China Factsheet

Annual data   2007(a)   Historical averages (%)   2003-07 
 Population (m)   1,321.3   Population growth   0.6 
 GDP (US$ bn; market exchange rate)   3,241.8(b)   Real GDP growth   10.8 
 GDP (US$ bn; purchasing power parity)   7,238.0   Real domestic demand growth   9.4 
 GDP per head (US$; market exchange rate)   2,453   Inflation   2.6 
 GDP per head (US$; purchasing power parity)   5,478   Current-account balance (% of GDP)   5.6 
 Exchange rate (av) Rmb:US$   7.6(b)   FDI inflows (% of GDP)   3.0 
 (a) Economist Intelligence Unit estimates. (b) Actual. 

Background: The People's Republic of China was founded in 1949 by the Chinese Communist Party (CCP). The CCP chairman, Mao Zedong, then led the country for nearly three decades. After gaining power in 1978, two years after Mao's death, Deng Xiaoping introduced economic reforms. From 1989 to 2002 Jiang Zemin presided over a more collective leadership. The CCP is now led by Hu Jintao, who is also state president.

Political structure: The CCP dominates the government. Mr Hu is general secretary of the CCP, state president and chairman of the Central Military Commission, which controls the armed forces. Wen Jiabao leads the government as premier. The politburo standing committee is the main decision-making body. The National People's Congress is a largely rubber-stamp legislature. The Chinese People's Political Consultative Conference contains political, social and religious groups within a powerless institution. There is no formal political opposition to the CCP.

Policy issues: China's leaders want continuing economic liberalisation and sustainable growth alongside enduring political control. They recognise that many people have failed to benefit since economic reforms were launched at the end of the 1970s, and that such large numbers of disadvantaged citizens constitute a political liability. Accordingly, the balance of economic development is being altered in favour of social priorities. The government will continue to pursue further economic liberalisation, following China's accession to the World Trade Organisation in 2001. A private sector made up of domestic and foreign-funded interests is now strongly encouraged to expand while complementing the state sector.

Taxation: From January 1st 2008 the standard rate of corporate income tax has been 25% for both Chinese and foreign firms. However, preferential tax rates continue to be enjoyed by many firms, including enterprises investing in favoured sectors and regions and foreign-invested companies whose preferential rates are in the process of being phased out.

Foreign trade: In 2007 merchandise exports were worth an estimated US$1.2trn and imports stood at US$904bn (according to customs data), resulting in a trade surplus of US$315bn.