The country consumes most of its oil output but does export some crude oil and oil products. This output, however, is typically expensive and is used for local consumption. Outdated mining and ore-processing technologies are being replaced with modern techniques, but China's rapid industrialization requires imports of minerals from abroad. Over the years, large subsidies were built into the price structure of certain commodities and these subsidies grew substantially in the late s and s.
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The trend, however, has been for remitted profits of the state enterprises to be replaced with taxes on those profits. Initially, this tax system was adjusted so as to allow for differences in the market capitalization and pricing situations of various firms, but more-uniform tax schedules were introduced in the early s. In addition, personal income and value-added taxes were implemented at that time. Shortages of gasoline and diesel fuel developed in the fall of due to reluctance of refineries to produce fuel at low prices set by the state.
Price controls were in effect on numerous basic products and services, but were ineffective with food, prices of which were rising at an annual rate of On 9 January , the government of China issued the following statement on its official website: Pork is an important part of the Chinese economy with a per capita consumption of a fifth of a pound per day.
The worldwide rise in the price of animal feed associated with increased production of ethanol from corn resulted in steep rises in pork prices in China in Increased cost of production interacted badly with increased demand resulting from rapidly rising wages.
The state responded by subsidizing pork prices for students and the urban poor and called for increased production. Release of pork from the nation's strategic pork reserve was considered.
By January , the inflation rate rose to 7. By November , the inflation rate rose up to 5. According to the bureau, industrial output went up As supplies have run short, prices for fuel and other commodities have risen. Chinese investment has always been highly cyclical. Recent peaks occurred in , , , , and The corresponding troughs were in , , , and In China, the majority of investment is carried out by entities that are at least partially state-owned.
Most of these are under the control of local governments. Thus booms are primarily the result of perverse incentives at the local-government level. As their performance evaluations are based, to a large extent, on GDP growth within their jurisdictions, they have a strong incentive to promote large-scale investment projects. When localities get into trouble, they are invariably bailed out by state-owned banks. Under these circumstances, overinvestment is inevitable. A typical cycle begins with a relaxation of central government credit and industrial policy.
This allows local governments to push investment aggressively, both through state-sector entities they control directly and by offering investment-promotion incentives to private investors and enterprises outside their jurisdictions. Projects that went ahead without required approvals will be halted. Bank lending to particular types of investors will be restricted. Credit then becomes tight and investment growth begins to decline.
Eventually such centrally-imposed busts alleviate shortages and bring inflation down to acceptable levels. At that point, the central government yields to local-government demands for looser policy and the cycle begins again.
Most of China's financial institutions are state owned and governed. It fulfills many of the functions of other central and commercial banks. It issues the currency, controls circulation, and plays an important role in disbursing budgetary expenditures.
Additionally, it administers the accounts, payments, and receipts of government organizations and other bodies, which enables it to exert thorough supervision over their financial and general performances in consideration to the government's economic plans. The PBC is also responsible for international trade and other overseas transactions. Remittances by overseas Chinese are managed by the Bank of China BOC , which has a number of branch offices in several countries.
Other financial institutions that are crucial, include the China Development Bank CDB , which funds economic development and directs foreign investment ; the Agricultural Bank of China ABC , which provides for the agricultural sector; the China Construction Bank CCB , which is responsible for capitalizing a portion of overall investment and for providing capital funds for certain industrial and construction enterprises; and the Industrial and Commercial Bank of China ICBC , which conducts ordinary commercial transactions and acts as a savings bank for the public.
China's economic reforms greatly increased the economic role of the banking system. SOEs  Even though nearly all investment capital was previously provided on a grant basis according to the state plan, policy has since the start of the reform shifted to a loan basis through the various state-directed financial institutions. Much of that total is believed by outside observers to be nonperforming. Foreign sources of capital have also increased.
China has received loans from the World Bank and several United Nations programs, as well as from countries particularly Japan and, to a lesser extent, commercial banks. Hong Kong has been a major conduit of this investment, as well as a source itself.
On 23 February , the PBC evinced its inclination to liberalise its capital markets when it circulated a telling ten-year timetable. In August , creation of an as yet unnamed high-level body to gather and analyze financial information and trends was announced by the central government.
The central bank would participate as would people from other organizations engaged in financial matters. It would not have direct regulatory authority, but would attempt to function at the highest professional level in order to provide appropriate guidance to regulators with respect to matters such as shadow banking that are potential sources of instability.
As of and the first quarter of the financial industry had been providing about 1. In an effort to forestall damage from collapse of a possible economic bubble fueled by margin trading the central government raised requirements for margin lending.
Economic damage from a crash in was limited due to margin lending being highly restricted. Some of the small cap stocks acquired may be overvalued. The renminbi "people's currency" is the currency of China, denominated as the yuan , subdivided into 10 jiao or fen.
The renminbi is issued by the People's Bank of China , the monetary authority of China. The renminbi is held in a floating exchange-rate system managed primarily against the US dollar. On 21 July , China revalued its currency by 2. There is a complex relationship between China's balance of trade , inflation, measured by the consumer price index and the value of its currency. Despite allowing the value of the yuan to "float", China's central bank has decisive ability to control its value with relationship to other currencies.
Inflation in , reflecting sharply rising prices for meat and fuel, is probably related to the worldwide rise in commodities used as animal feed or as fuel. Thus rapid rises in the value of the yuan permitted in December are possibly related to efforts to mitigate inflation by permitting the renminbi to be worth more.
During the week of 10 August , against the background of a slowing Chinese economy and appreciation of the U. A market-based "representative" exchange rate against the U. As of , the RMB is the 8th most widely traded currency in the world. The announcement gave 'green-light' to official approval at the 30 November IMF meeting.
Virtually all arable land is used for food crops. China is the world's largest producer of rice and is among the principal sources of wheat , corn maize , tobacco , soybeans , potatoes , sorghum , peanuts , tea , millet , barley , oilseed , pork , and fish. Major non-food crops, including cotton, other fibers, and oilseeds , furnish China with a small proportion of its foreign trade revenue. Agricultural exports, such as vegetables and fruits, fish and shellfish, grain and meat products, are exported to Hong Kong.
China hopes to further increase agricultural production through improved plant stocks, fertilizers , and technology. According to the government statistics issued in ,  after a drop in the yield of farm crops in , output has been increasing annually.
According to the United Nations World Food Program , in , China fed 20 percent of the world's population with only 7 percent of the world's arable land. Of this, slightly more than half is unirrigated, and the remainder is divided roughly equally between paddy fields and irrigated areas. Nevertheless, about 60 percent of the population lives in the rural areas, and until the s a high percentage of them made their living directly from farming.
Since then, many have been encouraged to leave the fields and pursue other activities, such as light manufacturing , commerce, and transportation; and by the mids farming accounted for less than half of the value of rural output. Animal husbandry constitutes the second most important component of agricultural production. China is the world's leading producer of pigs, chickens, and eggs, and it also has sizable herds of sheep and cattle. Since the mids, greater emphasis has been placed on increasing the livestock output.
China has a long tradition of ocean and freshwater fishing and of aquaculture. Pond raising has always been important and has been increasingly emphasized to supplement coastal and inland fisheries threatened by overfishing and to provide such valuable export commodities as prawns.
Environmental problems such as floods, drought, and erosion pose serious threats to farming in many parts of the country. The wholesale destruction of forests gave way to an energetic reforestation program that proved inadequate, and forest resources are still fairly meagre. Because they are inaccessible, the Qinling forests are not worked extensively, and much of the country's timber comes from Heilongjiang , Jilin , Sichuan , and Yunnan.
Western China , comprising Tibet , Xinjiang , and Qinghai , has little agricultural significance except for areas of floriculture and cattle raising. Rice, China's most important crop, is dominant in the southern provinces and many of the farms here yield two harvests a year.
In the north, wheat is of the greatest importance, while in central China wheat and rice vie with each other for the top place. Millet and kaoliang a variety of grain sorghum are grown mainly in the northeast and some central provinces, which, together with some northern areas, also provide considerable quantities of barley.
Most of the soybean crop is derived from the north and the northeast; corn maize is grown in the center and the north, while tea comes mainly from the warm and humid hilly areas of the south. Cotton is grown extensively in the central provinces, but it is also found to a lesser extent in the southeast and in the north. Tobacco comes from the center and parts of the south. Other important crops are potatoes, sugar beets , and oilseeds. In the past decade, the government has been encouraging agricultural mechanization and land consolidation to raise yields and compensate for the loss of rural workers who have migrated to the cities.
By , the integrated mechanization rate had risen to nearly 60 percent, with the rate for wheat surpassing 90 percent and that for maize approaching 80 percent.
In the late s and early s, economic reforms were introduced. First of all this began with the shift of farming work to a system of household responsibility and a phasing out of collectivized agriculture. Later this expanded to include a gradual liberalization of price controls; fiscal decentralization ; massive privatization of state enterprises, thereby allowing a wide variety of private enterprises in the services and light manufacturing ; the foundation of a diversified banking system but with large amounts of state control ; the development of a stock market ; and the opening of the economy to increased foreign trade and foreign investment.
Since , China's energy production has grown dramatically, as has the proportion allocated to domestic consumption. Some 80 percent of all power is generated from fossil fuel at thermal plants , with about 17 percent at hydroelectric installations; only about two percent is from nuclear energy , mainly from plants located in Guangdong and Zhejiang.
In addition, the geographical distribution of energy puts most of these resources relatively far from their major industrial users. Basically the northeast is rich in coal and oil , the central part of north China has abundant coal, and the southwest has immense hydroelectric potential.
But the industrialized regions around Guangzhou and the Lower Yangtze region around Shanghai have too little energy, while there is relatively little heavy industry located near major energy resource areas other than in the southern part of the northeast. China has closed thousands of coal mines over the past five to ten years to cut overproduction. Since , China has been a net importer of oil, a large portion of which comes from the Middle East.
Net imports are expected to rise to 3. China is interested in diversifying the sources of its oil imports and has invested in oil fields around the world. China is developing oil imports from Central Asia and has invested in Kazakhstani oil fields. Analysts expect China's consumption of natural gas to more than double by The 11th Five-Year Program —10 , announced in and approved by the National People's Congress in March , called for greater energy conservation measures, including development of renewable energy sources and increased attention to environmental protection.
Moving away from coal towards cleaner energy sources including oil, natural gas, renewable energy, and nuclear power is an important component of China's development program. Beijing also intends to continue to improve energy efficiency and promote the use of clean coal technology. China has abundant hydroelectric resources; the Three Gorges Dam, for example, will have a total capacity of 18 gigawatts when fully on-line projected for Outdated mining and ore-processing technologies are being replaced with modern techniques, but China's rapid industrialization requires imports of minerals from abroad.
In particular, iron ore imports from Australia and the United States have soared in the early s as steel production rapidly outstripped domestic iron ore production.
Also China has become increasingly active in several African countries to mine the reserves it requires for economic growth, particularly in countries such as the Democratic Republic of the Congo and Gabon. In order of magnitude, produced minerals were bauxite , gypsum , barite , magnesite , talc and related minerals, manganese ore, fluorspar , and zinc. The mining sector accounted for less than 0. China has an abundant potential for hydroelectric power production due to its considerable river network and mountainous terrain.
Most of the total hydroelectric capacity is situated in the southwest of the country , where coal supplies are poor but demand for energy is rising swiftly. The potential in the northeast is fairly small, but it was there that the first hydroelectric stations were built—by the Japanese during its occupation of Manchuria. China is well endowed with mineral resources,  the most important of which is coal.
China's mineral resources include large reserves of coal and iron ore , plus adequate to abundant supplies of nearly all other industrial minerals. Although coal deposits are widely scattered some coal is found in every province , most of the total is located in the northern part of the country.
The province of Shanxi , in fact, is thought to contain about half of the total; other important coal-bearing provinces include Heilongjiang , Liaoning , Jilin , Hebei , and Shandong. Anthracite is present in several places especially Liaoning , Guizhou , and Henan , but overall it is not very significant.
To ensure a more even distribution of coal supplies and to reduce the strain on the less than adequate transportation network, the authorities pressed for the development of a large number of small, locally run mines throughout the country.
This campaign was energetically pursued after the s, with the result that thousands of small pits have been established, and they produce more than half the country's coal.
This output, however, is typically expensive and is used for local consumption. It has also led to a less than stringent implementation of safety measures in these unregulated mines, which cause several thousands of deaths each year. As China's economy continues to grow, China's coal demand is projected to rise significantly.
Although coal's share of China's overall energy consumption will decrease, coal consumption will continue to rise in absolute terms. China's continued and increasing reliance on coal as a power source has contributed significantly to putting China on the path to becoming the world's largest emitter of acid rain -causing sulfur dioxide and greenhouse gases , including carbon dioxide.
As of falling coal prices resulted in layoffs at coal mines in the northeast. China's onshore oil resources are mostly located in the Northeast and in Xinjiang , Gansu , Qinghai , Sichuan , Shandong , and Henan provinces. Oil shale is found in a number of places, especially at Fushun in Liaoning, where the deposits overlie the coal reserves, as well as in Guangdong.
The country consumes most of its oil output but does export some crude oil and oil products. In , the pace of China's economic growth exceeded the domestic oil capacity and floods damaged the nation's oil fields in the middle of the year.
Consequently, China imported oil to compensate for the supply reduction and surpassed the US in September to become the world's largest importer of oil. The total extent of China's natural gas reserves is unknown, as relatively little exploration for natural gas has been done. Authors conclude that carbon emissions are mainly determined by income, energy consumption and trade openness and their findings confirm the existence of an Environmental Kuznets Curve in the case of China.
Iron ore reserves are found in most provinces, including Hainan. Gansu, Guizhou, southern Sichuan, and Guangdong provinces have rich deposits. The largest mined reserves are located north of the Yangtze River and supply neighboring iron and steel enterprises.
With the exception of nickel , chromium , and cobalt , China is well supplied with ferroalloys and manganese. Reserves of tungsten are also known to be fairly large. Copper resources are moderate, and high-quality ore is present only in a few deposits. Discoveries have been reported from Ningxia. Lead and zinc are available, and bauxite resources are thought to be plentiful. China's antimony reserves are the largest in the world.
Tin resources are plentiful, and there are fairly rich deposits of gold. China is the world's fifth largest producer of gold and in the early 21st century became an important producer and exporter of rare metals needed in high-technology industries. China also produces a fairly wide range of nonmetallic minerals. One of the most important of these is salt , which is derived from coastal evaporation sites in Jiangsu, Hebei, Shandong, and Liaoning, as well as from extensive salt fields in Sichuan, Ningxia, and the Qaidam Basin.
There are important deposits of phosphate rock in a number of areas; Jiangxi, Guangxi, Yunnan and Hubei. Production has been accelerating every year. As of China is producing 97,, metric tons of phosphate rock a year. China also has large resources of fluorite fluorspar , gypsum , asbestos , and has the world's largest reserves and production of cement , clinker and limestone. Industry and construction account for Between the years and , China used more cement than the United States consumed during the entire 20th century.
In November the State Council of the People's Republic of China mandated a "social risk assessment" for all major industrial projects. This requirement followed mass public protests in some locations for planned projects or expansions. Major industries include mining and ore processing; iron and steel ; aluminium ; coal ; machinery ; armaments ; textiles and apparel ; petroleum ; cement ; chemical ; fertilizers ; food processing ; automobiles and other transportation equipment including rail cars and locomotives, ships, and aircraft; consumer products including footwear , toys , and electronics ; telecommunications and information technology.
China has become a preferred destination for the relocation of global manufacturing facilities. Its strength as an export platform has contributed to incomes and employment in China. These two areas alone now account for about 20—30 percent of the total gross value of industrial output. China, therefore, still imports significant quantities of specialized steels. Overall industrial output has grown at an average rate of more than 10 percent per year, having surpassed all other sectors in economic growth and degree of modernization.
The predominant focus of development in the chemical industry is to expand the output of chemical fertilizers , plastics , and synthetic fibers. The growth of this industry has placed China among the world's leading producers of nitrogenous fertilizers. In the consumer goods sector the main emphasis is on textiles and clothing , which also form an important part of China's exports.
Textile manufacturing, a rapidly growing proportion of which consists of synthetics, account for about 10 percent of the gross industrial output and continues to be important, but less so than before. The industry tends to be scattered throughout the country, but there are a number of important textile centers , including Shanghai , Guangzhou , and Harbin.
Profits are low despite continued high demand due to high debt and overproduction of high end products produced with the equipment financed by the high debt. The central government is aware of this problem but there is no easy way to resolve it as local governments strongly support local steel production.
Meanwhile, each firm aggressively increases production. Much of the country's steel output comes from a large number of small-scale producing centers, one of the largest being Anshan in Liaoning.
China was the top exporter of steel in the world in Export volumes in were As of steel exports faced widespread anti-dumping taxes and had not returned to pre levels. Domestic demand remained strong, particularly in the developing west where steel production in Xinjiang was expanding. On 26 April , a warning was issued by China's bank regulator to use caution with respect to lending money to steel companies who, as profits from the manufacture and sale of steel have fallen, have sometimes used borrowed money for speculative purposes.
According to the China Iron and Steel Association the Chinese steel industry lost 1 billion Rmb in the first quarter of , its first loss since By China had become the world's third largest automotive vehicle manufacturer after US and Japan and the second largest consumer only after the US.
Automobile manufacturing has soared during the reform period. In only , automobiles were produced annually, but by production had reached ,, then jumped to nearly 1. In production rose to nearly 3. China has become the number-one automaker in the world in Domestic sales have kept pace with production. After respectable annual increases in the mid- and late s, passenger car sales soared in the early s.
In , a total of 7. In , China became the world's largest automotive vehicle manufacturer as well as the largest consumer ahead of the United States with an estimated 18 million new cars sold.
China's automotive industry has been so successful that it began exporting car parts in China began to plan major moves into the automobile and components export business starting in A new Honda factory in Guangzhou was built in solely for the export market and was expected to ship 30, passenger vehicles to Europe in By , 12 major foreign automotive manufacturers had joint-venture plants in China.
They produced a wide range of automobiles, minivans , sport utility vehicles , buses , and trucks. The vehicle export was 78, units in , , units in , and , units in The market for domestically produced cars, under a local name, is likely to continue to grow both inside China and outside.
Companies such as Geely, Qiantu and Chery are constantly evaluating new international locations, both in developing and developed countries. Substantial investments were made in the manufacture of solar panels and wind generators by a number of companies, supported by liberal loans by banks and local governments.
However, by manufacturing capacity had far outstripped domestic and global demand for both products, particularly solar panels, which were subjected to anti-dumping penalties by both the United States and Europe. The global oversupply has resulted in bankruptcies and production cutbacks both inside and outside China.
As of , China was the world's largest market for personal computers . The output of China's services in ranks second worldwide after the United States. High power and telecom density has ensured that the country has remained on a high-growth trajectory over the long term. In the services sector produced However, its proportion of GDP is still low compared to the ratio in more developed countries, and the agricultural sector still employs a larger workforce.
Prior to the onset of economic reforms in , China's services sector was characterized by state-operated shops , rationing , and regulated prices—with reform came private markets, individual entrepreneurs, and a commercial sector. The wholesale and retail trade has expanded quickly, with numerous shopping malls , retail shops, restaurant chains and hotels constructed in urban areas.
Public administration remains a main component of the service sector, while tourism has become a significant factor in employment and a source of foreign exchange. China possesses a diversified communications system that links all parts of the country by Internet, telephone, telegraph, radio, and television.
China's tourism industry is one of the fastest-growing industries in the national economy and is also one of the industries with a very distinct global competitive edge. A large middle class with strong consumption power is emerging in China, especially in major cities. China's outbound tourists reached It is forecast by the World Tourism Organization that China's tourism industry will take up to 8.
Chinese business-travel spending is also forecast to be the highest in the world by , overtaking the United States. It is forecast by Euromonitor International that China will overtake France as the leading travel destination by Luxury spending in China has skyrocketed, an indicator of the country's newfound wealth.
Meanwhile, as those who once had no recourse but low-quality tap water take advantage of its availability in supermarkets, those who had little or no running water are now capitalizing on its availability. Tap water production and supply is expected to grow by China's automotive industry is expected to expand by Also, consumption of chocolate and other confectionery is to increase by Additionally China's fast food industry has been growing at a After an October ban on government agencies purchasing luxury goods, often used as "gifts", sales of luxury goods in China remained strong but slowed, even falling slightly for some luxury retailers in the 4th quarter of ,  with sales of shark fins and edible swallow nests once staples of lavish government banquets down sharply.
Many shops in international travel destinations have specialized staff devoted to Chinese customers. As of , computer crime is a lucrative illicit practice in China.
An academic study released in August by the University of California UC Institute on Global Conflict and Cooperation , claimed that China's "cyber black market " involved over 90, participants, cost the local economy 5.
One of the hallmarks of China's socialist economy was its promise of employment to all able and willing to work and job-security with virtually lifelong tenure. This socialist policy is known as the iron rice bowl.
The reforms also dismantled the iron rice bowl , which meant it witnessed a rise in unemployment in the economy. China's estimated employed labor force in totaled This wage, combined with other costs of doing business in China, had, more or less, equalized any Chinese cost advantage with respect to developed economies.
Chinese trade unions are organized on a broad industrial basis. Membership is open to those who rely on wages for the whole or a large part of their income , a qualification that excludes most agricultural workers.
In , the issues of manufacturing wages caused a strike at a Honda parts plant. This resulted in wage increases both at the struck plant and other industrial plants. The census found that China was now half urban and rapidly aging due to the one child policy. This is expected to lead to increased demand for labor to take care of an elderly population and a reduced supply of migrant labor from the countryside.
Due to worsening pollution, the corruption and political uncertainties of the one-party state and the limited economic freedom in an economy dominated by large state-owned enterprises, many skilled professionals are either leaving the country or preparing safety nets for themselves abroad. International trade makes up a sizeable portion of China's overall economy.
Being a Second World country at the time, a meaningful segment of China's trade with the Third World was financed through grants, credits, and other forms of assistance.
However, after Mao Zedong 's death in , these efforts were scaled back. After which, trade with developing countries became negligible, though during that time, Hong Kong and Taiwan both began to emerge as major trading partners. Since economic reforms began in the late s, China sought to decentralize its foreign trade system to integrate itself into the international trading system.
China concluded multilateral negotiations on its accession to the WTO in September The completion of its accession protocol and Working Party Report paved the way for its entry into the WTO on 11 December , after 16 years of negotiations, the longest in the history of the General Agreement on Tariffs and Trade. The vast majority of China's imports consists of industrial supplies and capital goods, notably machinery and high-technology equipment, the majority of which comes from the developed countries, primarily Japan [ citation needed ] and the United States [ citation needed ].
Regionally, almost half of China's imports come from East and Southeast Asia, and about one-fourth of China's exports go to the same destinations [ citation needed ]. About 80 percent of China's exports consist of manufactured goods, most of which are textiles and electronic equipment, with agricultural products and chemicals constituting the remainder.
Out of the five busiest ports in the world, three are in China. China's share of total U. A spokesman for the Ministry of Commerce , Van Jingsun, said that the volume of trade between China and Russia could exceed 40 billion dollars in Most of China's exports to Russia remain apparel and footwear.
Chinese imports from Russia are mainly those of energy sources, such as crude oil, which is mostly transported by rail, and electricity exports from neighboring Siberian and Far Eastern regions.
In the near future, exports of both of these commodities are set to increase, as Russia is building the Eastern Siberia-Pacific Ocean oil pipeline with a branch going to the Chinese border, and Russian power grid monopoly UES is building some of its hydropower stations with a view of future exports to China. Export growth has continued to be a major component supporting China's rapid economic growth. To increase exports, China pursued policies such as fostering the rapid development of foreign-invested factories, which assembled imported components into consumer goods for export and liberalizing trading rights.
In its 11th Five-Year Program , adopted in , China placed greater emphasis on developing a consumer demand-driven economy to sustain economic growth and address imbalances. China's investment climate has changed dramatically with more than two decades of reform. In the early s, China restricted foreign investments to export-oriented operations and required foreign investors to form joint-venture partnerships with Chinese firms.
The Encouraged Industry Catalogue sets out the degree of foreign involvement allowed in various industry sectors. From the beginning of the reforms legalizing foreign investment, capital inflows expanded every year until Since the early s, the government has allowed foreign investors to manufacture and sell a wide range of goods on the domestic market, eliminated time restrictions on the establishment of joint ventures, provided some assurances against nationalization , allowed foreign partners to become chairs of joint venture boards, and authorized the establishment of wholly foreign-owned enterprises, now the preferred form of FDI.
In , China granted more preferential tax treatment for Wholly Foreign Owned Enterprises and contractual ventures and for foreign companies, which invested in selected economic zones or in projects encouraged by the state, such as energy, communications and transportation.
China also authorized some foreign banks to open branches in Shanghai and allowed foreign investors to purchase special "B" shares of stock in selected companies listed on the Shanghai and Shenzhen Securities Exchanges.
These "B" shares sold to foreigners carried no ownership rights in a company. China revised significantly its laws on Wholly Foreign-Owned Enterprises and China Foreign Equity Joint Ventures in and , easing export performance and domestic content requirements. Foreign investment remains a strong element in China's rapid expansion in world trade and has been an important factor in the growth of urban jobs.
Foreign-invested enterprises today produce about half of China's exports the majority of China's foreign investment come from Hong Kong , Macau and Taiwan , and China continues to attract large investment inflows. However, the Chinese government's emphasis on guiding FDI into manufacturing has led to market saturation in some industries, while leaving China's services sectors underdeveloped. From to , China was the world's second-largest recipient of foreign direct investment after the United States.
Amid slowing economic conditions and a weakening yuan in , December of that year saw a 5. This survey of over members found that "China remains a top three investment priority for six out of ten member companies," though this is a decline from the high of eight out of ten respondents considering China a top priority.
China has now surpassed those of Japan, making China's foreign exchange reserves the largest in the world. As part of its WTO accession, China undertook to eliminate certain trade-related investment measures and to open up specified sectors that had previously been closed to foreign investment. New laws, regulations, and administrative measures to implement these commitments are being issued.
Major remaining barriers to foreign investment include opaque and inconsistently enforced laws and regulations and the lack of a rules-based legal infrastructure. Another major development in the history of foreign investment in China was the establishment of the Shanghai Free Trade Zone in September Outward foreign direct investment is a new feature of Chinese globalization, where local Chinese firms seek to make investments in both developing and developed countries.
Such investments offer access to expertise in marketing and distribution potentially useful in exploiting the developing Chinese domestic market. Since when Lenovo acquired IBM 's ThinkPad , Chinese companies have been actively expanding outside of China, in both developed and developing countries.
There are two ways Chinese companies choose to enter a foreign market: At the beginning, state-owned enterprises dominate the foreign acquisition and most of the money goes to oil and minerals.
Since , more and more private companies start to acquire non raw material foreign companies. Below is a list of the top 15 outbound deals from Chinese companies: According to market consecutive researches by the Monogram Group, a Chicago-based advertising agency, in , , and , American consumers' willingness to purchase Chinese products across all categories except PC remained the same or became worse during The only sector in which Americans were more likely to purchase was personal computers, maybe due to the brand building of Lenovo.
Shanghai Auto acquired Shanghai Auto wanted the brand and technology to expand its footprint in China.
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