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China Economic Overview
- In 2011, China's official GDP reached $7.49 trillion.
- 2011 GDP growth rate 9.2%
- Inbound foreign direct investment was approximately $116 billion.
- Agriculture, traditionally the largest portion of GDP, was eclipsed by both the manufacturing industry and the service industry in 2011. Composition by Sector: Agriculture: 10.1%; Industry: 46.8%; Services: 43.1%
- China's imports are increasing exponentially
1978 - USD $10.83 billion spent on imports
2011 - USD $1.75 trillion spent on imports, an increase of 24.9% from 2010
- In 2010, China's urban population was 47% of the total population, with an annual rate of urbanization of 2.3%. By the end of 2011, over 690.79 million Chinese lived in urban centers.
- Urbanization is expected to boost domestic demand by USD $4.5 trillion over the next two decades.
- Beijing, Shanghai, and Hong Kong are listed among the "World's Top 10 Cities of the Super Rich."
- China's middle class has grown from 65.5 million in January 2005 to 80 million in January 2007. According to the UN Population Division, China's middle class is forecast to expand to 1.4 billion by 2030, compared to 365 million in the US.
China's Consumer Market:
- As China's GDP has increased exponentially over the past 25 years, so have real wages. Even with increasing wages, China still maintains one of the lowest manufacturing overhead costs in Asia.
- Increase in wealth is fueling the growth of a sophisticated middle class of consumers and an increase in disposable income.
- Consumer spending:
Automobiles - 1,000 new cars hit the road in Beijing every day.
Electronics - China is one of the world's largest consumers of cell phones, computers, and other personal electronic devices.
Imported Foods - China is now the 5th largest importer of wine even though wine does not play a major role in Chinese cuisine as it does in Western cuisine.
- China is now the world's second largest importer of luxury goods after Japan. In the next five years, China's projected annual consumption of luxury goods will exceed $14.6 billion, surpassing Japan.
- By 2015, China is forecast to become the second largest consumer market in the world after the US.
Opportunities for US Companies:
- China is the US's 3rd largest trading partner behind Canada and Mexico at 103.9 billion in 2011.
- Growth in US Exports to China 54.2% since 2000 ( rest of world: 80%).
- However, the US is only China's 5th largest source of imports after the EU, Japan, South Korea, and Taiwan.
- US export growth to China between 2000-2011 was 54.2%
- More and more US companies manufacture in China to sell to China instead of exporting.
- China currently has enough purchasing power to buy 5% of the world's products, but that figure is projected to grow to 14% by 2015.
- E-commerce is expanding rapidly. In 2011, China's e-commerce revenue reached $947.4 billion, a 33% increase over 2010.