As of 2013, China has the world's second-largest economy in terms of nominal GDP, totalling approximately US$8.227 trillion according to the International Monetary Fund (IMF). However, China's 2012 nominal GDP per capita of US$6,075 puts it behind around ninety countries (out of 183 countries on the IMF list) in global GDP per capita rankings. If PPP is taken into account in total GDP figures, China is again second only to the United States – in 2012, its PPP GDP reached $12.405 trillion, corresponding to $9,161 per capita.
From its founding in 1949 until late 1978, the People's Republic of China was a Soviet-style centrally planned economy, without private businesses or capitalism. To propel the country towards a modern, industrialized communist society, Mao Zedong instituted the Great Leap Forward in the early 1960s, although this had decidedly mixed economic results. Following Mao's death in 1976 and the consequent end of the Cultural Revolution, Deng Xiaoping and the new Chinese leadership began to reform the economy and move towards a more market-oriented mixed economy under one-party rule. Agricultural collectivization was dismantled and farmlands were privatized to increase productivity. Foreign trade was focused upon as a major vehicle of growth, leading to the creation of Special Economic Zones (SEZs), first in Shenzhen and then in other Chinese cities. Inefficient state-owned enterprises (SOEs) were restructured by introducing western-style management systems, and unprofitable ones were closed outright, resulting in massive job losses. Modern-day China is mainly characterized as having a market economy based on private property ownership, and is one of the leading examples of state capitalism. The state still dominates in strategic "pillar" sectors such as energy production and heavy industries, but private enterprise has expanded enormously, with around 30 million private businesses recorded in 2008.
In 1978, Deng Xiaoping initiated China's market-oriented reforms.Since economic liberalization began in 1978, China's investment- and export-led economy has grown more than a hundredfold and is the fastest-growing major economy in the world. According to the IMF, China's annual average GDP growth between 2001 and 2010 was 10.5%, and the Chinese economy is predicted to grow at an average annual rate of 9.5% between 2011 and 2015. Between 2007 and 2011, China's economic growth rate was equivalent to all of the G7 countries' growth combined. According to the Global Growth Generators index announced by Citigroup in February 2011, China has a very high 3G growth rating. Its high productivity, low labor costs and relatively good infrastructure have made it a global leader in manufacturing, but its undervalued exchange rate has caused friction with other major economies, and it has also been widely criticised for manufacturing large quantities of counterfeit goods.
China is a member of the WTO and is the world's largest trading power, with a total international trade value of US$3.87 trillion in 2012. Its foreign exchange reserves reached US$2.85 trillion by the end of 2010, an increase of 18.7% over the previous year, making its reserves by far the world's largest. China owns an estimated $1.6 trillion of US securities. China, holding over US$1.16 trillion in US Treasury bonds, is the largest foreign holder of US public debt. China is the world's third-largest recipient of inward foreign direct investment (FDI), attracting $115 billion in 2011 alone, marking a 9% increase over 2010. China also increasingly invests abroad, with a total outward FDI of $68 billion in 2010, and a number of major takeovers of foreign firms by Chinese companies.
A graph comparing the 2012 nominal GDPs of major economies in US$ billions, according to IMF data.China now ranks 29th in the Global Competitiveness Index, although it is only ranked 135th among the 179 countries measured in the Index of Economic Freedom. In 2011, 61 Chinese companies were listed in the Fortune Global 500. Measured by total revenues, three of the world's top ten most valuable companies are Chinese, including fifth-ranked Sinopec Group, sixth-ranked China National Petroleum and seventh-ranked State Grid (the world's largest electric utilities company).
China's middle-class population (defined as those with annual income of at least US$17,000) had reached more than 100 million by 2011, while the number of individuals worth more than 10 million yuan (US$1.5 million) was estimated to be 1.02 million in 2012, according to the Hurun Report. Based on the Hurun rich list, the number of US dollar billionaires in China increased from 130 in 2009 to 251 in 2012, giving China the world's second-highest number of billionaires. China's domestic retail market was worth over 20 trillion yuan (US$3.2 trillion) in 2012 and is now growing at over 12% annually, while the country's luxury goods market has expanded immensely, with 27.5% of the global share. However, in recent years, China's rapid economic growth has contributed to severe consumer inflation, leading to increased government regulation. In the early 2010s, China's economic growth rate began to slow amid domestic credit troubles and global economic turmoil.
Nanjing Road, a major shopping street in Shanghai.The Chinese economy is highly energy-intensive and inefficient; China became the world's largest energy consumer in 2010, and still relies on coal to supply over 70% of its energy needs. Coupled with lax environmental regulations, this has led to massive water and air pollution, leaving China with 20 of the world's 30 most polluted cities. Consequently, the government has promised to use more renewable energy, planning to make renewables constitute 30% of China's total energy production by 2050. Efforts have also been made to streamline bureaucracy and reduce wastefulness by government enterprises.
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