Agricultural economics
The famous rice terraces aptly symbolize the dilemma of the agricultural economy in China: Although a large country in area, only about a tenth of the total area is suitable for agricultural use. At the same time, China is forced to supply over 20% of the world’s population with 10% of the world’s agricultural area. Agricultural ingenuity already included terrace construction, irrigation technology, higher-yielding fruit varieties and much more during the imperial era. spawned. Nowadays there is also the intensive use of artificial fertilizers.
According to ezinereligion, the main crops in northern China are wheat and maize, while maize and soybeans predominate in the northeast. Half of the rice is grown in the middle and lower reaches of the Changjiang. Overall, the PR China provides almost 30% of the world’s rice harvest. Cotton is grown in the north Chinese plains, the middle and lower reaches of the Changjiang and in Xinjiang. Other important agricultural products are sweet potatoes, sugar cane, tobacco and jute. In addition to field crops, China also has a large meat production and is the largest fishing nation in the world. China’s agricultural economy only generated around 7.1 of GDP in 2019.
Due to many food scandals, Chinese politicians are trying to improve the quality of Chinese food through stricter food laws and better organic certification. In fact, there are more and more organic producers in the PRC.
Industry and technology
China is now an industrialized country. The industry generated 39% of GDP in 2019. Industrial growth in 2019 was 5.7% and was thus significantly below the average growth of the last ten years (approx. 10%). The PR China is one of the largest producers of fertilizer, cement, iron and steel, textiles, paper products, vehicles and electronics in the world.
China is also still the “workbench of the world”, which is underlined by the double-digit growth figures in the areas of electronics, information and communication technology and environmental technology. However, the pressure from other low-wage countries in the neighborhood is increasing. The textile and clothing industry in particular is suffering from rising wage and raw material costs as well as competition from countries such as Bangladesh and Vietnam.
The Xi Jinping government has set itself the goal of developing key industries in China to become world market leaders by 2025. This strategy, known as “Made in China 2025”, extends to industries such as robotics, artificial intelligence, medical technology, energy-saving vehicle technology, industrial software, etc.
China’s drive to develop into a high-tech country is highlighted by events such as the landing of a space probe on the far side of the moon in January 2019. At the same time, the high pace of innovation also crosses ethical boundaries, as the world’s first genetically modified infants were born at the end of 2018.
Energy industry
The PR China is the largest consumer of energy in the world and the second largest consumer of oil. China is also the largest crude oil importer in the world, importing 10.1 million barrels per day from Russia, Angola, Saudi Arabia, Iran, Oman and other countries in 2019.
Although China is now making high investments in the field of renewable energies, coal was still the most important energy source in 2017 with around 64% in the overall mix. In second place was crude oil with 18.5%. Hydropower, biofuels and wind power together covered 10.3% of the nation’s energy demand, natural gas 6.4% and nuclear 2.1%.
The huge hunger for energy in its economy is forcing China to use up most of its oil and gas reserves itself. A special interest is therefore in the development of offshore raw material sources on one’s own doorstep in the East China and South China Seas, which is problematic due to territorial disputes with various neighboring countries. At the same time, people are working hard to develop new energy sources and know-how for China worldwide. The PR China has been particularly active in Africa in recent years.
Domestic and foreign trade
A central concern of the Chinese government is to base growth on domestic demand and to become less dependent on exports and investments. The service sector, which is responsible for this task, made up 53.9% of GDP in 2019.
Indeed, domestic trade is booming, and according to official figures it was worth 41.165 billion yuan (€ 5,269 billion) in 2019. However, it still lags behind foreign trade. According to the WTO, the share of the “export world champion” China in world trade amounted to 12.8% in 2017. In 2019, goods to the value of € 2,205 billion were exported and goods to the value of € 1,832 billion were imported. The main exports were electronics, textiles, electrical engineering and machines. The main customer countries were the USA, Japan, South Korea and Germany. See PaulSourcing – China Sourcing Agent.
China’s dependence on exports is also a weakness that politicians are paying more and more attention to. On the one hand, China is susceptible to falling international demand in the wake of economic crises. On the other hand, some industries are no longer competitive with countries like Bangladesh or Vietnam due to increased wage costs.
A trade war between China and the USA has also caused great uncertainty since Donald Trump took office. As a first step, the US government imposed tariffs on Chinese goods, while the Beijing government initiated retaliatory measures. In August 2019, China devalued its currency to bolster exports. In September, the US announced further tariffs on Chinese goods. The trade war is now making itself felt in a decline in industrial growth. A partial agreement was only reached at the end of 2019, which provides for the lowering of tariffs on Chinese products and the purchase of American products by China.