china's economic rise - Wayne Morrison
China’s Economic Rise: History, Trends,
Challenges, and Implications for the
United States
Wayne M. Morrison
Specialist in Asian Trade and Finance
September 5, 2013
Congressional Research Service
7-5700
www.crs.gov
RL33534
CRS Report for Congress
Prepared for Members and Committees of Congress
China’s Economic Rise: History, Trends, Challenges, and Implications for the U.S.
Summary
Prior to the initiation of economic reforms and trade liberalization 34 years ago, China maintained policies that kept the economy very poor, stagnant, centrally controlled, vastly inefficient, and relatively isolated from the global economy. Since opening up to foreign trade and investment and implementing free market reforms in 1979, China has been among the world’s fastest-growing economies, with real annual gross domestic product (GDP) growth averaging nearly 10% through 2012. In recent years, China has emerged as a major global economic and trade power. It is currently the world’s second-largest economy, largest merchandise exporter, second-largest merchandise importer, second-largest destination of foreign direct investment
(FDI), largest manufacturer, and largest holder of foreign exchange reserves.
The global economic crisis that began in 2008 greatly affected China’s economy. China’s exports, imports, and FDI inflows declined, GDP growth slowed, and millions of Chinese workers reportedly lost their jobs. The Chinese government responded by implementing a $586 billion economic stimulus package, loosening monetary policies to increase bank lending, and providing various incentives to boost domestic consumption. Such policies enabled China to effectively weather the effects of the sharp global fall in demand for Chinese products, while several of the world’s leading economies experienced negative or stagnant economic growth. From 2008 to
2012, China’s real GDP growth averaged 9.2%. However, the economy has shown signs of slowing. Real GDP
Challenges, and Implications for the
United States
Wayne M. Morrison
Specialist in Asian Trade and Finance
September 5, 2013
Congressional Research Service
7-5700
www.crs.gov
RL33534
CRS Report for Congress
Prepared for Members and Committees of Congress
China’s Economic Rise: History, Trends, Challenges, and Implications for the U.S.
Summary
Prior to the initiation of economic reforms and trade liberalization 34 years ago, China maintained policies that kept the economy very poor, stagnant, centrally controlled, vastly inefficient, and relatively isolated from the global economy. Since opening up to foreign trade and investment and implementing free market reforms in 1979, China has been among the world’s fastest-growing economies, with real annual gross domestic product (GDP) growth averaging nearly 10% through 2012. In recent years, China has emerged as a major global economic and trade power. It is currently the world’s second-largest economy, largest merchandise exporter, second-largest merchandise importer, second-largest destination of foreign direct investment
(FDI), largest manufacturer, and largest holder of foreign exchange reserves.
The global economic crisis that began in 2008 greatly affected China’s economy. China’s exports, imports, and FDI inflows declined, GDP growth slowed, and millions of Chinese workers reportedly lost their jobs. The Chinese government responded by implementing a $586 billion economic stimulus package, loosening monetary policies to increase bank lending, and providing various incentives to boost domestic consumption. Such policies enabled China to effectively weather the effects of the sharp global fall in demand for Chinese products, while several of the world’s leading economies experienced negative or stagnant economic growth. From 2008 to
2012, China’s real GDP growth averaged 9.2%. However, the economy has shown signs of slowing. Real GDP