NEW YORK — Any discussion of China’s scale involves huge numbers. The country is home to 1.3 billion people, has an adjusted gross domestic product of $6.45 trillion and includes 22 provinces — with as much landmass as the...
NEW YORK — Any discussion of China’s scale involves huge numbers. The country is home to 1.3 billion people, has an adjusted gross domestic product of $6.45 trillion and includes 22 provinces — with as much landmass as the U.S.
But China is also a land of great diversity and many contrasts that can get lost in those figures. The small pockets of wealthy people in its major cities are miniscule in comparison with the vast numbers of poor rural residents.
China is also a country of great contradictions. The ruling Communist Party controls every aspect of government and the legal system, yet those outsiders who still think of the country as communist would do well to listen to Western executives praise the competitiveness of Chinese businesses.
The leading party is also counting on private employers to continue to create millions of new jobs a year to absorb workers who are losing their former posts at the country’s massive state-run enterprises that are privatizing as China adjusts to its World Trade Organization commitments.
According to the National Bureau of Statistics of China, the country’s GDP last year came to $1.65 trillion, up 9.5 percent from the prior year. That growth rate is so high that Beijing authorities are trying to put the brakes on the country’s economic expansion, for fear of it overheating. When adjusted to account for local purchasing power — a common technique in comparing economies — China’s GDP comes to $6.45 trillion, second only to the U.S.’s $10.99 trillion economy.
In the U.S., China has recently been the subject of growing criticism for the way it manages its exchange rate, pegging the yuan at a rate of about 8.28 to the dollar. China last year invested $206.7 billion in U.S. dollars and U.S. debt to keep the currency, sometimes also called the renminbi, trading at that level. That brought its total foreign currency holdings to $609.9 billion. Advocates of U.S. exporters complain the peg undervalues the yuan by as much as 40 percent, which they assert gives Chinese exports an unfair competitive advantage. Economists counter that China’s dollar holdings have made it possible for the U.S. to continue its economic growth, despite a growing trade deficit.
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