The Rise of China Heh-Song Wang Ⅰ.Introduction Ⅱ.Recent Economic Developments Ⅲ.Balance of Payments Ⅳ.Financial Sector Reform Ⅴ.Development Issues and Challenges VI.Development Program and Economic Outlook

Ⅱ.Recent Economic Developments 1.Growth Remains Robust 2.Changing Sources of Growth 3.Price Stability Table 1 Domestic Economy ItemUnit Nominal GDP Real GDP Industrial Production Consumer Prices RMB yuan bn US$ bn % change 13,582 1, ,988 1, ,232 2,

Ⅲ.Balance of Payments 1.Growing Market for the World 2.Increasing Trade Surplus 3.Strong Capital Inflows 4.World's Largest Foreign Exchange Reserves Table 2 External Trade Item Unit Merchandise Exports Annual Increase Merchandise Imports Annual Increase Trade Balance US$ bn % US$ bn % US$ bn

Table 3 Balance of Payments ItemUnit Current Account Balance % GDP Foreign Direct Investment Inflows Gross Official Reserves Total External Debt Total Debt Service Debt Service Ratio Exchange Rate (end-year) US$ bn % US$ bn % ￥ /US$

Ⅳ.Financial Sector Reform 1.Financial Liberalization 2.Banking Reform 3.New Exchange Rate Policy ItemUnit Total Loans Total Deposits M2 Rediscount Rate Time Deposit Rate(1 year) Lending Rate(1 year) RMB yuan bn % p.a. 15, , , , , , , , , Table 4 Financial Statistics

Table 5 Key Indicators of economic and Social Development to 2010 Source: Asian Development Bank, Asian Development Outlook, 2006.

Ⅴ.Development Issues and Challenges 1.Unbalanced Growth among Regions 2.Rural- Urban Income Disparity 3.Overcapacity in Certain Industries 4.Inefficient Use of Energy 5.Environmental Pollution Table 6 GDP and Per Capita GDP of Selected Provinces, 2004 Province/City GDP (yuan billion) Per Capita GDP (yuan) Shanghai Beijing Zhejiang Fujian Jilin Hubei Chongqing Sichuan , , ,307 37,058 23,942 17,218 10,932 10,500 9,608 8,113

Table 7 Per Capita Income of Urban and Rural Households YearUrban Households Rural Households 20006,280.02, ,859.62, ,703.02, ,472.72, ,421.63, ,493.03,255.0 Unit: PMB Yuan

VI. Development Program and Economic Outlook 1.Eleventh Five-Year Program 2.Macroeconomic Projections ItemUnit *2007* Real GDP% change Consumer Prices% change ExportsUS$ bn ,170.1 ImportsUS$ bn Trade BalanceUS$ bn Current Account Balance US$ bn International Reserves US$ bn825.61,073.81,355.5 Table 8 Forecast Summary

Table 9 Actual and Projected GDP in US$ at 2005 PPPs Country Projected growth rate (%) GDP at 2005 PPPs Ranking United States 3.212,33216,9502 China 8.08,09217,5331 Japan 1.54,0094,6624 India 6.93,6037,0153 Germany 1.52,4992,8975 United Kingdom 2.11,8262,2508 France 2.11,8122,2399 Italy 1.61,6951,97810 Russia 5.01,5862,5856 Brazil 3.81,5532,2527