GDP (Million $) - 20.256.411
GDP Per Capita (Million $) – 14.340
Growth Rate (%) – 3,2
Population – 1,413,659,000
Total Area (km2) – 9,572,900
Capital – Pekin
Monetary Unit – Yuan
China is the world’s most populous country with a population of 1.44 billion people. It has quickly become the second largest economy in the word and, it is the world’s third biggest country by territory.
China is not only big but it has broad geographical and cultural diversity. To understand China, it means paying attention to China’s diversity, to its distinctive geographical regions, historic patterns, economic activities and resources. Key regions of China include: the North China Plain, the Loess Plateau, the Southeast Coast and Shanghai, the Yangzi Valley, the Sichuan Basin, Southwest Uplands, Xinjiang, Northeast (Manchuria), Qinghai and the Tibetan Plateau. Traditionally, China has recognized the distinctiveness of geographical regions, and some cities, such as Shanghai, Beijing, Tianjin, Chongqing, and Hong Kong, have special political and economic roles.
The majority of people speak some variety of Mandarin Chinese as their first language, but there are several hundred languages in China. As the means of tying the country and its regions together, a common written language, Standard Chinese is learned at school.
China’s economy has grown fast throughout the past forty decades, and China has become the world’s second biggest economy. The high growth based on resource-intensive manufacturing and exports is reaching its limits, and China is restructuring its economy from low-end manufacturing to higher-end manufacturing and services, and from investment to consumption. Nevertheless, massive investment in infrastructure continues, as proofed by the ‘Belt and Road Initiative’, the global infrastructure development strategy extending to almost 70 countries. It was adopted by the Chinese government in 2013 to build a China-centered global trading network.
China is fostering new drivers of growth in many areas, such as, AI and smart cities, manufacturing IoT, biotech and advanced materials. For foreign companies, one of the key reasons for operating in China today is the country’s rapid technological development. In particular, the size and dynamism of new Internet companies, and the fact that more than 900 million people have access to Internet in China, make the country a significant new engine for digital economy.
The number of initiatives linked to long-term ambitious climate targets (including reducing the country’s reliance on coal and raising the share of non-fossil fuel consumption), combined with innovative measures where the public, the private and the civil society resources are all utilized, suggest a vast number and variety of new business opportunities in China.
The World Bank in China
China is now an upper-middle-income country. Although China has eradicated extreme poverty, a significant number of people remain vulnerable, with incomes below a threshold more typically used to define poverty in upper-middle income countries.
China’s high growth based on investment, low-cost manufacturing and exports has largely reached its limits and has led to economic, social, and environmental imbalances. Reducing these imbalances requires shifts in the structure of the economy from manufacturing to high value services, from investment to consumption, and from high to low carbon intensity.
China’s rapid economic growth exceeded the pace of institutional development, and there are important institutional and reform gaps that China needs to address to ensure a high-quality and sustainable growth path. The role of the state needs to evolve and focus on providing a clear, fair and stable business environment, strengthening the regulatory system and the rule of law to further support the market system, as well as ensuring equitable access to public services to all citizens.
Following China’s swift reopening after the COVID-19 outbreaks in late 2022, GDP growth is expected to rebound to 5.1 percent in 2023, from 3 percent in 2022. Growth will be led by a recovery in demand, particularly for services. Investment is expected to remain robust, supported by slower but sustained growth in infrastructure and manufacturing investment, as well as the gradual stabilization of property investment. Net exports are expected to weigh on growth, due to softer external demand coupled with a modest acceleration in import growth driven by the increase in domestic demand.
To support the ongoing recovery fiscal policy is expected to remain expansionary, albeit less so than in 2022. Monetary policy is likely to be relatively accommodative, and policy easing in the property sector will be maintained in 2023.
Over the medium term, China’s economy continues to confront a structural slowdown. Potential growth has been on a declining trend, reflecting adverse demographics, tepid productivity growth, and rising constraints to a debt-fueled, investment-driven growth model. Structural reforms are needed to reinvigorate the shift to more balanced high-quality growth.
Source: worldbank.org
CONSTRUCTION INDUSTRY
China is the world’s largest construction market. This market has been heavily impacted by changes in government regulations and policies. Over 2022-2023, expect negative and low growth in the residential and non-residential building sector due to the downturn in the property market. Stimulus-induced infrastructure investment is expected to hold up the industry’s overall growth over the next couple of years.
China’s 14th Five-Year Plan emphasizes new infrastructure projects in transportation, energy, water systems, and new urbanization. According to estimates, overall investment in new infrastructure during the 14th Five-Year Plan period (2021-2025) will reach roughly 27 trillion yuan ($ 4.2 trillion). The new plan emphasized 9 key items for energy efficiency and green building development; it also calls for retrofitting of over 350 million square meters of buildings and the construction of over 50 million square meters of net zero energy consumption buildings.
Since the second half of 2021, China’s real estate market has been rocked by a series of developer defaults, as the combination of housing oversupply, a tightened regulatory environment, and subdued demand squeezed property developers’ balance sheets. Developer defaults have triggered a series of mortgage payment boycotts as homebuyers refuse to pay for unfinished homes (pre-sales of property before construction has been completed are common in China). This has resulted in a 7.8% year-on-year decline in property investment during the first 8 months of 2022 and a 23% year-on-year drop in total floor space sold during the same period. The downturn is especially severe in Tier 2 and Tier 3 cities that have seen overbuilding during the last decade, while demand for real estate in Tier 1 cities such as Beijing, Shanghai, and Shenzhen remain relatively strong. Meanwhile, logistics-related construction has become an increasingly important subsector as the growth of China’s e-commerce industry and export boom have driven demand for new warehouses and other logistics infrastructure.
China’s urbanization rate is among the highest in the world. Data from the American Institute of Architects (AIA) Shanghai reports that by 2025 China will have constructed the equivalent of 10 New York-sized cities.
While China’s urbanization rate reached 64.7% in 2022, this urban renewal policy aims to develop greener and more efficient cities as the government seeks to improve China’s urban living conditions.
Source: www.trade.gov
AUTOMOTIVE INDUSTRY
China is widely recognized as a global powerhouse in automotive and mobility due to the domestic market’s consistent performance and immense potential. By 2025, China’s Ministry of Industry and Information Technology expects that domestic vehicle production will reach 35 million; further solidifying its position as the world’s leading automobile manufacturer.
One mobility trend currently emerging in China is the development of high-speed Maglev (or magnetic levitation) trains in the transportation sector. While Maglev trains with top-speed travel of 431 kilometers per hour (KPH) had already debuted in China in 2003, recent projects aim to develop Maglev trains capable of even faster speeds, potentially reaching 520 KPH.
Another automotive trend aiming to transform the public transformation sector is fully automated, self-driving robot taxis (robotaxis). As per a report from CNN Business, the robocar company AutoX had successfully launched the first driverless robotaxis in Shenzhen; previous self-driving projects in China required the presence of a safety driver. While the new initiative is not currently open to the public, the emergence of self-driving robotaxis is still a significant milestone as it signifies that China’s automotive industry is in the midst of an innovation boom.
With China’s automotive industry committing to sustained innovation in its sectors, trends like magnetic levitation trains and smart technology vehicles will remain relevant entering 2023. Thus, stakeholders should expect an influx of business in the automotive sector wherein investment opportunities for domestic and international parties alike will be plentiful.
As a result, sectors in China’s automotive industry are undergoing rapid development and several industry trends are emerging. Entering 2023, interested parties should expect several promising investment opportunities to materialize in the Chinese automotive sector.
METAL INDUSTRY
China is one of the world's leading producers and consumers of metals. The country's metal industry includes production and processing of a wide range of metals, including iron, steel, aluminum, copper, and zinc.
In recent years, China's metal industry has faced challenges due to factors such as overcapacity, environmental regulations, and trade tensions with other countries. To address these issues, the Chinese government has implemented various policies and initiatives, including capacity cuts, environmental inspections, and efforts to promote technological innovation.
In the future, it is possible that China's metal industry will continue to face challenges and changes due to a range of factors, including evolving global economic conditions, shifts in government policies, and technological advances. However, given China's position as a major player in the global metal industry, it is likely that the industry will continue to play an important role in the country's economy in the years to come.
AEROSPACE INDUSTRY
Growing domestic and international travel, driven by increasing tourism, business activity and rising incomes, has resulted in a robust domestic Chinese commercial aviation industry.
While the COVID-19 pandemic hit the commercial aviation industry, flight statistics are gradually returning to pre-pandemic levels. Commercial aviation is expected to continue growing, with the Civil Aviation Administration of China predicting a total of 450 large commercial service airports by 2035.
China also has an ambitious space program, and is one of the world’s most active countries in terms of conducting space-bound launches. Chinese entities have launched hundreds of satellites into orbit, many of which serve China’s cutting edge BeiDou Navigation Satellite System. China trails only the US in terms of total number of satellites in operation. It has also completed the launch of three modules comprising its Tiāngōng 天宫 (“heavenly palace”) space station, and conducts lunar exploration via its Chang’e program. China has set a goal of being a world-leading space power by 2045.
China’s aerospace industry is dominated by massive state-owned enterprises (SOEs), including the China Aerospace Science and Technology Corporation (CASC), Aviation Industry Corporation of China (AVIC), and Commercial Aircraft Corporation of China, Ltd. (COMAC). Given their inevitably close relationship with China’s People’s Liberation Army, many of these companies have come under scrutiny in recent years, and some have been sanctioned by US officials, preventing investment by American citizens.
Source: thechinaproject.com
CHINA FASTENER ASSOCIATIONS
The fastener industry is one of China's most important industries and forms an important part of the Chinese industry. China's demand for Fasteners has grown at a fast pace in the past decade. In the next decade, both production and demand will continue to grow. The Chinese economy maintains a high speed growth which has been stimulated by consecutive increases of industrial output, imports and exports, consumer consumption and capital investment for over two decades.
There are several fastener industry associations in China, some of the most prominent ones include:
China Fastener Industry Association (CFIA) - This is the national association representing the fastener industry in China. It was established in 1984 and has more than 1,000 members. The association's main functions include organizing exhibitions, promoting technological exchange, and providing policy recommendations to the government.
Zhejiang Fastener Industry Association (ZFIA) - This association was established in 1995 and is based in Zhejiang Province, which is one of the major fastener production areas in China. ZFIA has more than 500 members and focuses on promoting the development of the fastener industry in Zhejiang Province.
Shanghai Fastener Industry Association (SFIA) - This association was established in 2002 and is based in Shanghai, which is also a major production and trading center for fasteners in China. SFIA has more than 300 members and aims to promote the sustainable development of the fastener industry in Shanghai.
Ningbo Fastener Industry Association (NFIA) - This association was established in 2004 and is based in Ningbo, which is a major fastener production and export base in China. NFIA has more than 200 members and focuses on promoting the technological innovation and internationalization of the fastener industry in Ningbo.
Wenzhou Fastener Industry Association (WFIA) – This association was established on September 6, 2005. It is the main member of the China Fastener Professional Association and a local branch. It now has more than 250 member units. The association is a regional social group in the same industry, which is voluntarily participated and formed by Wenzhou fasteners and related enterprises with the support of Wenzhou Municipal Government.
These associations play an important role in promoting the development and standardization of the fastener industry in China, as well as protecting the interests of their members.
The Main Functions of the Fastener Industry Associations
- Research on technology related to industry development, economic policies and regulations, and follow-up research on the operation of rules and regulations, timely report industry opinions to the government, and put forward suggestions that need to be improved.
- Organize domestic and foreign exchanges, research and research, information transmission, personnel training, industry statistics, quality demonstrations, recommended famous products, exhibitions and sales, economic and trade negotiations and other services to promote the reform, revitalization, development, and play an active role in the fastener industry effect.
- Investigate and study the reform and development of the fastener industry, and provide plans and suggestions for the government to formulate industry reform plans, development plans, industrial policies, technical policies, laws and regulations, and other major decisions.
- Guide enterprises to do a good job in financial cost, technology, technology, energy saving, material saving, safe production, promote enterprises to strengthen the basic work centered on on-site management, improve management level, and enhance competitiveness.
