOURCE National Bureau of Statistics of China

11. DYNAMIC 5 DEEPENING INDUSTRILIZATION VERSUS DE-INDUSTRILIZATION OF US AND EU CHINESE ECONOMY’S HIGH SPEED GROWTH DEPENDS ON THE MOST DYNAMIC INDUSTRIAL SECTOR OF THE WORLD MAKING CHINA WORLD’S GLOBAL FACTORY AND MANUFACTURER AVERAGE ANNUAL GROWTH RATE 1979-2009 1991-20092001-2009 2011 AGRICULTURE 4,6 4,0 4,2 4,5 INDUSTRY 11,4 12,5 11,4 10,6 SERVICES SOURCE 11,0 10,7 11,4 8,9 NATIONAL BUREAU OF STATISTICS OF CHINA Ramazan TAS * 2012 * rtas@turgutozal.edu.tr 11

12. DYNAMIC 6 MAKE INDUSTRY LEADER SECTOR OF THE ECONOMY INDUSTRY PRODUCES A HALF OF THE TOTAL OUTPUT INDUSTRY SPILLS POSITIVE EFFECTS ALL OVER THE ECONOMY INDUSTRY IS THE LEADER SECTOR OF THE ECONOMY INDUSTRY MAKES UP ABOUT HALF OF THE TOTAL ECONOMY Ramazan TAS * 2012 * rtas@turgutozal.edu.tr 12 COMPOSITION OF GDP (%) 1978199020002011 AGRICULTURE28,227,115,110,1 INDUSTRY47,941,345,946,8 SERVICES23,931,639,043,1 SOURCE National Bureau of Statistics of China

13. DYNAMIC 7 DIVERSIFY INDUSTRY DINAMIC AND DIVERSE INDUSTRY RESPONDS UNEXPECTED WORLD DEMAND CHANGES JUST IN TIME Ramazan TAS * 2012 * rtas@turgutozal.edu.tr 13 GROWTH OF VALUE-ADDED OF INDUSTRY (%) 2011 Manufacture of Nonmetal Mineral Products18,4 Manufacture of General Purpose Machinery 17,4 Manufacture of Telecommunications Equipment, Computers15,9 Manufacture of Chemical Raw Material and Products 14,7 Manufacture of Transport Equipment 12,0 Production and Supply of Electric Power and Heat Power 10,1 Smelting and Pressing of Ferrous Metals 9,7 Manufacture of Textile 8,3 SOURCE: National Bureau of Statistics of China

14. DYNAMIC 8 MAKE ECONOMY EXPORT ORIENTED CHINA IS THE EXPORT LEADER OF THE WORLD Ramazan TAS * 2012 * rtas@turgutozal.edu.tr 14 COMPOSITION OF TRADE (USD Billion) 1978199020002011 Total Value of Exports and Imports 21 115474 3,642 Exports 9,7 62,1 249,2 1,899 Imports 10,9 53,4 225,1 1,743 Total Value of Imports and Exports to GDP (%) 9,729,839,6 SOURCE National Bureau of Statistics of China

15. THANK YOU FOR YOUR KIND ATTENTION AND CONTRIBUTION… Ramazan TAS * 2012 * rtas@turgutozal.edu.tr 15