The Setting: Economic

Mythbusters Trivia China’s currency is the…? a) Yen b) Renminbi c) Yuan d) Both b and c

What is China’s currency? Answer: d) both b and c China’s currency is called the Renminbi or Yuan Since February 2009, the Yuan has been appreciating versus the Canadian dollar The current exchange rate is _____ CAD/CNY

China: An Economic Powerhouse GDP (exchange rate based): –$4.758 trillion (in 2009 USD) –3 rd highest in the world after the EU and US GDP per capita: –$6,500 (in 2009 USD) –127 th in the world –Increasing trend: $6,100 in 2008 and $5,600 in 2007 GDP real growth rate: –8.4% (2009 est.) –5 th highest in the world –Decreasing trend: 9% in 2008 and 13% in 2007

GDP and Labour Force by Sector SectorAgricultureServicesIndustry GDP10.9%40.5%48.6% Labour Force39.5%33.2%27.2%

Labour Force million people (2009 est.) - Largest labour force in the world! Unemployment Rate - 4.3% (2009 est.) - Increased from 4.2% in Note: data are for urban areas only; including migrants may boost total unemployment to 9% since high unemployment in rural areas Labour Force & Unemployment

Exports/Imports Exports - $1.194 trillion 2 nd largest exporter in the world Electrical and other machinery, data processing equipment, apparel, textiles, iron and steel, optical and medical equipment Imports - $921.5 billion 4 th largest importer in the world Electrical and other machinery, oil and mineral fuels, optical and medical equipment, metal ores, plastics, organic chemicals

Mythbusters Trivia China is one of the…? a) SAARC countries b) Emergers c) Four Asian Tigers d) BRIC countries

China is one of the…? Answer: d) BRIC countries The term “BRIC” was invented by Goldman Sachs in 2001 to refer to the rapidly-developing, emerging economies of Brazil, Russia, India and China. Given their population and geographic size, the BRICs may become the world’s dominant economies by The BRICs have been seeking to form an “alliance” - they held their first summit on June 16, 2009

Why China? China is the 3 rd largest economy in the world after the EU and the US – why? -Largest labour force in world -Increased foreign trade and investment -Large investment in education and technology -Urbanization -Economic reforms since the 1970s…

Economic Reforms Since the 1970s: - Changed from strict centrally planned system to flexible market oriented system -Phased out collectivized agriculture -Gradual liberalization of prices -Fiscal decentralization -Increased autonomy for state enterprises -Foundation of a diversified banking system -Development of stock markets -Rapid growth of the non-state sector -Policies allowing foreign trade and investment

The Result… Largest reduction of poverty ever seen in history One of the fastest increases in income levels ever seen Average economic growth of over 9.5% for the past 26 years Is it sustainable?

Is it Sustainable? Current issues facing Chinese government: –Aging labour force (due in large part to “one child” policy) –Strengthening its social safety net including pension and health system –Sustaining job growth needed for migrants, new entrants to the workforce, and workers laid off from state-owned enterprises –Reducing corruption and economic crimes –Managing environmental damage and social issues due to rapid economic growth