China is an important and strategic nation not only in the Asian continent, but from the international perspective as well. In recent years, with China adopting the liberalization and globalization policies in right earnest, the world community has been forced to take note of China’s strength while expressing different kinds of reactions. While on the one hand China is not liked by some countries for the cheaper labor rates, some countries issue boycott calls for products exported from the mainland China for a number of reasons.

Infringement of intellectual property rights (IPR) laws was another reason for which the country has received negative media coverage. Even after organizing a never before show in the form of Olympics in the year 2008, by pumping in huge amounts of its resources, the country has been able to take the recessionary trends in its stride. While a number of developed nations like US, Germany, UK etc. were under acute pressure on account of recession, China continued to showcase an average GDP growth of 10.

3 percent during the period of 2003–09 (Datamonitor, 2010). It is worthwhile here to note that while the credit crunch led recession resulted in negative growth figures in many countries around the world, China was able to come out with growth figures of around 9 percent even in the year 2008, a dip of about 4.6 percent from the 12.6 percent in the year 2007 (Datamonitor, 2010).

Stimulus packages provided by the government certainly had a big role in maintaining such growth figures, but then such packages were also provided by other governments as well. Chinese Premier Wen Jiabao was a satisfied person after finding out that the economic stimulus packages had the desired impact on sustaining the economic growth of the country. The stimulus packages worth more than $595 seems to have the desired impact on almost all aspects of the economy, as the industrial sector was also able to provide an estimated 22 million jobs to the job market (Xinhua, 2010). It is worth pointing out here that despite the stimulus packages provided by the US government the job market in America has lost about 7.9 million jobs since the start of the recession (Reuters, 2010). Respective Chinese governments have put in place the economic reforms for about two decades now. It has witnessed gradual transition of Chinese economy from a highly regulated economy to an open one.

Impressive GDP growth, improvement in economic indicators, increasing income levels of an average Chinese are some of the factors pointing towards the increased say of Chinese people in world affairs. Hoguet, (2004) pointed out that Chinese economy has shown a growth rate of 9.3 percent per annum, with a per capita income that is growing at about 10 percent per annum. The country seems to have continued the trend with a robust performance from its industrial sector. The industrial sector accounted for 49 percent of the GDP in the year 2009 followed by its services and agriculture sector with contributions of 41 percent and 10 percent respectively (Datamonitor, 2010).

Key statistics of Chinese economic development include; Robust GDP figures: On an average the GDP growth rate was 10.3 percent during the period 2003-2009. There were some dips in between, which were set off by impressive growth figures in subsequent years. Inflation: The inflation figures have been a cause of worry for almost all major economies around the world, with unabated efforts from respective governments to bring it under control. Rising inflation figures have been a cause of worry for the Chinese economy as well. The National Bureau of Statistics of China indicate that the year-on-year consumer price inflation rate reached a high of 3.3 percent in July 2010 from 2.

9 percent in June 2010 i.e. in just about a month (EIU, 2010). Investment inflows from abroad: Foreign investments have played key role in the revival and sustenance of Chinese economy. While on the one hand China has been providing a cost effective manufacturing environment to the leading industrialists from around the world, on the other the indigenous manufacturing sector has been able to provide better export figures for the country. During the beginning of the liberalizing policies the focus of Chinese government was towards inviting as much of foreign investment as possible, but with consolidation of investments from abroad, the government has started focusing on the quality of investments instead of sheer quantity. While the FDI figures for 2006 stood at $69.

5 billion, it was $108 billion in 2008 (Datamonitor, 2010). Leading manufacturing units in different sectors like Automobile, Computers, and Telecommunication etc. have ensured that they are in a position to leverage the location advantage by shifting their manufacturing facilities in the mainland China. Attractive areas for investments from abroad include manufacturing, energy conservation, environmental protection and modern services.

Strong Focus on Infrastructure Development: Infrastructure facilities prove to be the backbone of a vibrant economic environment in any country. If the industrial sector is provided with a robust infrastructure, it helps in instilling a sense of confidence amongst the manufacturers as well as service providers. The transportation system of China is stated to be one of the best in the Asian continent. With an effective and widespread railway network China has been able to connect even the remotest corners of the country to the centers of shipping and manufacturing. The study by Datamonitor (2010) indicates that Chinese railways had its footprints on an area of more than 78,000km by the end of the year 2007.

The railway network is amply supported by the road network and other means of transport. Overseas Investments: In sync with the invitation to foreign governments and companies for investment in the country, a number of Chinese companies have also been venturing out by entering into strategic tie-ups with foreign companies and governments. This is helping the economy of China in many ways. While the revenues generated from such ventures have a role in boosting the economy of China, it is also helping in putting off the deceleration in domestic investment climate in the recent past. It is pertinent to note that the nominal urban fixed-asset investment growth in the country has slipped from 25.

5 percent in January-June 2010 to 24.9 percent in January-July 2010 (EIU, 2010). In August 2010, Tongling, and China Railway Construction came out with announcements of their intention to develop a copper project in Ecuador at a cost of about $3 billion (EIU, 2010). Corriente Resources, a Canadian mining company, was also acquired by Chinese investors in the year 2009. Adherence to the environment issues: There have been allegations to the effect that Chinese companies have not been following the environment standards.

But, the government of China has been continuously on an effort to improve its environment adherence record. In August 2010 itself the Ministry of Industry and Information Technology issued orders to over 2,000 energy-intensive factories in this regard (EIU, 2010). Such measures are bound to further strengthen the Chinese economic environment.


Datamonitor (2010). Country Analysis Report – China: In-depth PESTLE Insights. Datamonitor Americas, New York. EIU (2010).

Country Report –China. Economic Intelligence Unit, UK, London. Hoguet, George R. (2004). How Best to Benefit from China. State Street Global Advisors, Boston 2004. Kaiser, Emily (2010). Will the U.

S. job market break its losing streak? Reuters, Jan 3, 2010. Available online at http://www. (Sept, 16, 2010). Xinhua (2010). China’s economic stimulus creates 22 million jobs.

Available online at (Sept 16, 2010)


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