page_title: Economy of Asia
section_title: Recent reforms in China
hierarchical_section_title: Economy of Asia / Regional variation / Recent reforms in China
caption_attribution_description: Hong Kong Exchange Trade Lobby before renovation 香港交易所 交易大堂
context_page_description: The economy of Asia comprises more than 4.5 billion people living in 49 different nations. Asia is the fastest growing economic region, as well as the largest continental economy by both GDP Nominal and PPP in the world. Moreover, Asia is the site of some of the world's longest modern economic booms, starting from the Japanese economic miracle, Miracle on the Han River in South Korea, economic boom in China and economic boom in India.
  As in all world regions, the wealth of Asia differs widely between, and within, states. This is due to its vast size, meaning a huge range of different cultures, environments, historical ties and government systems. The largest economies in Asia in terms of PPP gross domestic product are China, India, Japan, Indonesia, Turkey, South Korea, Saudi Arabia, Iran, Thailand and Taiwan and in terms of nominal gross domestic product are China, Japan, India, South Korea, Indonesia, Saudi Arabia, Turkey, Taiwan, Thailand and Iran.
context_section_description: Following a Third Plenum of the Central Committee of the Communist Party of China in 2013 China revealed plans for several sweeping social and economic reforms.  The government would relax its one-child policy to allow single-child parents to have two kids.  This reform was implemented as a response to the aging population of China and provide more labor.  The government also reformed the hukou system, allowing the labor force to become more mobile.
  The reforms will make financial loan systems more flexible encouraging increased economic involvement of private firms.  Additionally, state-owned enterprises will be required to pay higher dividends to the government.  The benefits of this will go to Social Security.  Reform also allows farmers to own land for the first time ideally encouraging farmers to sell their land and move to cities which will boost consumerism and increase urban work force.
  On April 10, 2014, China Securities Regulatory Commission (CSRC) and Securities and Futures Commission (CSRC) made a Joint Announcement about the approval for the establishment of mutual stock market access between Mainland China and Hong Kong.  Under the ‘Connect Program’, the Stock Exchange of Hong Kong Limited and Shanghai Stock Exchange will establish mutual order-routing connectivity and related technical infrastructure to enable investors to invest in Chinese equities market directly. On November 17, 2014, the program officially launched with the approvals from Beijing.
  The 'Connect Program' is an initiative with significance to both Hong Kong and Mainland. It brings another opportunity for the growth of the Hong Kong securities market. More importantly, it provides, for the first time, a feasible, controllable and expandable channel to investors to invest in both Hong Kong and Mainland, in addition to current schemes including QDII, QFII, AND RDFII programs.
  Local government's spending plays a critical role in China's fiscal system. Following the 1991 intergovernmental fiscal reform, the central government's share of total fiscal revenue increase from less than 30 percent to around 50 percent in 2012. Local governments are now responsible for infrastructure investment, service delivery and social spending, which together account for about 85 percent of the total expenditure. Without a rule to guide the distribution of intergovernmental expenditure responsibilities, significant levels of risk would be associated with the spending.
  China's central administration will impose hard caps on local government borrowing in order to control financial risks from an explosive level. Statistics showed that total debt had reached $3 trillion by the middle of 2013, raising total government debt to 58 percent of GDP. Similar jump occurred in corporate debt as well, which pushed China's overall debt-GDP ratio up to 261% from 148% in 2008. IMF warned that rapid debt run-ups could lead to financial crisis.
  The new rules are expected to be combined with broader fiscal reforms aimed at bringing local government tax revenue in line with expenditure. The central government will provide more guidance to local governments in terms of how to manage and invest wisely.
  As of 2017, China has the world's second largest economy by nominal GDP at $11.8 trillion. It is the largest manufacturing economy in the world, and is the largest exporter of goods. China is also the world's largest producer and consumer of agricultural products. China is a leading producer of rice, and is a key producer of wheat, corn, tobacco, soybeans, and potatoes, among others. Though thee real estate industry in China has taken, China has had the largest real estate market in the world. China's service sector has doubled in size, accounting for 46% of China's total GDP. In 2011, the Chinese government instituted a five-year plan to prioritize the development of the service economy. The telecommunications sub-sector in China is one of the largest in the world, with over a billion mobile customers. Tencent, the developer of WeChat, is one of the dominating players in the telecommun
caption: Hong Kong Exchange Trade Lobby 2005
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