• GDP: US$4.5 trillion.
• Main exports: Machinery and equipment, plastics, optical and medical equipment, iron and steel.
• Main imports: Machinery and equipment, oil, mineral fuels, plastics, organic chemicals, optical and medical equipment, iron and steel.
• Main trade partners: USA, Japan, Hong Kong (SAR), Korea (Rep) and Germany.

The vast Chinese economy has developed in fits and starts since the founding of the People’s Republic in 1949. Its basic structure is mostly that of a developing country, with the majority of the population employed on the land. However, there is a significant industrial base and expanding pockets of advanced manufacturing and technological enterprises, concentrated on the eastern coast and the Special Administrative/Economic Zones (including Hong Kong and Macau).
The economy has undergone rapid and consistent growth of approximately 8 to 9 per cent annually since the introduction of economic reforms in the late 1980s. However, the new wealth has not been evenly distributed and there are now major disparities between what are sometimes known as the ‘blue China’ – the coastal cities and Special Zones – and the inland ‘brown China’ of low-grade agriculture, antiquated industrial operations and widespread social and economic deprivation. Although modernisation of the agricultural sector is underway, there has been a major shift of population from the countryside to the cities. And the Government is still prepared to undertake massive engineering projects such as the Three Gorges Dam hydro-electric project, which may displace anything up to one million people.
China is the world’s largest producer of rice and a major producer of cereals and grain. Large mineral deposits, particularly coal and iron ore, provide the raw material for an extensive steel industry. China is self-sufficient in oil and is developing a petrochemicals industry. Other important minerals include tungsten, molybdenum, tin, lead, bauxite (aluminium), phosphates and manganese. In the last 10 years, central Government policy has switched the emphasis in development from heavy to light industry and promoted the evolution of a service sector. Chemicals and high technology industries have grown particularly quickly. The fundamental changes that have taken place in the Chinese economy were introduced under what was described as the ‘socialist market economy’, under which market mechanisms were introduced to attract foreign investment and improved trade terms. Foreign companies were encouraged both to sell products in China and to establish joint ventures – under certain conditions – with Chinese commercial organisations. Such problems as emerged were put into perspective by the 1997 Asian economic crisis. China, because of its vast domestic market and highly regulated banking system, did not suffer nearly as badly as many of the region’s smaller economies. Government targets for production and growth continued to be met and still are. In 2003, the economy accelerated to reach 10 per cent growth, the trade balance showed a healthy surplus, and price inflation was negligible. The economy has already begun to show the benefits of China’s recently acquired membership of the World Trade Organization in 2001. (This was a major foreign policy objective for the Jiang Government.) However, Chinese markets will now face competition from abroad. In 2005, China's central bank announced that it would stop pegging its currency to the US dollar; this could have potentially far-reaching effects on the global economy and US consumers.

Weights and measures are mainly metric, but several old Chinese weights and measures are still used. Liquids and eggs are often sold by weight. The Chinese foot is 1.0936 of an English foot (0.33m). Suits should be worn for business visits. Appointments should be made in advance and punctuality is expected. Visiting cards should be printed with a Chinese translation on the reverse. Business visitors are usually entertained in restaurants where it is customary to arrive a little early and the host will toast the visitor. It is customary to invite the host or hostess to a return dinner. Business travellers in particular should bear in mind that the Government of the United Kingdom recognises the Government of the People’s Republic of China as being the only Government of China, as do the United Nations. Best months for business visits are April to June and September to October. Office hours: Mon-Fri 0800-1700, midday break of one to two hours.

China Council for the Promotion of International Trade (CCPIT)
London office: 40-41 Pall Mall, London SW1Y 5JQ, UK
Tel: (020) 7321 2044.
Website: www.ccpit.com
Beijing office: 1 Fu Xing Men Wai Jie, Beijing 100860, People's Republic of China
Tel: (10) 6801 3344.
Website: www.ccpit.com