Country Profile> People's Republic of China>General Information>Introduction

1.1 Introduction

People's Republic of China is located in East Asia on the western shore of the Pacific Ocean and contains more than one-fifth of the world's population. China has 23 provinces, 5 autonomous regions, 4 municipalities and two special administrative regions, which include Hong Kong and Macau. Taiwan is considered to be China's 23 rd province.

After World War II, the Communist Party under Mao Zedong controlled the country. Since 1978, China has made a gradual transition from a planned economy to a more open market, which has led to a significant period of growth.
1.2 Geography
China has a land area of approximately 9.6 million sq km., and is the third-largest country in the world. China has land borders 22,800 km long with 15 contiguous countries; Korea to the east; the People's Republic of Mongolia to the north; Russia to the northeast; Kazakhstan, Kirghizstan and Tajikistan to the northwest; Afghanistan, Pakistan, India, Nepal and Bhutan to the west and southwest; and Vietnam, Laos and Myanmar to the south.

The Chinese mainland is flanked to the east and south by the Bohai, Yellow, East China and South China seas, with a total maritime area of 4.73 million sq km. The Bohai Sea is China's continental sea, while the Yellow, East China and South China seas are marginal seas of the Pacific Ocean. There are approximately 5,400 islands around China's territorial waters. The largest of these, with an area of about 36,000 sq km, is Taiwan.
Figure 2

Source: United States Central Intelligence Agency

1.3 Socio-economic Profile

Demographics China is a united multi-ethnic nation of 56 ethnic groups. According to the 2000 census, the Han people made up 91.59% of the country's total population, while 55 ethnic groups, comprised the remaining 8.41%. As the majority of the population is of the Han ethnic group, China's ethnic groups are customarily referred to as the national minorities.

PopulationChina is the most populous country in the world, with over 1.3 billion people based on the 2000 census, comprising approximately 22% of the world's total. Compared with a total population of 1,133.68 million as reported in the 1990 census, China has seen its population grow 11.4% over the past 10 years. The average annual growth rate was 1.07%. Males comprised 51.5% of the population, while women comprised 48.5%. As noted in Table 1, over 60% of the total population of mainland China lived in rural areas.

Table 1

Population by Region 2000 Census (in thousands of people)
Regions	Total	%	Urban	%	Rural	%
Beijing	13,820	1.1	10,720	77.6	3,100	22.4
Hebei	67,440	5.3	17,590	26.1	49,850	73.9
Shanghai	16,740	1.3	14,780	88.3	1,960	11.7
Anhui	59,860	4.7	16,650	27.8	43,210	72.2
Jiangxi	41,400	3.3	11,460	27.7	29,940	72.3
Henan	92,560	7.3	21,470	23.2	71,090	76.8
Hunan	64,400	5.1	19,160	29.8	45,240	70.2
Guangxi	44,890	3.6	12,640	28.2	32,250	71.8
Sichuan	83,290	6.6	22,230	26.7	61,060	73.3
Guizhou	35,250	2.8	8,410	23.9	26,840	76.1
Yunnan	42,880	3.4	10,020	23.4	32,860	76.6
Tibet	2,620	0.2	500	19.1	2,120	80.9
Gansu	25,620	2.0	6,150	24.0	19,470	76.0
Others	672,560	53.2	284,160	42.3	388,400	57.7
Total	1,263,330	100.0	455,940	36.1	807,390	63.9

Source: National Bureau of Statistics of China
Does not include Hong Kong SAR, Macao SAR, the province of Taiwan or servicemen

Table 2

Population by Age 2000 Census (in millions of people)
Age	Million	%
0 to 14	289.79	22.9
15 to 64	887.93	70.1
65+	88.11	7.0
Total	1,265.83	100.0

Source: National Bureau of Statistics of China
Note: Includes serviceman, Does not include Hong Kong SAR, Macao SAR and Taiwan Province

Labor ForceAccording to the National Bureau of Statistics of China (NBS), the size of employment continued to expand during 2002 with a total labor force of 737.4 million people. Of the total, 247.8 million (33.6%) were employed in urban areas while the remaining 66.4% were employed in rural areas. The NBS reported that the unemployment rate, through the unemployment registration, was 4% at the end of 2002, which was up by 0.4 percentage points over 2001. According to the Asian Develop Bank (ADB), the unemployment rate at the end of 2002 was 7.7% for urban areas only. The total labor force employed by sector according to the ADB was:

Table 3

Employment by Sector 2002 (in million of people)
Sector	Million	%
Agriculture	324.87	44.1
Manufacturing	83.08	11.3
Others	329.45	44.7
Total	737.40	100.0
Labor Force (1)	753.60

Source: Asia Development Bank, NBS
(1) ADB, Economically active population aged 16 years and over

Poverty Levels:According to the NBS, the living standard of urban and rural populations continued to improve. The annual per capital disposable income of urban households was 7,703 Yuan in 2002, an increase of 13.4%. The per capita net income of rural households was 2.476 Yuan, an increase of 4.8%. The population in poverty living in rural areas was 28.2 million at the end of 2002, 1.07 million less than in 2001. The following are measurements that the Government uses to determine increases in poverty alleviation.

Table 4

Poverty Alleviation Measures (1998 - 2002)
	1998	1999	2000	2001	2002
Per capita disposable income of urban population (in Yuan)	5,425	5,854	6,280	6,860	7,703
Per capita disposable income of rural population (in Yuan)	2,162	2,210	2,253	2,366	2,476
Engel coefficient of urban households	44.5%	41.9%	39.2%	37.9%	37.7%
Engel coefficient of rural households	53.4%	52.6%	49.1%	47.7%	46.2%

Note: Engel coefficient - proportion of expenditures on food to total consumption expenditures
Source: National Bureau of Statistics of China

Economic IndicatorsThe Government signed an accord to become part of the World Trade Organization in 2001. As such the country has had record inflows of foreign direct investment and large fixed scale investment, which continued in 2002 and helped the country record one of its fastest rates of economic expansion in 5 years. According to the ADB, the strong economic performance is expected to continue. However, China still has many challenges that include slow growth in rural income, the need to create jobs and an enabling environment for the private sector and a growing disparity between the coastal and interior provinces. The ADB estimates that economic growth will be 7.3% for 2003 due to a less expansionary fiscal policy and lower growth in the rural sector.

Gross Domestic Product (GDP) According to the NBS, the absolute value of China's GDP had grown 8% in 2002 from 7.3% in 2001. The growth resulted from strong exports, increasing foreign direct investment and a strong domestic demand. Industry, including construction was a primary contributor, growing 9.9% in 2002 from 8.8% in 2001. Electronic equipment, transportation equipment and chemical products increased as well.

Table 5

GDP by Industry 2002 (in billions)
Industry	In RMB	In US$	%
Agriculture	1,488.3	179.8	14.5
Manufacturing	4,593.5	555.0	44.9
Construction	704.7	85.1	6.9
Trade	823.7	99.5	8.0
Transport/Communication	551.8	66.7	5.4
Others	2,077.8	251.0	20.3
Total	10,239.8	1,237.1	100.0

Source: Asian Development Bank and NBS
The average foreign exchange rate of RMB to the US$ was 8.2773 for 2002

Budget The Governments total expenditures in 2002 were US$259 billion comprising on capital expenditures of 19%, culture, education, public health, science and broadcasting of 18.5% and administration expenditures of 13.5%.

Table 6

Structure of Government Expenditures 2002 (in billions)
Current expenditure	RMB	US$	%
Administration	289.6	35.0	13.5
Defense	170.8	20.6	8.0
Culture, education, public health science & broadcasting	397.2	48.0	18.5
Economic services	142.4	17.2	6.6
Social Welfare relief	36.8	4.4	1.7
Subsidies	90.7	11.0	4.2
Other	610.5	73.8	28.5
Total Current expenditure	1,738.0	210.0	81.0
Capital expenditure
Capital Construction	311.2	37.6	14.5
Development of the productive capacity of existing enterprises	95.7	11.6	4.5
Total Capital expenditure	406.9	49.2	19.0
Total Expenditure	2,144.9	259.1	100.0

Source: The World Bank
Expenditures net of lending, Average foreign exchange rate of RMB to US$ was 8.2773 for 2002

Imports The value of imports during 2002 was US$295.2 billion, representing an increase of 21.2% over the prior year.

Table 7

Imports by Major Category 2002 (in billions US$)
Category	Value	%
General Trade	129.1	39.6
Mechanical and Electrical	72.8	22.4
High and New-Tech	82.8	25.4
Other	10.5	3.2
Total	295.2	90.7

Source: National Bureau of Statistics of China

Exports The value of exports during 2002 was US$325.6 billion, representing an increase of 22.3% over the previous year. China's agricultural products achieved a trade surplus in 2002 with double-digit export growth.

Table 8

Exports to Major Trade Partners 2002 (in billions US$)
Country	Value	% of Total	Increase Over 2001
United States	70	21.5	28.9%
Hong Kong SAR	58.5	18.0	25.6%
Japan	48.4	14.9	7.8%
EU Countries	48.2	14.8	17.9%
ASEAN Countries	23.6	7.2	28.3%
Republic of Korea	15.5	4.8	23.8%
Taiwan Province	6.6	2.0	31.7%
Russia	3.5	1.1	29.9%
Others	51.3	15.8	n/a
Total	325.6	100.0	21.2%

Source: National Bureau of Statistics of China

Table 9

Exports by Major Category 2002 (in billions US$)
Category	Value	%
General Trade	136.2	41.8%
Mechanical and Electrical	89.2	27.4%
High and New-Tech	67.9	20.9%
Other	32.3	9.9%
Total	325.6	100.0%

Source: National Bureau of Statistics of China

1.4 Government
The Government is run by the National People's Congress (NPC), which comprises 2,985 members elected by municipal, regional and provincial People's Congresses. The President and the Vice President, who Chief's of State, are elected by the National People's Congress. President Hu Jintao and Vice President Zeng Zinghong were appointed in March 2003. The Premier and Vice Premiers are nominated by the President and confirmed by the National People's Congress. The Premier Wen Jiabao, Vice Premiers, Huang Ju, Wu Yi, Zeng Peiyan and Hui Liangyu were nominated and confirmed in March 2003. State Councils are also appointed by the National People's Congress. Figure 3 provides an overview of the countries governmental structure.

Figure 3

Executive Branches of the Government

Description
1.5 National Social Welfare System
According to the NBS, the social security system was consolidated in 2002 and by the end of 2002, 147.3 million people participated in basic pension programs, including 111.3 million staff and workers and 36.0 million retirees. A total of 101.8 million people participated in the unemployment insurance program, while 4.4 million received payment from the various programs. Basic health insurance programs cover 94 million people.

There are 1.19 million beds in social welfare institutions of various types. Approximately 190,000 service facilities in communities were established in urban areas, including 8,820 community service centers. During 2002, the Government sold 17 billion Yuan worth of social welfare lottery tickets.

1.6 Education Profile

Education System:The law stipulates that education in China is compulsory and that the State should implement the nine-year compulsory education system, namely, education at primary and secondary stages. "Children of six years old, despite gender, nationality, and race, must go to school to receive free education. The educational system in China includes preschool, primary school, secondary school, high school, university and college, as well as graduate level education.

Primary and secondary education is based on the six plus three, respectively as well as the five plus four school year programs. High school usually has a term of three years, while secondary professional schools are divided into two types, junior middle school and secondary vocational and technical schools. The secondary vocational and technical schools usually provide three to four years of school. Full-time universities provide four to five year programs.

Table 10

Enrolment Ratio - Net (1995 - 1999)
	Male	Female
Primary School	92%	95%
Secondary School	66%	60%

Source: UNICEF

Public Expenditure on Education According to the ADB, Government expenditures on education are approximately 2.3% of GNP and 12.2% as a percentage of the total Governmental budget. Of total expenditures on education, 36.9% is spent on prep and primary schooling, 31.5% on secondary schooling and 16.5% on tertiary education.

Literacy Rates According to UNICEF, the adult literacy rate in 2000 was 92% for males and 77% for females.

1.7 Health Profile
According to the World Health Organization (WHO), the life expectancy at birth in China is 69.8 years old for males and 72.7 years old for females. Infant morality was 31%. It is estimated by the WHO that as of 1998 there were 161.7 physicians, 98.6 nurses and 3.9 midwives for every 100,000 Chinese.

Total expenditures on health as a percentage of GDP in 2000 was 5.3% according to the WHO, while general Government expenditures on health as a percentage of total general Government expenditures in 2000 was 11%.

In 2001, the reported number of HIV/AIDS cases in China remained relatively low according to the WHO. China has developed formal HIV surveillance systems and in 2000, 1201 sentinel sites for 5 target groups were performed in its 31 provinces. Based on data collected by the Ministry of Health and the WHO, the official working estimate of HIV prevalence in China indicates approximately 600,000 people in the age group 15-49 years old are infected with HIV. The prevalence rate is therefore estimated at 0.11% of the total population. During 2000, a total of approximately 20,000 AIDS related deaths occurred in the 15-49 year old population. The WHO estimates the projected numbers of AIDS related deaths to be 3-5 times greater by 2005, estimating approximately 60,000 to 100,000.
1.8 Information Communication Technology
According to the NBS, there were a total of 214.4 million fixed line telephone subscribers at the end of 2002, of which 135.9 million (63%), were in urban areas, while 78.5 million were in rural areas. Additionally there were 206.6 million mobile phone users at the end of 2002. As of 2002, there were approximately 45.8 million internet users in China from 3 internet service providers. The internet code for China is ".cn".

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1.1 Introduction

Executive Branches of the Government