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China5 中国概况英文版

COUNTRY PROFILE: CHINA

February 2005 Click to Enlarge Image

COUNTRY

Formal Name: People’s Republic of China

(Zhonghua Renmin Gonghe Guo). 中华人民共和国

Short Form: China (Zhongguo). 中国

Term for Citizen(s) Chinese (singular and plural) (Huaren). 华人

Capital: Beijing (Northern Capital). 北京

Major Cities: Based on 2000 census data, the largest cities are the four centrally administered municipalities, which include dense urban areas, suburbs, and large rural areas: Chongqing (30.5 million), Shanghai (16.4 million), Beijing (13.5 million), and Tianjin (9.8 million). Other major cities are Wuhan (5.1 million), Shenyang (4.8 million), Guangzhou (3.8 million), Chengdu (3.2 million), Xi’an (3.1 million), and Changchun (3 million). China has 12 other cities with

populations of between 2 million and 2.9 million and 20 or more other cities with populations of more than 1 million persons.

Independence: As the result of a revolution that broke out on October 10, 1911, on February 12, 1912, the Qing Dynasty (1644–1911) was formally replaced by the government of the Republic of China. The People’s Republic of China was officially established on October 1, 1949.

Public Holidays: The official national holidays are New Year’s Day (January 1); Spring Festival or Lunar New Year (movable dates—three days—in January and February), Labor Day (May 1), and National Day (two-day observance on October 1–2). Also commemorated are International Women’s Day (March 8), Youth Day (May 4), Children’s Day (June 1), Chinese Communist Party Founding Day (July 1), Army Day (August 1), and Teachers’ Day (September 10).

Flag: Click to Enlarge Image smaller yellow five-pointed stars (arranged in a vertical arc toward the

of China under the leadership of the Chinese Communist Party. The flag

with the formal announcement of the founding of the People’s Republic of China.

HISTORICAL BACKGROUND

Prehistory: Hominid activity dates back 4 to 5 million years in China, and evidence has been found of early paleolithic hominids living some 1 million years ago. The remains of Homo erectus (Peking Man or Sinanthropus pekinensis), found southwest of Beijing in 1927, date from around 400,000 years ago. Some 7,000 neolithic sites (some as old as ca. 9000 B.C.) have been found in North China, the Yangzi (Changjiang or Yangtze) River Valley, and southeast coastal areas. These sites include a neolithic agricultural village in Shaanxi Province, dating from around 4500 B.C. to 3750 B.C., with a moat for security and evidence of wood-framed, mud and straw houses, colored pottery, slash-and burn farming, and dead buried in nearby cemeteries. The oldest neolithic city found in China was uncovered by archaeologists in Henan Province and dates back to between 4,800 and 5,300 years ago.

Early History: The first recognized dynasty—the Xia—lasted from about 2200 to 1750 B.C. and marked the transition from the late neolithic age to the Bronze Age. The Xia was the beginning of a long period of cultural development and dynastic succession that led the way to the more urbanized civilization of the Shang Dynasty (1750–1040 B.C.). Hereditary Shang kings ruled over much of North China, and Shang armies fought frequent wars against neighboring settlements and nomadic herders from the north. The Shang capitals were centers of sophisticated court life, and the king was the shamanistic head of the ancestor- and spirit-worship cult. Intellectual life developed in significant ways during the Shang period and flourished in the next dynasty—the Zhou (1040–256 B.C.). China’s great schools of intellectual thought—Confucianism, Legalism, Daoism, Mohism, and others—all developed during the Zhou Dynasty. From its earliest origins, China’s history has been one of migration, amalgamation, and development that brought about a distinctive system of writing, philosophy, art, and social and political organization and civilization with continuity over the past 4,000 years. Since the beginning of recorded history (at least since the Shang Dynasty), the people of China have developed a strong sense of their origins, both mythological and real, and kept voluminous records concerning both. It is as a result of these records, augmented by numerous archaeological discoveries in the second half of the twentieth century, that information concerning the ancient past, not only of China but also of much of East, Central, and Inner Asia, has survived.

The Imperial Period: Over several millennia, China absorbed the people of surrounding areas into its own civilization while adopting the more useful institutions and innovations of the conquered people. Peoples on China’s peripheries were attracted by such achievements as its early and well-developed ideographic written language, technological developments, and social and political institutions. The refinement of the Chinese people’s artistic talent and their intellectual creativity, plus the sheer weight of their numbers, has long made China’s civilization predominant in East Asia. The process of assimilation continued over the centuries through conquest and colonization until what is now known as China Proper was brought under unified rule. The Chinese polity was first consolidated and proclaimed an empire during the Qin Dynasty (221–206 B.C.). Although short-lived, the Qin Dynasty set up lasting unifying structures, such as standardized legal codes, bureaucratic procedures, forms of writing, coinage, and a pattern of thought and scholarship. These were modified and improved upon by the successor Han Dynasty (206 B.C.–A.D. 220). Under the Han, a combination of the stricter Legalism and the more

benevolent, human-centered Confucianism—known as Han Confucianism or State Confucianism—became the ruling norm in Chinese culture for the next 2,000 years. The Chinese also left an enduring mark on the people beyond their borders, especially those of Korea, Japan, and Vietnam.

Another recurrent historical theme has been the unceasing struggle of the largely agrarian Chinese against the threat posed to their safety and way of life by non-Chinese peoples on the margins of their territory. For centuries, most of the foreigners that China’s officials saw came from or through the Central and Inner Asian societies to the north and west. This circumstance conditioned the Chinese view of the outside world. The Chinese saw their domain as the self-sufficient center of the universe, and they derived from this image the traditional (and still used) Chinese name for their country—Zhongguo, literally Middle Kingdom or Central Nation. Those at the center (zhong) of civilization (as they knew it), distinguished themselves from the “barbarian” peoples on the outside (wai), whose cultures were inferior by Chinese standards. For centuries, China faced periodic invasions from Central and Inner Asia—including major incursions in the twelfth century by the Khitan and the Jurchen, in the thirteenth century by the Mongols, and in the seventeenth century by the Manchu, all of whom left an imprint on Chinese civilization while heightening Chinese perceptions of threat from the north. Starting in the pre-Qin period, Chinese states built large defensive walls that, in time, came to form a “Great Wall.” The Great Wall is actually a series of non-connected walls, forts, and other defensive structures built or rebuilt during the Qin, Han, Sui (A.D. 589–618), Jin (1115–1234), and Ming (1368–1643) periods, rather than a single, continuous wall. The Great Wall reaches from the coast of Hebei Province to northwestern Gansu, officially 6,000 kilometers in length, although unofficial estimates range from 2,700 kilometers to as much as 50,000 kilometers depending on what is being measured.

The Tang (618–907) and Song (960–1279) dynasties represented high points of Chinese cultural development and interaction with distant foreign lands. The Yuan, or Mongol, Dynasty (1279–1368) was a period of foreign occupation but even greater interaction with other cultures. Despite these periods of openness, which brought occasional Middle Eastern and European envoys and missionaries, the China-centered (“sinocentric”) view of the world was largely undisturbed until the nineteenth century, when China’s first serious confrontations occurred with the European nations. The Manchu had conquered China and established the Qing Dynasty (1644–1911), ushering in a period of great conquest and a long period of relative peace. When Europeans began arriving in increasing numbers, Chinese courtiers expected them to conduct themselves according to traditional tributary relations that had evolved over the centuries between their emperor and representatives of Central Asian states who came via the Silk Road and others who came from Southeast Asia and the Middle East via the sea trade. The Western powers arrived in China in force at a time of tremendous internal rebellion and economic and social change. By the mid-nineteenth century, China had been defeated militarily by superior Western technology and weaponry, and the government was faced with mounting rebellions. Facing dynastic breakdown and imminent territorial dismemberment, China began to reassess its position with respect to its own internal development and the Western incursions. By 1911 the millennia-old dynastic system of imperial government was brought down as a result of the efforts made during a half century of reform and modernization and, finally, revolution.

Republican China: The end of imperial rule was followed by nearly four decades of major socioeconomic development and social-political discord. The initial establishment of a Western-style government—the Republic of China—was followed by several efforts to restore the throne. Lack of a strong central authority led to regional fragmentation, warlordism, and civil war. On top of this came the invasion of Manchuria and China by Imperial Japan and the ensuing chaos of World War II and return to civil war. The main figure in the revolutionary movement that overthrew imperial rule was Sun Yatsen (1866–1925), who, along with other republican political leaders, endeavored to establish a parliamentary democracy. They were thwarted by warlords with imperial and quasi-democratic pretensions who resorted to assassination, rebellion, civil war, and collusion with foreign powers (especially Japan) in their efforts to grab power. A major political and social movement during this time was the May Fourth Movement (1919), in which calls for the study of “science” and “democracy” were combined with a new patriotism that became the focus of an anti-Japanese and antigovernment movement. Ignored by the Western powers and in charge of a southern military government with its capital in Guangzhou, Sun Yatsen eventually turned to the new Soviet Union for inspiration and assistance. The Soviets obliged Sun and his Guomindang (Nationalist Party). Soviet advisers helped the Guomindang establish political and military training activities. A key individual in these developments was Jiang Jieshi (1888–1975; Chiang Kai-shek in Yue dialect), one of Sun’s lieutenants from the early revolution days. But Moscow also supported the new Chinese Communist Party (CCP), which was founded by Mao Zedong (1893–1976) and others in Shanghai in 1921. The Soviets hoped for consolidation of the Guomindang and the CCP but were prepared for either side to emerge victorious. The struggle for power in China began between the Guomindang and the CCP as both parties also sought the unification of China.

Sun’s untimely death from illness in 1925 brought a split in the Guomindang and eventually an uneasy united front between the Guomindang and the CCP. Jiang Jieshi’s military academy trained a new generation of officers who would soon embark on the Northern Expedition. Zhou Enlai (1898–1976), who later become premier of China under the communists, was a political commissar at this academy. Jiang, who succeeded Sun Yatsen, broke with his Soviet advisers and with the communists but by 1927 was successful in defeating the northern warlords and unifying China. The years 1928 to 1937 are often referred to as the Nanjing Decade because of the national development that took place under Jiang’s presidency before World War II when China’s capital was in Nanjing (Southern Capital). The Northern Expedition had culminated in the capture of Beijing, which was renamed Beiping (Northern Peace). Thereafter, the Nanjing government received international recognition as the sole legitimate government of China.

With the 1927 split between the Guomindang and the CCP, the CCP began to engage in armed struggle against the Jiang regime. The Red Army was established in 1927, and, after a series of uprisings and internal political struggles, the CCP announced the establishment in 1931 of the Chinese Soviet Republic under the chairmanship of Mao in Jiangxi Province in south-central China. After a series of deadly annihilation campaigns by Jiang’s armies, the Red Army and the CCP apparatus broke out of Jiangxi and embarked on their epic 12,500-kilometer Long March of 1934–35 to a new stronghold in Shaanxi Province in the north. During the march, Mao consolidated his hold over the CCP when, in 1935, he became chairman, a position he held until his death in 1976.

Japan invaded Manchuria in 1931, established the puppet government of Manchukuo in 1932, and soon pushed south into North China. The 1936 Xi’an Incident—in which Jiang Jieshi was held captive by local military forces until he agreed to a second front with the CCP—brought new impetus to China’s resistance to Japan. However, a clash between Chinese and Japanese troops outside Beiping on July 7, 1937, marked the beginning of full-scale warfare. Shanghai was attacked and quickly fell. An indication of the ferocity of Tokyo’s determination to annihilate the Guomindang government is seen in the major atrocity committed by the Japanese army in and around Nanjing during a six-week period in December 1937 and January 1938. Known in history as the Nanjing Massacre, wanton rape, looting, arson, and mass executions took place. In one horrific day, some 57,418 Chinese prisoners of war and civilians reportedly were killed. Japanese sources admit to a total of 142,000 deaths during the Nanjing Massacre, but Chinese sources report upward of 340,000 deaths and 20,000 women raped. Japan expanded its war effort in the Pacific, Southeast, and South Asia, and by 1941 the United States had entered the war. With Allied assistance, Chinese military forces—both Guomindang and CCP—defeated Japan. Civil war between the Guomindang and the CCP broke out in 1946, and the Guomindang forces were defeated and had retreated to a few offshore islands and Taiwan by 1949. Mao and the other CCP leaders reestablished the capital in Beiping, which they renamed Beijing.

People’s Republic of China: The communist takeover of the mainland in 1949 set the scene for building a new society built on a Marxist-Leninist model replete with class struggle and proletarian politics fashioned and directed by the CCP. The People’s Republic of China was barely established (October 1, 1949) when it felt threatened by a possible attack from the United States, which was at war in North Korea, and elected to support its neighbor, the new communist state, the Democratic People’s Republic of Korea. The Chinese People’s Volunteer Army invaded the Korean Peninsula in October 1950 and, with its North Korean ally, enjoyed initial military success and then a two-year stalemate, which culminated in an armistice signed on July 27, 1953. During this time, China took control of Tibet. It also embarked on a political rectification movement against “enemies of the state” and “class struggle” under the aegis of agrarian reform as part of the “transition to socialism.”

Periods of consolidation and economic development facilitated by President Liu Shaoqi (1898–1969) and Premier Zhou Enlai were severely altered by disastrous anti-intellectual (such as the Hundred Flowers Campaign, 1957), economic (the Great Leap Forward, 1958–59), and political (the Great Proletarian Cultural Revolution, 1966–76) experiments directed by Mao Zedong and his supporters. During this time, China broke with the Soviet Union by 1959, fought a border war with India in 1962, and skirmished with Soviet troops in 1969. In 1969 Mao anointed Lin Biao (1908–71), a radical People’s Liberation Army marshal, as his heir apparent. By 1971 Lin was dead, the result of an airplane crash in Mongolia following an alleged coup attempt against his mentor. Less radical leaders such as Zhou Enlai and Vice Premier Deng Xiaoping (1904–97), who had been politically rehabilitated after his disgrace early in the Cultural Revolution, asserted some control, and negotiations were held with the United States, ending a generation of extreme animosity. The 1976 death of Mao brought an end to extremist influence in the party and the onset of pragmatic economic reforms and opening to the outside world under the leadership of Deng Xiaoping and his supporters.

Reform-era activities began in earnest in 1978 and eventually made China one of the largest world economies and trading partners as well as an emerging regional military power. The Four Modernizations (agriculture, industry, science and technology, and national defense) became preeminent forces within the party, state, and society. The well-being of China’s people increased substantially, especially along coastal areas and in urban areas involved in manufacturing for the world market. And yet, the so-called “fifth modernization”—politics—occurred at too slow a pace for the emerging generation. China’s incipient democracy movement was subdued at the same time as China’s economic reforms were launched, in 1978–79. As Deng consolidated his control of China, the movement rose to the fore again in the mid-1980s, and

pro-reform leaders were placed in positions of authority. Zhao Ziyang (1919–2005) was premier, and Hu Yaobang (1915–1989) was CCP general secretary. Deng himself never held a top position and was satisfied with being the “power behind the throne.” The democracy movement, however, was violently suppressed by the military in the 1989 Tiananmen incident.

In the years after Tiananmen, conservative reformers led by Deng protégé Jiang Zemin (who became president of China, chairman of both the state Central Military Commission and party Central Military Commission, and general secretary of the CCP) endured and eventually overcame world criticism. Deng went into retirement, and the rising generation of technocrats ruled China and oversaw its modernization. Political progress gradually occurred. Term limits were placed on political and governmental positions at all levels, and succession became orderly. Elections involving several candidates for the same position began to take place at the local level. Tens of thousands of Chinese students went overseas to study; many returned to participate in the building of modern China, some to become millionaires in the new “socialist economy with Chinese characteristics.” As a sign of its emerging superpower status, in October 2003 China launched its first man into space, on a 14-orbit, 22-hour journey. Plans for a second launch were later announced for 2005. As the twenty-first century began, a new generation of leaders emerged and gradually replaced the old. Position by position, Jiang Zemin gave up his leadership role and by 2004 had moved into a position of elder statesman, still with obvious influence exerted through his protégés who were embedded at all levels of the government. The “politics in command” of the Maoist past were often subliminal but still present as technocrat Hu Jintao emerged—by 2004—as the preeminent leader (president of China, chairman of both the state Central Military Commission and party Central Military Commission, and general secretary of the CCP) with grudging acceptance by Jiang and his supporters.

GEOGRAPHY

Location: Usually described as part of East Asia,

west of the Korean Peninsula and insular Japan, north

of Southeast Asia, and east of Central and South Asia.

Size: China has a total area of nearly 9,596,960 square

kilometers. Included in this total are 9,326,410 square

kilometers of land and 270,550 square kilometers of inland

Click to Enlarge Image

lakes and rivers. From east to west, the distance is about 5,000 kilometers, from the Heilong Jiang (Amur River) to the Pamir Mountains in Central Asia; from north to south, the distance is approximately 4,050 kilometers, from Heilongjiang Province to Hainan Province in the south, and another 1,450 kilometers farther south to Zengmu Shoal, a territorial claim off the north coast of Malaysia.

Land Boundaries: China has a total of 22,117 kilometers of land boundaries with 14 other nations. These borders include: Afghanistan (76 kilometers), Bhutan (470 kilometers), Burma (2,185 kilometers), India (3,380 kilometers), Kazakhstan (1,533 kilometers), North Korea (1,416 kilometers), Kyrgyzstan (858 kilometers), Laos (423 kilometers), Mongolia (4,677 kilometers), Nepal (1,236 kilometers), Pakistan (523 kilometers), Russia (4,300 kilometers), Tajikistan (414 kilometers), and Vietnam (1,281 kilometers).

Length of Coastline: China’s coastline extends 14,500 kilometers, from the border with North Korea in the north to Vietnam in the south. China’s coasts are on the East China Sea, Korea Bay, Yellow Sea, and South China Sea.

Maritime Claims: China claims a 12-nautical-mile territorial sea, a 24-nautical-mile contiguous zone, a 200-nautical-mile exclusive economic zone, and a 200-nautical-mile continental shelf or the distance to the edge of the continental shelf.

Boundary Disputes: China is involved in a complex dispute with Malaysia, Philippines, Taiwan, Vietnam, and possibly Brunei over the Spratly (Nansha) Islands in the South China Sea. The 2002 “Declaration on the Conduct of Parties in the South China Sea” eased tensions but fell short of a legally binding code of conduct desired by several of the disputants. China also occupies the Paracel (Xisha) Islands, which are claimed by Vietnam and Taiwan, and asserts a claim to the Japanese-administered Senkaku Islands (Diaoyu Tai) in the Pacific Ocean. Most of the mountainous and militarized boundary with India is in dispute, but Beijing and New Delhi have committed to begin resolution with discussions on the least disputed middle sector. China’s de facto administration of the Aksai Chin section of Kashmir (which is disputed by India and Pakistan) is the subject of a dispute between China and India. India does not recognize Pakistan’s ceding lands to China in a 1964 boundary agreement. In October 2004, China signed an agreement with Russia on the delimitation of their entire 4,300-kilometer-long border, which had long been in dispute.

Topography: Mountains cover 33 percent of China’s landmass, plateaus 26 percent, basins 19 percent, plains 12 percent, and hills 10 percent. Thus, 69 percent of China’s land is mountains, hills, and highlands. China has five main mountain ranges, and seven of its mountain peaks are higher than 8,000 meters above sea level. The main topographic features include the Qingzang (Qinghai-Tibet) Plateau at 4,000 meters above sea level and the Kunlun, Qin Ling, and Greater Hinggan ranges. In the Himalaya Mountains, the world’s highest, are Mount Everest at 8,848 meters and K-2 at 8,611 meters, shared with Nepal and Pakistan, respectively. The lowest inland point in China—the second lowest place in the world after the Dead Sea—is at Turpan Pendi, 140 kilometers southeast of Urumqi, capital of Xinjiang Uygur Autonomous Region, at 154 meters below sea level. With temperatures that have reached 49.6 C, it is also one the hottest places in China.

Principal Rivers: China has 50,000 rivers totaling some 420,000 kilometers in length and each having a catchment area of more than 100 square kilometers. Some 1,500 of these rivers each have catchment areas exceeding 1,000 square kilometers. Most rivers flow from west to east and empty into the Pacific Ocean. The major rivers are the Yangzi (Changjiang or Yangzte River), which rises in Tibet, flows through Central China, and, having traveled 6,300 kilometers, enters the Yellow Sea near Shanghai. The Yangzi has a catchment area of 1.8 million square kilometers. It is the third longest river in the world after the Amazon and the Nile. The second longest river in China is the Huanghe (Yellow River), which also rises in Tibet and travels circuitously for 5,464 kilometers through North China before reaching the Bo Hai Gulf on the north coast of Shangdong Province. It has a catchment area of 752,000 square kilometers. The Heilongjiang (Heilong or Black Dragon River) flows for 3,101 kilometers in Northeast China and an additional 1,249 in Russia, where it is known as the Amur. The longest river in South China is the Zhujiang (Pearl River), which is 2,214 kilometers long. Along with its three tributaries, the Xi, Dong, and Bei—West, East, and North—rivers, it forms the rich Zhujiang Delta near Guangzhou, Zhuhai, Macau, and Hong Kong. Other major rivers are the Liaohe in the northeast, Haihe in the north, Qiantang in the east, and Lancang in the southwest.

Climate: Most of the country is in the northern temperate zone. There are complex climatic patterns ranging from the cold-temperate north to the tropical south, with subarctic-like temperatures in the Himalaya Mountains, resulting in a temperature difference of some 40E C from north to south. Temperatures range from –30E C in the north in January to 28E C in the south in July. Annual precipitation varies significantly from region to region, with a high of 1,500 millimeters annually along the southeastern coast and a low of fewer than 50 millimeters in the northwest. There is an alternating wet monsoon in the summer and a dry monsoon in winter. North China and southward are affected by the seasonal cold, dry winds from Siberia and the Mongolia Plateau between September/October and March/April. Summer monsoon winds bring warm and wet currents into South China and northward.

Natural Resources: China has substantial mineral reserves and is the world’s largest producer of antimony, natural graphite, tungsten, and zinc. Other major minerals are bauxite, coal, crude petroleum, diamonds, gold, iron ore, lead, magnetite, manganese, mercury, molybdenum, natural gas, phosphate rock, tin, uranium, and vanadium. With its vast mountain ranges, China’s hydropower potential is the largest in the world.

Land Use: Based on 2001 estimates, 15.4 percent (about 1.4 million square kilometers) of China’s land is arable. About 1.2 percent (some 116,580 square kilometers) is planted to permanent crops. With comparatively little planted to permanent crops, intensive agricultural techniques are used to reap harvests that are sufficient to feed the world’s largest population and still have some for export. An estimated 525,800 square kilometers of land are irrigated. Environmental Factors: The major current environmental issues in China are air pollution (greenhouse gases and sulfur dioxide particulates) from reliance on coal that produces acid rain; water shortages, particularly in the north; water pollution from untreated wastes; deforestation; an estimated loss of 20 percent of agricultural land since 1949 to soil erosion and economic development; desertification; and illegal trade in endangered species. Deforestation has been a major contributor to China’s most significant natural disaster: flooding. In 1998 some 3,656

people died and 230 million people were affected by flooding. China’s national carbon dioxide (CO2) emissions are among the highest in the world and increasing annually. The CO2 emissions in 1991 were estimated at 2.4 billion tons; by 2000 that level, according to United Nations (UN) statistics, had increased by 16 percent to nearly 2.8 billion tons. According to the International Energy Agency (IEA), between 1990 and 2002 the increase was more along the lines of 45 percent. These amounts cited by the UN are more than double those of India and Japan but still less than half those of the United States (comparable figures for Russia are not available but are estimated at probably half the level of China’s). China’s ozone depleting potential also is high but was decreasing in the early twenty-first century. The CO2 emissions are mostly produced by coal-burning energy plants and other coal-burning operations. Better pollution control and billion-dollar cleanup programs have helped reduced the growth rate of industrial pollution. Time Zone: Although China crosses all or part of five international time zones, it operates on a single uniform time, China Standard Time (CST; Greenwich Mean Time plus eight hours), using Beijing as the base. China does not employ a daylight savings time system.

SOCIETY

Population: China’s population reached 1.3 billion on January 5, 2005. The annual population growth rate was estimated at 0.57. The nation’s overall population density was 135 persons per square kilometer in 2003. The most densely populated provinces are in the east: Jiangsu (712 persons per square kilometer), Shangdong (587 persons per square kilometer), and Henan (546 persons per square kilometer). Shanghai was the most densely populated municipality, with

2,646 persons per square kilometer. The least densely populated areas are in the west, with Tibet having the lowest density at only 2 persons per square kilometer. Sixty-two percent of the population lived in rural areas in 2004, while 38 percent lived in urban settings. About 94 percent of population lives on approximately 46 percent of land. Based on 2000 census data, the provinces with the largest populations were Henan (91.2 million), Shandong (89.9 million), Sichuan (82.3 million, not including Chongqing municipality, which was formerly part of Sichuan Province), and Guangdong (85.2 million). The smallest were Qinghai (4.8 million) and Tibet (2.6 million). In the long term, China faces increasing urbanization, with nearly 70 percent living in urban areas by 2035.

Demography: China has been the world’s most populous nation for many centuries. When China took its first post-1949 census in 1953, the population stood at 582 million; by the fifth census in 2000, the population had almost doubled, reaching 1.2 billion. China’s fast-growing population was a major policy matter for its leaders in the mid-twentieth century, and, in the early 1970s they implemented a stringent one-child birth-control policy. As a result of that policy, China successfully achieved its goal of a more stable and much-reduced fertility rate; in 1971 women had an average of 5.4 children versus an estimated 1.7 children in 2004. Nevertheless, the population continues to grow, and people want more children. There is also a serious gender imbalance. Census data obtained in 2000 revealed that there were 119 boys born for every 100 girls and, among China’s “floating population” (see Migration), the ratio is as high as 128:100. These situations led Beijing in July 2004 to ban selective abortions of female fetuses. Additionally, life expectancy has soared and China now has an increasingly aging population; it

is projected that 11.8 percent of the population in 2020 will be 65 years of age and older. Based on 2004 estimates, China’s age structure is zero to 14 years of age—22.3 percent; 15 to 64 years—70.3 percent, and 65 years and older—7.5 percent. Estimates made in 2004 indicate a birthrate of nearly 12.9 births per 1,000 and a death rate of 6.9 per 1,000. In 2004 life expectancy at birth was estimated at 73.7 years for women and 70.4 for men, or 71.9 years for both. The infant mortality rate was estimated at 25.3 per 1,000 live births overall (29.2 per 1,000 for females and 21.8 for males).

Migration: In 2004 it was estimated that China was experiencing a –0.4 per 1,000 population net migration rate. Of major concern in China is its growing “floating population” (liudong renkou), a large number of people moving from the countryside to the city, from developed economic areas to underdeveloped areas, and from the central and western regions to the eastern coastal region, as a result of fast-paced reform-era economic development and modern agricultural practices that have reduced the need for a large agricultural labor force. Although residency requirements have been relaxed somewhat, the floating population does not have official permission for permanent residence in the receiving cities and towns. As early as 1994, it was estimated that China had a surplus of about 200 million agricultural workers, and it was expected the number would increase to 300 million in the early twenty-first century. Thus, it is expected that the floating population will expand further into the long-term future. It was reported in 2005 that the floating population had increased from 70 million in 1993 to 140 million in 2003, thus exceeding 10 percent of the national population and accounting for 30 percent of all rural laborers. According to the 2000 national census, population flow inside a province accounted for 65 percent of the total while that crossing provincial boundaries accounted for 35 percent. Young and middle-aged people account for the vast majority of this floating population, with those between 15 and 35 years of age accounting for more than 70 percent.

Other migration issues include the more than 2,000 Tibetans who cross into Nepal annually, according to the United Nations High Commissioner for Refugees (UNHCR). The government tries to prevent this out-migration from occurring and has pressured Nepalese authorities to repatriate illegal border-crossing Tibetans. Another activity seen as illegal is the influx of North Koreans into northeastern China. Some 1,850 North Koreans fled their country in 2004, but China views them as illegal economic migrants rather than refugees and sends many of them back. Some of those who succeed in reaching sanctuary in foreign diplomatic compounds or international schools have been allowed to depart for South Korea.

Ethnic Groups: Besides the majority Han Chinese, China recognizes 55 other nationality or ethnic groups, numbering about 105 million persons, mostly concentrated in the northwest, north, northeast, south, and southwest but with some in central interior areas. Based on the 2000 census, some 91.5 percent of the population was classified as Han Chinese (1.1 billion). The other major minority ethnic groups were Zhuang (16.1 million), Manchu (10.6 million), Hui (9.8 million), Miao (8.9 million), Uygur (8.3 million), Tujia (8 million), Yi (7.7 million), Mongol (5.8 million), Tibetan (5.4 million), Bouyei (2.9 million), Dong (2.9 million), Yao (2.6 million), Korean (1.9 million), Bai (1.8 million), Hani (1.4 million), Kazakh (1.2 million), Li (1.2 million), and Dai (1.1 million). Classifications are often based on self-identification, and it is sometimes and in some locations advantageous for political or economic reasons to identify with one group

over another. All nationalities in China are equal according to the law. Official sources say that the state protects their lawful rights and interests and promotes equality, unity, and mutual help among them.

Languages: The official language of China is standard Chinese or Mandarin (Putonghua, which means standard speech, based on the Beijing dialect). Other major dialects are Yue (Cantonese), Wu (Shanghaiese), Minbei (Fuzhou), Minnan (Hokkien-Taiwanese), Xiang, Gan, and Hakka (Kejia). Because of the many ethnic groups in China, numerous minority languages also are spoken.

All of the Chinese dialects share a common written form that has evolved and been standardized during two millennia and serves as a unifying bond amongst the Han Chinese. The government has aggressively developed both shorthand Chinese and Pinyin (phonetic spelling) as ways to increase literacy and transliterate Chinese names. The Pinyin system was introduced in 1958 and was approved by the State Council in 1978 as the standard system for the romanization of Chinese personal and geographic names. In 2000 the Hanyu (Han language) Pinyin phonetic alphabet was written into law as the unified standard for spelling and phonetic notation of the national language.

Religion: The traditional religions of China are Confucianism, Daoism, and Buddhism. Confucianism is not a religion, although some have tried to imbue it with rituals and religious qualities. Rather, it is a philosophy and system of ethical conduct that since the fifth century B.C. has guided China’s society. Kong Fuzi (Confucius in Latinized form) is honored in China as a great sage of antiquity whose writings promoted peace and harmony and good morals in family life and society in general. Ritualized reverence for one’s ancestors, sometimes referred to as ancestor worship, has been a tradition in China since at least the Shang Dynasty (1750–1040 B.C.).

Estimates of the number of adherents of the various beliefs are difficult to establish; as a percentage of the population, institutionalized religions, such as Christianity and Islam, represent only about 4 percent and 2 percent of the population, respectively. In the late 1990s, there were some 100 million adherents to various sects of Buddhism and some 9,500 temples, many of which are maintained as cultural landmarks and tourist attractions. The Buddhist Association of China was established in 1953 to oversee officially sanctioned Buddhist activities. In 1998 there reportedly were 600 Daoist temples and an unknown number of adherents in China. Officially, the state acknowledges that there were some 10 million Protestants and about 4 million Catholics in 2000. However, both Protestants and Catholics also have large “underground” communities, possibly numbering as many as 90 million. In 1997 there reportedly were 18 million adherents of Islam in China, but unofficial estimates suggest the total is much higher. Most adherents are members of the Uygur and Hui nationality people. The Falun Dafa (Wheel of Law, also called Falun Gong) quasi-religious movement based on traditional Chinese qigong (deep-breathing exercises) and Daoist and Buddhist practices and beliefs was established in 1992 and claimed 70 million to 100 million practitioners in China in the late 1990s. Because of its perceived antigovernment activities, Falun Gong was outlawed in China in April 1999, and reportedly tens of thousands of its practitioners were arrested and sentenced to “reeducation through labor” or incarcerated in mental hospitals. The constitution grants citizens of the People’s Republic of

China the freedom of religious belief and says that the state “protects normal religious activities” but that no one “may make use of religion to engage in activities that disrupt public order, impair the health of citizens or interfere with the educational system of the state.”

Education and Literacy: Education in China is the responsibility of the Ministry of Education. The population has had on average only 6.2 years of schooling, but in 1986 the goal was established to achieve nine years of compulsory education by 2000. The education system provides free primary education for five years, starting at age seven, followed by five years of secondary education, from ages 12 to 17. At this level, there are three years of middle school and two years of high school. The Ministry of Education reports that there is a 99 percent attendance rate for primary school and an 80 percent rate for both primary and middle schools. Since free higher education was abolished in 1985, applicants to colleges and universities compete for scholarships based on academic ability. Private schools have been allowed since the early 1980s. The United Nations Development Programme reported that in 2002 China had 111,752 kindergartens, with 571,000 teachers and 20.3 million students. At the same time, there were 456,903 primary schools with 5.8 million teachers and 121.5 million students. General secondary education had 80,067 institutions with 4.3 million teachers and 82.8 million students. There also were 2,523 secondary technical schools with 170,000 teachers and 3.9 million students. Among specialized institutions, there were 430 teacher-training schools with 38,000 teachers and

601,000 students; 7,402 agricultural and vocational schools with 310,000 teachers and 5.1 million students; and 1,540 special schools with 30,000 teachers and 9 million students. In 2002 there were 1,396 institutions of higher learning (colleges and universities) with 618,000 professors and 9 million students. There is intense competition for admission to China’s colleges and universities. Beijing and Qinghua universities and more than 100 other key universities are the most sought after by college entrants. The literacy rate in China in 2002 was 90 percent. Health: Indicators of the status of China’s health sector can be found in the nation’s fertility rate of 1.7 children per woman (a 2004 estimate) and an under-five-years-of-age mortality rate of 39 per 1,000 live births (a 2001 estimate). In 2002 China had nearly 1.7 physicians per 1,000 persons and about 2.4 beds per 1,000 persons. Health expenditures on a purchasing parity power (PPP) basis were US$224 per capita in 2001, or 5.5 percent of gross domestic product (GDP). Some 37.2 percent of public expenditures were devoted to health care in China in 2001. However, about 80 percent of the health and medical care services are concentrated in cities, and timely medical care is not available to more than 100 million people in rural areas.

In 2004 Beijing health officials stated that China had some 120 million hepatitis B virus carriers. Although not identified until later, China’s first case of a new, highly contagious disease, severe acute respiratory syndrome (SARS), occurred in Guangdong in November 2002, and within three months the Ministry of Health reported 300 cases and 5 deaths in the province. Shortly thereafter, people were being treated for SARS in Hong Kong and then quickly in China and in other parts of the world to which people had traveled by air from Hong Kong. By May some

8,000 cases of SARS were reported worldwide, with about 66 percent of the cases and 349 deaths in China alone. By early summer 2003, the SARS epidemic had ceased and was less serious in the winter and spring of 2004. A vaccine was developed and first-round testing on human volunteers was completed in 2004.

China, like other nations with migrant and socially mobile populations, has experienced increased incidences of human immuno-deficiency virus/acquired immune deficiency syndrome (HIV/AIDS). Based on 2003 estimates, China is believed to have a 0.1 percent adult prevalence rate for HIV/AIDS, one of the lowest rates in the world and especially in Asia. However, because of China’s large population, this figure converted in 2003 to some 840,000 cases (more than Russia but less than the United States, and second in Asia to India), of whom 44,000 died. About 80 percent of those infected live in rural areas. In November 2004, the head of the United Nations AIDS program (UNAIDS) cited China, along with India and Russia, as being on the “tipping point” of having small, localized AIDS epidemics that could turn into major ones capable of affecting the world’s response to the disease. In 2004 the Ministry of Health reported that its annual AIDS prevention funding had increased from US$1.8 million in 2001 to US$47.1 by 2003 and that, whereas treatment had been restricted to a few hospitals in major cities, treatment was becoming more widely available.

In the 1999–2001 period, China had one of the highest per capita caloric intakes in Asia. It was second only to South Korea and higher than countries such as Japan, Malaysia, and Indonesia. By 2000, 94 percent of the urban population and 66 percent of the rural population had access to an improved water supply. And, 69 percent of the urban population and 27 percent of the rural population had access to improved sanitation facilities.

Welfare: In pre-reform China, the needs of society were taken care of from cradle to grave by the socialist state. Child care, education, job placement, housing, subsistence, health care, and elder care were largely the responsibility of the work unit as administered through the state-owned enterprises and agricultural communes and collectives. As those systems disappeared or were reformed, the “iron rice bowl” approach to social security changed. Article 14 of the constitution stipulates that the state “builds and improves a social security system that corresponds with the level of economic development.” Social security reforms since the late 1990s have included unemployment insurance, medical insurance, workers’ compensation insurance, maternity benefits, communal pension funds, and individual pension accounts. Official statistics show that in 2003, 29 million people in China were living in absolute poverty (making the equivalent of US$76.93 or less per year) and the number was growing, mostly in rural areas as income gaps widened between the poor and other farmers.

ECONOMY

Overview: After nearly a quarter century of reform and opening to the outside world, China’s economic system is the third largest in the world. In 2004 China had the world’s seventh largest gross domestic product (GDP) at US$1.4 trillion, resulting in a per capita GDP of US$1,000. The government has a goal of quadrupling the GDP by 2020 and increasing per capita GDP two-and-a-half times. Central planning has been cut back, and widespread market economy mechanisms and a reduced government role have been adopted since 1978. The government fosters a dual economic structure that involves the transition from a socialist, centrally planned economy to a socialist market economic system, or a “market economy with socialist characteristics.” Industry is marked by increasing technological advancements and productivity. People’s communes were eliminated by 1984—after more than 25 years—and the system of township-collective-

household production was introduced in the agricultural sector. Private ownership of production assets is legal, although some nonagricultural and industrial facilities are still state owned and centrally planned. Restraints on foreign trade were relaxed with China’s accession to the World Trade Organization in 2001. Joint ventures are encouraged, especially in the coastal special economic zones and open coastal cities. A sign of the affluence the reformed economy has brought to China might be measured in the number of its millionaires (measured in U.S. dollars). In 2004 there were a reported 236,000 millionaires, an increase of 12 percent over two years earlier.

Chinese officials cite two major trends that have an effect on China’s market economy and future development: world multipolarization and regional integration. In relation to these trends, they see the roles of China and the United States in world affairs and with each other as very important. Despite successes, China’s leaders face a variety of challenges to the nation’s future economic development. They have to maintain a high growth rate, deal effectively with the rural work force, improve the financial system, continue to reform the state-owned enterprises, foster the productive private sector, establish a social security system, improve scientific and educational development, promote better international cooperation, and change the role of the government in the economic system. Despite whatever constraints the international market places on China, it became the world’s third largest trading nation in 2004, after the United States and Germany.

Gross Domestic Product (GDP)/Purchasing Power Parity (PPP): In 2004 China had a gross domestic product (GDP) of US$1.4 trillion, resulting in a per capita GDP of US$1,000. China’s PPP was estimated for 2003 at nearly US$6.5 trillion. Based on official Chinese data, the GDP growth rate for 2003 was 9.1 percent. PPP per capita in 2003 was estimated at US$5,000. Government Budget: The state budget for 2002 was 1.8 trillion renminbi (RMB) in revenue and RMB2.2 trillion in expenditures. In the revenue column, 93.2 percent was from taxes and tariffs, 54.9 percent of which were collected by the central government and 45.1 percent by local authorities. The expenditures were for culture, education, science, and health care (18 percent); capital construction (14.3 percent); administration (13.5 percent); national defense (7.7 percent); agriculture, forestry, and water conservancy (5 percent); enterprise development (4.4 percent); subsidies to compensate price increases (3 percent); pensions and social welfare (1.7 percent); and other (32.4 percent). The overall budget deficit in 2002 was RMB314.9 billion, an amount equivalent to 2.9 percent of gross domestic product (GDP).

Inflation : China’s annual rate of inflation averaged 6 percent per year during the 1996–2002 period. Consumer prices experienced annual fluctuations, and the rate of inflation was estimated at 0.9 percent in 2003.

Special and Open Economic Zones: As part of its economic reforms and policy of opening to the world, between 1980 and 1984 China established special economic zones (SEZs) in Shenzhen, Zhuhai, and Shantou in Guangdong Province and Xiamen in Fujian Province, and designated the entire province of Hainan as a special economic zone. In 1984 China opened 14 other coastal cities to overseas investment (listed north to south): Dalian, Qinhuangdao, Tianjin, Yantai, Qingdao, Lianyungang, Nantong, Shanghai, Ningbo, Wenzhou, Fuzhou, Guangzhou,

Zhanjiang, and Beihai. Then, beginning in 1985, Beijing decided to expand the coastal area by establishing the following open economic zones (listed north to south): Liaodong Peninsula, Hebei Province (which surrounds Beijing and Tianjin), Shandong Peninsula, Yangzi River Delta, Xiamen-Zhangzhou-Quanzhou Triangle in southern Fujian Province, Zhujiang (Pearl River) Delta, and Guangxi Zhuang Autonomous Region. In 1990 China decided to open the Pudong New Zone in Shanghai to overseas investment, as well as more cities in the Yangzi River Valley. Since 1992, the State Council has opened a number of border cities and all the capital cities of inland provinces and autonomous regions. In addition, 15 free-trade zones, 32 state-level economic and technological development zones, and 53 new- and high-tech industrial development zones have been established in large and medium-sized cities. As a result, a multilevel and diversified pattern of opening, integrating coastal areas with riverine, border and inland areas, has been formed in China.

Agriculture, Forestry, and Fishing: China traditionally has struggled to feed its large population. Even in the twentieth century, famines periodically ravaged China’s population. Great emphasis has always been put on agricultural production, but weather, wars, and politics often mitigated good intentions. With the onset of reforms in the late 1970s, the relative share of agriculture in the gross domestic product (GDP) began to increase annually. Driven by sharp rises in prices paid for crops and a trend toward privatization in agriculture, agricultural output increased from 30 percent of GDP in 1980 to 33 percent of GDP by 1983. Since then, however, it has decreased in share as the services sector increased. By 2003 agriculture produced only 14.8 percent of China’s GDP but is still huge by any measure. Some 51.1 percent of the total national work force is engaged in agriculture, forestry, and fishing.

According to United Nations statistics, China’s cereal production is the largest in the world. In 2002 China produced 402 million tons, or 19.8 percent of total world production. Its plant oil crops—at 15 million tons in 2002—are a close second to those of the United States and amounted to 13.6 percent of total world production. More specifically, China’s principal crops in 2002 were rice (174.7 million tons), corn (121.3 million tons), sweet potatoes (108 million tons), wheat (90.2 million tons), sugarcane (90.1 million tons), and potatoes (75.2 million tons). Other grains, such as barley, buckwheat, millet, oats, rye, sorghum, and tritcale (a wheat-rye hybrid), added substantially to overall grain production. Crops of peanuts, rapeseed, soybeans, and sugar beets also were significant, as was vegetable production in 2002. Among the highest levels of production were cabbages, tomatoes, cucumbers, and dry onions. Fruit production also has become a significant aspect of the agricultural market. In 2002 China produced large crops of watermelons, cantaloupes, and other melons. Other significant orchard products were apples, citrus fruits, bananas, and mangoes. China, a nation of numerous cigarette smokers, produced 2.4 million tons of tobacco leaves.

Fertilizer use was a major contributor to these abundant harvests. In 2001–02, China consumed 22.4 million tons of nitrogenous fertilizers, or 27.3 percent of total world consumption and more than double the consumption of other major users such as India and the United States in the same period. Among the lesser used fertilizers, China also was a leader. It consumed 8.8 million tons of phosphate fertilizers (26.8 percent of the world total) and 4 million tons of potash fertilizers (17.8 percent of the world total).

With China’s accession to the World Trade Organization (WTO) in 2001, food export opportunities have opened up and brought about still more efficient farming. As a result, traditional areas such as grain production have decreased in favor of cash crops for domestic and export trade in vegetables and fruit.

China’s livestock herds are the largest in the world, far outstripping all of Europe combined and about comparable in size to all African nations combined. For example, in 2002 China had 49.3 percent of the world’s pigs, 21.7 percent of the world’s goats, and 7.7 percent of the world’s cattle. Converted into food production, China’s major livestock products in 2002 were pig meat (43.2 million tons), poultry eggs (24.6 million tons), cow’s milk (12.9 million tons), poultry meat (12.5 million tons), and beef and veal (5.4 million tons). Other meats of significant amounts were mutton, lamb, and goat. Major by-products were cattle hides (1.3 million tons), sheepskins (321,000 tons), and goatskins (319,000 tons). Honey (265,000 tons) and raw silk (100,000 tons) also were major products destined for the commercial market.

Forestry products, measured in annual roundwood production, also abound. In 2002 China produced 284.9 million cubic meters of roundwood, the world’s third largest after the United States and India, or about 8.4 percent of total world production. From the roundwood, some 9.4 million cubic meters of sawnwood were produced that year.

China also leads the world in fish production. In 2001 it caught 16.5 million tons of fish, far out-catching the second-ranked nation, the United States, with its 4.9 million tons. Aquaculture also was substantial in world terms. In the same year, China harvested 26 million tons of fish, an amount more than 10 times the second-ranked nation, India, with its 2.2 million tons. The total fish production in 2002 was 44.3 million tons. Of this total, 62.7 percent was from aquaculture, an increasing sector, and 37.3 percent was from fish caught in rivers, lakes, and the sea.

Mining and Minerals: Mineral resources include large reserves of coal and iron ore, and there are adequate to abundant supplies of nearly all other industrial minerals. Besides being a major coal producer, China is the world’s fifth largest producer of gold and in the twenty-first century has become an important producer and exporter of rare metals needed in high-technology industries. The rare earth reserves at the Bayan Obi mine in Inner Mongolia are thought to be the largest in any single location in the world. Outdated mining and ore-processing technologies are being replaced with modern techniques, but China’s rapid industrialization requires imports of minerals from abroad. In particular, iron ore imports from Australia and the United States have soared in the early 2000s as steel production rapidly outstripped domestic iron ore production. The major areas of production in 2001 were coal (1.1 billion tons), iron ore (220 million tons), crude petroleum (163.9 million tons), natural gas (30.3 million cubic meters), antimony ore (150 million tons), tin concentrates (95 million tons), nickel ore (51.5 million tons), tungsten concentrates (38.5 million tons), unrefined salt (34.1 million tons), vanadium (30 million tons), and molybdenum ore (28.2 million tons). In order of magnitude, bauxite, gypsum, barite, magnesite, talc and related minerals, manganese ore, fluorspar, and zinc also were important. In addition, China produced 1.9 million tons of silver, 185,000 tons of gold, 950,000 carats of industrial diamonds, and 235,000 carats of gem diamonds in 2001. The mining sector accounted

for less than 0.8 percent of total employment in 2002 but produced about 5.3 percent of total industrial production.

Industry and Manufacturing: Industry and construction produced 52.9 percent of China’s gross domestic product (GDP) in 2003. Industry (including mining, manufacturing, construction, and power) contributed 51.1 percent of GDP in 2002, and occupied 20.5 percent of the workforce. The manufacturing sector produced 44.5 percent of GDP in 2002 and accounted for 11.3 percent of total employment. China is the world’s leading manufacturer of chemical fertilizers, cement, and steel. Prior to 1978, most output was produced by state-owned enterprises. As a result of the economic reforms that followed, there was a significant increase in production by enterprises sponsored by local governments, especially townships and villages, and, increasingly, by private entrepreneurs and foreign investors. By 2002 the share in gross industrial output by state-owned and state-holding industries had decreased to 41 percent, and the state-owned companies themselves contributed only 16 percent of China’s industrial output.

An example of an emerging heavy industry is automobile production, which has soared during the reform period. In 1975 only 139,800 automobiles were produced annually, but by 1985 production had reached 443,377, then jumped to nearly 1.1 million by 1992 and increased fairly evenly each year up until 2001, when production reached 2.3 million. In 2002 production figures rose to nearly 3.3 million and then jumped again the next year to 4.4 million. Domestic sales have kept pace with production. After respectable annual increases in the mid- and late 1990s, sales soared in the early 2000s, reaching 3 million sold in 2003 and expected by some forecasters to reach 5 million sold per year by 2009. So successful has China’s automotive industry been that it began exporting car parts in 1999. China began to make plans to move in major ways into the automobile and components export business starting in 2005. A new Honda factory in Guangzhou was being built in 2004 for the sole purpose of the export market and was expected to ship 30,000 passenger vehicles to Europe in 2005. By 2004, 12 major foreign automotive manufacturers had joint-venture plants in China. They produced a wide range of automobiles, minivans, sport utility vehicles, buses, and trucks. In 2003 China exported US$4.7 billion worth of vehicles and components, an increase of 34.4 percent over 2002. By 2004 China had become the world’s fourth largest automotive vehicle producer.

Concomitant with automotive production and other steel-consuming industries has been rapidly increasing steel production in China. Iron-ore production kept up with steel production in the early 1990s but was soon left behind by imported iron ore and other metals in the early 2000s. Steel production in 2000 was an estimated 140 million tons but expected to reach more than 350 million tons a year by the end of the decade.

Energy: As with other economic categories, China is a major producer and consumer of energy resources. In 2001, the most recent year available for United Nations statistics, China produced 807.2 million tons of oil equivalent and consumed 770.4 million tons. Per capita consumption was 599 kilograms, only a quarter of North Korea’s estimated consumption, a third of that in Hong Kong, and well below the average for Asia. China’s energy consumption has been dramatically on the rise since the inception of its economic reform program in the late 1970s. Electric power generation—mostly by coal-burning plants—has been in particular demand as China’s electricity use in the 1990s increased by between 3 percent and 7 percent per year. In

2003 electricity use increased by 15 percent over the previous year, and supplies could not keep up with demand, thus slowing economic development. Government statistics indicate that the overall demand for electric power for 2004 was projected to be around 2 trillion kilowatt hours but by June of that year, a 60 billion kilowatt-hour shortfall had been projected. Energy production failed to keep up with industrial demands, resulting in power cutoffs throughout most of the country.

China is largely self-sufficient in all energy forms. Its coal production is the highest in the world. Some 66.1 percent of China’s energy was produced from coal in 2002. The coal reserves are among the world’s largest, and mining technology has been improving since the 1990s. Coal has been exported since the early 1970s.

Petroleum produced 23.4 percent and natural gas 2.7 percent of China’s energy requirements in 2002. The petroleum reserves are large, but of varying quality and in disparate locations. There are oil deposit blocks in the northwest and offshore tracts believed to be among the world’s largest. There are substantial natural gas reserves in the north, northwest, and offshore. China has been an exporter of petroleum since the early 1970s. Yet, China is a net importer of crude petroleum because the high grades of petroleum it needs are not available domestically. Imports of mineral fuels totaled 7.2 percent of the cost of total imports in 2002. In 2004 Russia agreed to expand its oil exports to China. With deliveries sent by railroad, the two sides expected oil deliveries to China to reach 10 million tons in 2005 and 15 million tons in 2006. However, China’s total petroleum imports were expected to exceed 100 million tons in 2005.

China’s hydroelectric potential is the greatest in the world and the sixth largest in capacity. However, in 2002 hydroelectric power produced only 7.8 percent of China’s energy needs. The Three Gorges hydropower project on the Yangzi River started delivering power to eastern and central provinces in July 2003 and is expected to produce 84.7 billion kilowatt hours per year when the project is completed in 2009.

Construction: As might be expected in a rapidly developing nation, China’s construction sector has grown substantially since the early 1980s. In the twenty-first century, investment in capital construction has experienced major annual increases. In 2001 investments increased 8.5 percent over the previous year. In 2002 there was a 16.4 percent increase, followed by a 30 percent increase in 2003.

Services: In 2003 the services sector produced 32.3 percent of China’s gross domestic product (GDP). Prior to the onset of economic reforms in 1978, China’s services sector was represented by state-operated shops, rationing, and regulated prices. With reform came private markets and individual entrepreneurs and a comparatively free-wheeling commercial sector. Urban areas now are filled with shopping malls and dotted with Western-style retail shops and fast-food chains. An array of Western-style fast-food chains, trendy restaurants, night clubs, and consumer shops of all kinds are within close proximity to Mao Zedong’s mausoleum in Beijing. Other east coast cities have followed suit, and some cities in the interior are not far behind. If anything, as the Economist Intelligence Unit points out, the retail sector “suffers from oversupply.” Joint-venture hotels abound in China’s major cities.

Banking and Finance: Banking reform was initiated in China in 1994, and the Commercial Banking Law took effect in July 1995. The aims of these actions were to strengthen the role of the central bank—the People’s Bank of China—and to allow private banks to be established. The People’s Bank of China was established in 1948. It issues China’s currency and implements the nation’s monetary policies. China’s oldest bank, founded in 1908, is the Bank of Communications Limited, a commercial enterprise located in Shanghai. China’s second oldest bank was established in 1912 as the Bank of China. Since 2004 it has become a shareholding company known as the Bank of China Limited. This bank handles foreign exchange and international financial settlements. The Agricultural Bank of China was founded in 1951 and is mainly involved in rural financing and providing services to agricultural, industrial, commercial, and transportation enterprises in rural areas. Other major banks include the China Construction Bank; established in 1954 as the People’s Construction Bank of China, it has been a state-owned commercial bank since 1994, with 15,401 business outlets inside and outside China, including six overseas branches and two overseas representative offices. In late 2004, moves were underway to restructure the China Construction Bank into a shareholding bank called the China Construction Bank Corporation, with the state holding the controlling shares. The China International Trust and Investment Corporation was founded in 1979 to assist economic and technological cooperation, finance, banking, investment, and trade. The Industrial and Commercial Bank of China was founded in 1984 to handle industrial and commercial credits and international business. The Agricultural Development Bank of China, Export and Import Bank of China, and State Development Bank all were founded in 1994. China’s first private commercial national bank, the China Minsheng Banking Corporation, was opened in 1996. Commercial banks are supervised by the China Banking Regulatory Commission, which was established in 2003.

When first allowed in the mid-1980s, foreign banks were restricted to certain cities and could deal only with transactions by foreign companies in China. After those restrictions were relaxed following China’s accession to the World Trade Organization in 2001, some foreign banks have been allowed to provide services to local residents and businesses. In 2004 there were some 70 foreign banks with more than 150 branches in China.

There are stock exchanges in Beijing, Shanghai (the third largest in the world), and Shenzhen, and futures exchanges in Shanghai, Dalian, and Zhengzhou. They are regulated by the China Securities Regulatory Commission.

Tourism: China has become a major tourist destination, especially since its opening to the world in the late 1970s. By 2002 China had some 8,880 tourist hotels and a burgeoning hospitality industry, much of it joint ventures with foreign partners. Sources vary as to how many tourists and visitors arrive in China each year. The figures for 2002, for example, varied between 36.8 million and 97.9 million tourists and visitors to China. However, 80.8 million (82.5 percent of the total) visits were made by individuals arriving via the Hong Kong and Macau special administrative regions, including those who made multiple and often same-day trips to China. Others came from Taiwan (4 percent), Japan (3 percent), South Korea (2.2 percent), Russia, (1.3 percent), and the United States (1.1 percent). There is agreement on the monetary value of this sector. In 2002 visitors to China spent some US$20.3 billion. At the same time, China was

increasingly a source of tourists, with more than US$15 billion spent on tourism in other countries in 2002.

Labor: China’s total employed labor force at the end of 2002 was 634 million persons. of these, 51.2 percent were in agriculture, forestry, and fishing; 20.5 percent were in mining, manufacturing, energy, and construction industries; and 28.2 percent were in the services sector and other categories. In 2004 some 25 million persons were employed by 743,000 private enterprises. The All-China Federation of Trade Unions (ACFTU) is the state-sanctioned labor organization with which other official labor organizations affiliate. The ACFTU was established in 1925 to represent the interests of national and local trade unions and trade union councils. The ACFTU reported a membership of 130 million at the end of 2002, out of an estimated 248 million urban workers. An independent trade union group, the Workers’ Autonomous Federation, was founded in 1989, with the goal of establishing a separate trade union movement, but many of its leaders were arrested during the June 1989 Tiananmen incident.

Official Chinese statistics reveal that 7.3 percent of the total work force, some 25.6 million persons, were unemployed in 2002. Unofficially, it was believed that there might have been some 150 million unemployed in rural areas in 2001. As part of its newly developing social security legislation, China has an unemployment insurance system. At the end of 2003, more than 103.7 million people were participating in the plan, and 7.4 million laid-off employees had received benefits.

Foreign Economic Relations: The government traditionally has decided the composition of China’s foreign trade. However, since the initiation of reforms in 1978, increasing numbers of private partnerships have developed, and trade is primarily dictated by the marketplace. After years of disagreement over trade practices with its largest export partner, the United States, China agreed to a range of economic reforms designed to open Chinese markets to private and foreign investment, and the U.S. Congress granted China permanent most-favored-nation status in 2000. In 2001 China acceded to the World Trade Organization. As a result of its efforts in the global marketplace, by 2004 China had become the world’s third largest trading power behind the United States and Germany.

Imports: China’s imports rose by 36 percent in 2004, totaling US$561.4 billion. In 2003, for which fuller statistics are available, China’s imports totaled US$397.4 billion. Of these imports, the major components were machinery and equipment, mineral fuels, plastics, and iron and steel. The major trading partners were Japan (18.1 percent), Taiwan (12.8 percent), South Korea (9.7 percent), and the United States (9.2 percent). The 2003 amount reflected the rising trend in imports during the pervious seven years. In 1996 China’s imports totaled US$138.8 billion and reached US$225 billion by 2000.

Exports: China’s exports rose by 35.4 percent in 2004, totaling US$593.4 billion. In 2003, for which fuller statistics are available, China’s exports reached US$436.1 billion, with machinery and equipment, textiles and clothing, footwear, toys, and mineral fuels as the major commodities. The major trading partners were the United States (21.5 percent), Hong Kong (trading as a separate economy, mostly for reexport purposes, 18 percent), Japan (14.9 percent), and South Korea (4.8 percent). One of the burgeoning exports, toys (both hi-tech and simple, of which

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