market forces - a success story of china

7/31/2019 Market Forces - A Success Story of China

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MARKET FORCES : ASUCCESS STORY OF CHINA

Abhilasha (01)

Ajay (02)Amithab (03)

Anup (04)

Anusha a (05)

Anusha b (06)

by


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FLOW OF PRESENTATION :

INTRODUCTION

GDP

IMPORTS & EXPORTS

FDI

MACRO ECONOMIC FACTORS

CONCLUSION


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INTRODUCTION :


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GDP - GROWTH RATE OF CHINA :

China's economy is the second largest in the worldafter that of the United States.

Gross domestic product (GDP) is the current marketvalue of outputs produced within a given period by factorsof production within a country

GDP = C+I +G + (X-M)s


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PRIMARY SECTOR :

The share of primary industry in GDP has fallen from28% in 1978, to 10.3% in 2008.This fall occurred becauseagricultural output grew more slowly than output of other

economic sectors.

Only 10-15% of the total land area is used for cultivation.


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SECONDARY SECTOR

Industry and manufacture

The share of the secondary sector has stayed level ataround 48% over the period as a whole.

It account for 46.3% of China's GDP.

Around 8% of the total manufacturing output in the worldcomes from China itself.

Chinaranks third worldwide in industrial output.
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_sector_compositionhttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_sector_composition


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TERTIARY SECTOR :

At the same time, the share of tertiary industry grew from24% to 43.4% as services sectorsproliferated.

China's services output ranks fifth worldwide.
http://en.wikipedia.org/wiki/Service_sectorhttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_sector_compositionhttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_sector_compositionhttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_sector_compositionhttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_sector_compositionhttp://en.wikipedia.org/wiki/Service_sector


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GDP (PURCHASING POWER PARITY) :


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PERCAPITA INCOME :


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IMPORTS AND EXPORTS :

China top 10 import sources
http://www.starmass.com/china_review/imports_exports/images/large/china_top_import_source1.jpg


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China top 10 export markets
http://www.starmass.com/china_review/imports_exports/images/large/china_top_export_market1.jpg


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IMPORTS AND EXPORTS AS A % OFGDP :


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CHINA FDI HISTORY :

TRANSITION :

Chinese Foreign Join Venture Law (1979)

Wholly Foreign Owned Enterprises (1986)

Economic Zones:

Four Zones in 1980 Shantou, Shenzhen, Zhuhai and Xiamen

Fourteen cities by 1984

Whole China by late 1900s


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RAPID GROWTH IN FDI :

Rapid economic growth in reform period

Abundance of labor and its low costs

Rapid expansion of Chinas domestic market

Role of overseas Chinese

Increasing integration with world economy


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WHY FDI?

Offsetting the capital deficiency

Acquiring advanced technology

Gaining production know-how

Promoting exports


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1) DEFLATION PERIOD IN CHINA:

Entered a period of deflation for nearly five years at the end

of 1997.

Government efforts in increasing public investment, the ratioof total investment to GDP remained high at 33 percent in

1998-2002.

China to effectively combat deflation, with uninterruptedgrowth at 8 percent on average during that period

MACRO ECONOMIC FACTORS


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CHINA EMERGED FROM DEFLATION IN 2003

Average annual GDP growth rate reached 10.8 percentin 2003-2008 .

Due to the increase in growth rate, the governments

revenue grew rapidly.

The fiscal resources spent on infrastructure investmentled to sustainable higher growth.


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2) INFLATION IN CHINA :

China will need to normalize the monetary stance but thereis no need to worry too much about inflation.

Inflation is unlikely to escalate but expectations matter andthere are risks. Food prices are unlikely to continue to riseat the recent pace.

There is some risk that the higher food prices spill over intowages and other prices


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3) EXCHANGE RATES :

China's currency, the renminbi, remains substantially

undervalued, importantly due to that country's massive

intervention in the foreign exchange markets, and is a majorcause of its large and growing trade surplus.


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CONCLUSION


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REFERENCES :

www.rbi.com

www.indiastat.com

www.economywatch.com

www.economist.com

www.businessweek.com
http://www.rbi.com/http://www.indiastat.com/http://www.economywatch.com/http://www.economist.com/http://www.businessweek.com/http://www.businessweek.com/http://www.economist.com/http://www.economywatch.com/http://www.indiastat.com/http://www.rbi.com/


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market forces - a success story of china

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