page_title: Economy of China
section_title: Development
hierarchical_section_title: Economy of China / Development
caption_attribution_description: English: Graph of major developing economies by GDP per capita at purchasing-power parity, in constant 2011 international dollars, 1990-2013. Created on Excel from World Bank World Development Indicators 2014 data.
context_page_description: The economy of China has transitioned from a centrally-planned system to a more market-oriented economy since 1978 or earlier, which as of 2019 ranked as the second largest in the world by nominal GDP and as of 2017 the largest in the world by purchasing power parity. China has the world's fastest-growing major economy, with growth rates averaging 10% over 30 years. As of 2018, China's private sector accounted between 70% and 80% of the GDP; the private sector is also responsible for 80% of urban employment and 90% of new jobs. According to the IMF, on a per capita income basis, China ranked 73rd by GDP per capita in 2019. China's GDP was $14.3 trillion in 2019. The country has natural resources with an estimated worth of $23 trillion, 90% of which are coal and rare earth metals. China also has the world's largest total banking sector assets of around $40 trillion with $27.39 trillion in total deposits. It has the fourth-largest inward foreign direct investment, and the eleventh-largest outward foreign direct investment. China has the world's second-highest number of billionaires with total wealth of $996 billion.
context_section_description: The economic reforms implemented in 1978 helped to propel China into the ranks of the world's major economic powers.
  To guide economic development, the Chinese central government adopts "five-year plans" that detail its economic priorities and essential policies. The Thirteenth Five-Year Plan (2016–2020) is currently being implemented.
  In contrast to most countries, where the private sector dominates the economy, China's economy is still largely dominated by the public sector.
  Like Japan and South Korea before it, China has grown steadily, raising the income levels and living standards of its citizens while producing goods that are consumed globally. Between 1978 and 2005, China's per capita GDP grew from $153 to $1,284. Its current account surplus increased more than twelve-fold between 1982 and 2004, from $5.7 billion to $71 billion. During this time, China also became an industrial powerhouse, moving beyond initial successes in low-wage sectors like clothing and footwear to the increasingly sophisticated production of computers, pharmaceuticals, and automobiles.
  However, it remains unclear how long the Chinese economy can maintain this trajectory. According to the 11th five-year plan, China needed to sustain an annual growth rate of 8% for the foreseeable future. Only with such levels of growth, the leadership argued, could China continue to develop its industrial prowess, raise its citizen's standard of living, and redress the inequalities that were cropping up across the country. Yet no country had ever before maintained the kind of growth that China was predicting. Moreover, China had to some extent already undergone the easier parts of development. In the 1980s, it had transformed its vast and inefficient agricultural sector, freeing its peasants from the confines of central planning and winning them to the cause of reform. In the 1990s, it had likewise started to restructure its stagnant industrial sector, wooing foreign investors for the first time. These policies had catalysed the country's phenomenal growth. Instead, China had to take what many regarded as the final step toward the market, liberalizing the banking sector and launching the beginnings of a real capital market. According to an article in Journal of the Asia Pacific Economy by Mete Feridun of University of Greenwich Business School and Abdul Jalil from Wuhan University in China, financial development leads to a reduction in the income inequality in China. This process, however, would not be easy. As of 2004, China's state-owned enterprises were still only partially reorganized, and its banks were dealing with the burden of over $205 billion (1.7 trillion RMB) in non-performing loans, monies that had little chance of ever being repaid. The country had a floating exchange rate, and strict controls on both the current and capital accounts.
  In mid-2014 China announced it was taking steps to boost the economy, which at the time was running at a rate 7.4% per annum, but was slowing. The measures included plans to build a multi-tier transport network, comprising railways, roads and airports, to create a new economic belt alongside the Yangtze River.
caption: China and other major developing economies by GDP per capita at purchasing-power parity (1990–2013) as the rapid economic growth of China (blue) is readily apparent[80]
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