321) GDP Growth in China since 1952

GDP growth in China 1952-2009
Chinability, Access March 10, 2010

Sharp increase in GDP during the reform period GDP has risen from Rmb362.4 billion in 1978, at the start of the reform period, to Rmb30 trillion in 2008 (both figures at current prices).

Structural change in the Chinese economy during the reform period
The share of primary industry in GDP has fallen from 28% in 1978, at the beginning of the reform period, to 11% in 2008.
GDP breakdown in 2008 Rmb billion % year-on-year change % of total
Gross domestic product (GDP) 30,067.0 9.0 100.0
Primary industry 3,400.0 5.5 11.3
Secondary industry 14,618.3 9.3 48.6
Tertiary industry 12,048.7 9.5 40.1

This fall occurred because agricultural output grew more slowly than output of other economic sectors.
At the same time, the share of tertiary industry grew from 24% to 40% as services sectors proliferated.
The share of the secondary sector has stayed level at around 48% over the period as a whole.

How China's GDP rose and fell from 1952 to 2009

1953 Hyperinflation conquered; civil war and land reform ended: GDP up 15.6% in real terms.
1958-59 So-called "Great Leap Forward" devastated agriculture: result was falling GDP in 1960-62. (Figures for 1958-59 highly suspect, as the statistical network was largely destroyed in the "Leap", when absurdly high increases in output were reported by frightened local officials.)
1963-66 Partial restoration of market economy in the countryside promoted faster growth of agriculture.
1967-68 Production undermined by the so-called "Great Proletarian Cultural Revolution", that was initiated by Mao in mid-1966 and effectively ended by People's Liberation Army intervention in 1968.
1969-70 High growth rates followed the restoration of order after the "cultural revolution".
1976 Widespread earthquakes, including the worst ever at Tangshan, hit industrial centres, while agricultural output was hit by drought; policy paralysis resulted from the anti-Deng campaign, followed by Mao's death and the arrest of the Gang of Four. GDP fell.
1978-1982 Smashing the communes and restoring family farming jacked up agricultural (especially grain) output.
1983-85 Double-digit real GDP growth accompanied the first wave of foreign investment into China, and non-state enterprises started to develop.
1989-91 Growth slowed after the government braked the overheating economy following an aborted effort at wholesale price reform in 1988 which resulted in panic buying and runaway inflation. Price stability was achieved by cancelling large fixed investment projects, slowing domestic demand. Foreign investment fell off after the Beijing Massacre of June 1989.
1992 Deng Xiaoping's Southern Tour at the beginning of the year massively boosted foreign direct investment inflows into coastal areas and started a wave of government investment in Shanghai. Record trade and GDP growth and inflation followed.
1993 Zhu Rongji appointed to rein in the overheating economy, this time more selectively than in 1989-91. Growth rates subsided gradually in subsequent years, producing a so-called "soft landing". During the 1990s, living standards continued to rise, as evidenced by the proliferation of consumer durables, especially among the urban population. Continuing FDI inflows helped boost foreign exchange reserves to record heights in the late 1990s.

Especially after the publication of the 1998 GDP figures, economists, both in China and abroad, have raised serious doubts about the quality of China's national accounts, which appeared in the late 1990s to overstate economic growth and are now suspected of understating growth. This may be because the statistical system tends to overestimate output at the trough of the cycle and underestimate output at the peak.

However, the country's first production census discovered at the end of 2005 that GDP has recently been grossly underestimated as a result of a failure to take into account the rapid growth of the services sector. As a Microsoft Store result, growth rates for 2003-2005 are now recorded at around 10% per year in real terms.

Despite efforts to cool the overheating economy, the officially recorded GDP growth rate was 11.4% in 2007.

In 2008 the global economic crisis began to reduce China's growth rate. In the face of forecasts that this might drop below the rate at which school leavers can be absorbed by the growing economy (7%-8%) the government decided to pump Rmb 4 trillion into the economy in the form of an economic stimulus package consisting largely of investment in fixed infrastucture and human capital.

The preliminary estimate for real GDP growth was 9%. This was revised upwards to 9.6% on 25 December 2009, when current-price GDP in 2008 was re-calculated to be CNY31,404.5 billion.

In 2009 China's GDP growth rate, though lower than the double-digit average of recent years, has held up well, rising from 6.1% year-on-year in the first quarter to 7.7% in the first three quarters of the year. This means that year-on-year GDP growth was around 9% in the second quarter. A similar rate of growth (9%) is expected in the final quarter, ensuring a rate of over 8% for 2009 as a whole. Following the upward revision of 2008 GDP growth at the end of 2009, there is now a strong expectation that the first three quarters GDP statistics will also be revised upwards, possibly by more than the 2008 figures, so that growth may turn out to have been even higher.

This is an astonishing performance considering that China's major export markets have dried up. Why has it happened? Mainly because of the stimulus package and the accompanying rise in short-term credit (China, unlike the rest of the world, has not experienced a credit crunch).

However, there are now serious fears that this robust growth may not be sustainable. As short-term credits fall due, they will have to be refinanced, and much of this refinancing may have to be done by taking out longer-term loans, raising the banks' non-performing loan ratios and threatening the long-term stability of the financial system. Infrastructure projects brought forward in the plan period will be completed early, leaving a gap while new ones are planned. And the US consumer is unlikely to come to the rescue of the Chinese economy when it slows further.

Source: National Bureau of Statistics, China Statistical Yearbooks; National Bureau of Statistics plan report; National Bureau of Statistics communiqués.
Last page update: 27 December 2009.

GDP Index in real terms
GDP Rmb billion at current prices - GDP per head Rmb - Real annual growth rate (%)

1952 - 100.0 - 67.9 - 119
1953 - 115.6 - 82.4 - 142 - 15.6
1954 - 120.5 - 85.9 - 144 - 4.2
1955 - 128.6 - 91.0 - 150 - 6.8
1956 - 147.9 - 102.8 - 165 - 15.0
1957 - 155.5 - 106.8 - 168 - 5.1
1958 - 188.6 - 130.7 - 200 - 21.3
1959 - 205.2 - 143.9 - 216 - 8.8
1960 - 204.6 - 145.7 - 218 - -0.3
1961 - 148.7 - 122.0 - 185 - -27.3
1962 - 140.4 - 114.9 - 173 - -5.6
1963 - 154.7 - 123.3 - 181 - 10.2
1964 - 183.0 - 145.4 - 208 - 18.3
1965 - 214.2 - 171.6 - 240 - 17.0
1966 - 237.1 - 186.8 - 254 - 10.7
1967 - 223.6 - 177.4 - 235 - -5.7
1968 - 214.4 - 172.3 - 222 - -4.1
1969 - 250.6 - 193.8 - 243 - 16.9
1970 - 299.3 - 225.3 - 275 - 19.4
1971 - 320.2 - 242.6 - 288 - 7.0
1972 - 332.4 - 251.8 - 292 - 3.8
1973 - 358.6 - 272.1 - 309 - 7.9
1974 - 366.9 - 279.0 - 310 - 2.3
1975 - 398.8 - 299.7 - 327 - 8.7
1976 - 392.4 - 294.4 - 316 - -1.6
1977 - 422.2 - 320.2 - 339 - 7.6
1978 - 471.6 - 362.4 - 379 - 11.7
1979 - 507.5 - 403.8 - 417 - 7.6
1980 - 547.1 - 451.8 - 460 - 7.8
1981 - 575.5 - 486.2 - 489 - 5.2
1982 - 629.0 - 529.5 - 525 - 9.1
1983 - 698.9 - 593.5 - 580 - 10.9
1984 - 805.8 - 717.1 - 692 - 15.2
1985 - 912.1 - 896.4 - 853 - 13.5
1986 - 989.7 - 1,020.2 - 956 - 8.8
1987 - 1,103.5 - 1,196.3 - 1,104 - 11.6
1988 - 1,228.2 - 1,492.8 - 1,355 - 11.3
1989 - 1,279.8 - 1,690.9 - 1,512 - 4.1
1990 - 1,333.5 - 1,854.8 - 1,634 - 3.8
1991 - 1,454.9 - 2,161.8 - 1,879 - 9.2
1992 - 1,660.0 - 2,663.8 - 2,287 - 14.2
1993 - 1,877.5 - 3,463.4 - 2,939 - 13.5
1994 - 2,114.0 - 4,675.9 - 3,923 - 12.6
1995 - 2,304.3 - 5,847.8 - 4,854 - 10.5
1996 - 2,530.1 - 6,788.5 - 5,576 - 9.6
1997 - 2,745.2 - 7,446.3 - 6,054 - 8.8
1998 - 2,959.3 - 7,834.5 - 6,038 - 7.8
1999 - 3,169.4 - 8,206.8 - 7,159 - 7.1
2000 - 3,422.9 - 8,946.8 - 7,858 - 8.0
2001 - (- - -) - 10,965.5 - 8,622 - 8.3
2002 - (- - -) - 12,033.3 - 9,398 - 9.1
2003 - (- - -) - 13,582.3 - 10,542 - 10.0
2004 - (- - -) - 15,987.8 - 12,336 - 10.1
2005 - (- - -) - 18,386.8 - 14,040 - 9.9
2006 - (- - -) - 21,087.1 - 16,084 - 11.1
2007 - (- - -) - 24,661.9 - (- - -) - 11.4
2008 - (- - -) - 31,404.5 - (- - -) -9.6