China’s National Economy from 2005-2014

China’s National Economy from 2005-2014

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Table of Contents

1. Introduction        

2. Production Output Performance Analysis        

2.1. Real GDP, Real GDP Growth Rate, Real GDP per capita Analysis        

2.2. Definition of Each Indicator        

2.3. Economy Performance Trend        

2.4. Government’s Measures        

3. Labour Market Analysis        

3.1. Unemployment Rates Analysis        

3.2. Definition of Unemployment Rates        

3.3. Types of Unemployment Analysis        

3.4. Government’s Measures        

4. Price Level Analysis        

4.1. Inflation Rate Analysis        

4.2. Definition of Inflation Rate        

4.3. The Causes of Inflation        

4.4. Government’s Measures        

5. Conclusion        

References        

1. Introduction

During the decade between 2005 and 2014, China’s national economy put the public through a lot, which are labeled as fierce market competition, excessive-priced housing, high price of commodities, high taxes, high cost of financing, stock market crash, the gap between rich and poor, etc. On the whole, China’s economy is now faced with very complicated domestic and foreign environment. Lots of reasons, such as history, economic system, political system, and the transition phase all contribute to this complicated environment (Buckley, 2016). The review of the ten years of development of China's macro economy intends to find the economic operation rules and logic in the process of China's economic development and thus provides analysis basis and support to better grasp the future development trend.

2. Production Output Performance Analysis

2.1. Real GDP, Real GDP Growth Rate, Real GDP per capita Analysis

Figure 1 shows China’s real GDP from 2005 to 2014. Figure 2 shows China’s real GDP per capita from 2005 to 2014. Figure 3 shows China’s real GDP growth rate from 2005 to 2014. Among them, the real GDP increased from the 185,896 billion Yuan in 2005 to the 636,139 billion Yuan in 2014; the real GDP per capita increased from 1,4259 Yuan in 2005 t0 4,6629 Yuan in 2014. Among these two years, the growth rate of real GPD in 2007 was highest, which was 14.2%, while the lowest growth rate was 7.3% in 2014 (State Statistics Bureau, 2015).

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Figure 1. China’s real GDP from 2005 to 2014. Data source: (State Statistics Bureau, 2015)

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Figure 2. China’s real GDP per captia from 2005 to 2014. Data source: (State Statistics Bureau, 2015)

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Figure 3. China’s real GDP growth rate from 2005 to 2014. (State Statistics Bureau, 2015)

2.2. Definition of Each Indicator

GDP refers to the total market value of all final products and services in a certain production period of all residents units in a country (within the scope of national border). GDP is the core criterion for national economic evaluation, which is also a crucial index to evaluate a country or region's overall economic status. Real GDP refers to the market price of the final product by using the market prices of certain specific base period (Rajewski, 1994).

Real GDP per capita, often been used to evaluate the economic development, and is one of the most crucial macroeconomic criterions. It is the resultful tool for public to grasp the macroeconomic status of a country or a region. When GDP within a national accounting periods divided by the permanent residents of the country (or census register population), the result is GDP per capita, which is a measurement of peoples’ living standard (Smyth & Inder, 2004).

The GDP growth rate is the GNP in the end period divided by the GNP in the base period. When the GNP in the end period is calculated with the current price of the end period, then the result is the nominal economic growth rate. When the GNP in the end period is calculated with the same price (the base price), the result will be real economic growth rate. In measuring economic growth, the real economic growth is used. Economic growth rate is also called economic growth speed, which is the dynamic index reflecting the change of economic development level in a given period and is also a basic indicator of whether the national economy is dynamic or not (Canning et al., 2004).

2.3. Economy Performance Trend

China's GDP in 2005 and 2014 were 185,856 billion Yuan and 636,139 billion Yuan respectively. The latter was increased by 3.43 times compared with the former. Seen from the growth rate, the high-speed platform of 11.3% in 2014 declined to 7.3% in 2005. Seen from the industrial structure, the contribution rate of the secondary industry in 2005 and 2014 were 50.3% and 44.4% respectively, while the contribution rate of the tertiary industry to GDP were 47.1% and 48.1% respectively (State Statistics Bureau, 2015). This shows that China's economic growth fell mainly due to the slowing of the manufacturing growth.

2.4. Government’s Measures

Table 1 summarizes the main economic policies and measures implemented by China’s government between 2005 and 2014.

Table 1. The main economic policies and measures implemented by China’s government between 2005 and 2014.

Source: (Babones, 2015; Nolan, 2015; Cai, 2015; Koivu, 2012)