2004 Special Edition: China today

Table of Contents

• Introduction
• GDP
• Trade
• Savings, investment
• Productivity
• Business climate
• Consumers
• Challenges

The numbers are mesmerizing: Since 1980 China’s economy has grown by more than 9 percent a year. The country now manufactures 75 percent of the world’s toys, 58 percent of the clothes, and 29 percent of the mobile phones. More than $1 billion in foreign direct investment arrives each week. By 2008 China will be the world’s third-largest exporter, and by the decade’s end its economy will be larger than that of either France or the United Kingdom.

Equally eye-catching are the host of issues China must confront to keep its growth and reforms moving. Underdeveloped and inefficient capital markets deprive the brightest Chinese companies of much-needed funding. The banking sector is weak; unsound lending continues to threaten the economy. And China’s rural population—half a billion strong—has seen little benefit from a decade of growing national prosperity.

The exhibits that follow try to put this remarkable economic transition into perspective. They begin by taking the pulse of China’s vibrant economy—examining six sources of the country’s stellar growth and its effect on consumers and businesses—and then move on to the four challenges now confronting China as well as the possible consequences of failing to address them.

About the Authors

Emmanuel Pitsilis is a principal in McKinsey’s Hong Kong office; Jonathan Woetzel is a director and Jeffrey Wong is a consultant in the Shanghai office.

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Filed under: Reports - China, Internet Development, Globalization