Sample

1- C  H  I  N  A

This is defined as mainland China, excluding Hong Kong and Macau.
1911
The two-millennia-old dynastic system of imperial government is brought down. Republic of China created, 1911-present.
1949
People's Republic of China created, 1949-present.
1978
The Chinese Communist Party embarks on a market-based reform process. China sees rapid export-led growth.
Since 1978
Dismantling of the planned economy and increasing involvement with the commodity, capital, labor service and technology markets.
China has continuously expanded the capital market by improving the credit and loan mechanism, and developing stock and state debt markets.
Before the reform and the opening of the economy, most commodities on the Chinese market were priced by the state. But since the start of the reform and opening, along with the expansion of the commodity market, and the changing relationship between commodity supply and demand, the state has carried out price reform step by step and according to plan.
Leaders
MAO Zedong
DENG Xiaoping
JIANG Zemin
HU Jintao (State Council approved 11th Five Year Plan 2006-10).
Rule
China is not a country with a tradition of putting respect for the law above all else. The Guanxi, the informal network of relationships, is a much stronger tradition.
The Communist Party seems in no rush to change this. Laws get in the Communist Party's way. The Party does not operate a rule-based system, rather it maintains a pre-law type of system, based on relationships. In game theory, relationship-based systems function under a process known as reputation.
The lack of transparency, corporate governance, a free press and property rights has divorced the Chinese market from any economic reality. Only 30% of the more than 1,300 listed firms had investment value. In China's relationship-based system, truthiness has been mistaken for truth.
Economy
Starting January 1, 2007, the listed companies on the Shanghai and Shenzhen stock markets adopted new accounting rules that, according to reports, are modeled similarly to international financial reporting standards.
Major statistics, 2008
Mainland China, with a total area of 9,596,960 sq km, is the fourth largest country by territorial area in the world. Only Russia, Canada and U.S. are larger.
With 1,321,851,888 people, China is the most populous country in the world.

11-The ONE
Each part of China covered in this book is structured in three parts: The One is the Supreme Power in that country; Second are the Groups, economically, the set of people who have similar interests, goals, or concerns. Thirdly come the Masses or People.
In mainland China, The One is the Government.

111-POWER
The Power determines how the people are governed. There are three separate branches of government: executive, legislative and judicial.

A) ADMINISTRATION
The Communist state is structured as follows:
Head of state
President Hu Jintao (since 15 March 2003); Vice President Zeng Qinghong (since 15 March 2003)
Head of government
Premier Wen Jiabao (since 16 March 2003); Vice Premier Wu Yi (17 March 2003); Vice Premier Zeng Peiyan (since 17 March 2003), and Vice Premier Hui Liangyu (since 17 March 2003)
Cabinet
State Council appointed by the National People's Congress (NPC)
Elections
President and vice president elected by the National People's Congress for a five-year term (eligible for a second term); elections last held 15-17 March 2003 (next to be held in mid-March 2008); premier nominated by the president, confirmed by the National People's Congress.

B) CONGRESS
The National People's Congress (NPC) is the highest state body and only legislative house in the People's Republic of China. Results of the most recent election are as follows:
HU Jintao was elected president by the 10th National People's Congress with a total of 2,937 votes (4 delegates voted against him, 4 abstained, and 38 did not vote); ZENG Qinghong elected vice president by the 10th National People's Congress with a total of 2,578 votes (177 delegates voted against him, 190 abstained, and 38 did not vote); 2 seats were vacant

C) JUDICIAL BRANCH
Supreme People's Court (judges appointed by the National People's Congress); Local People's Courts (comprise higher, intermediate, and basic courts); Special People's Courts (primarily military, maritime, railway transportation, and forestry courts)

D) P.C.
The Chinese Communist Party seized the reins of power in China in 1949. Elections to local committees of the Communist Party of China represent an enormous step toward the promotion of reform and democracy in China. More than a decade after the fall of the former Soviet Union and Eastern European communist regimes, the international communist movement has been spurned worldwide. The demise of the Chinese Communist Party is only a matter of time.

112-MONEY
China is experiencing “the greatest economic boom since England's Industrial Revolution.”. Then, as now, the boom was fuelled by the availability of money and the prospect of making more.
In recent decades, as Communist Party financial dictates have eased, the profitability of Chinese businesses has brought China large amounts of money.
• The Chinese economy's growth rate has averaged 9% since the start of the 1980s.
• China's savings rate is over 35% (in America, it's 2%).
• 40% of China's output goes to exports (so there's no crippling foreign debt).
• $60 billion a year in direct foreign investment, combined with a trade surplus, has brought Beijing's foreign currency reserves to over $1 trillion.
• China's fixed assets - ports, bridges, and roads - double every two and a half years.
China “will surpass the United States as the world's largest economy in as little as twenty years”.
But China with its “market socialism” will need capitalism, with taxpayers, to achieve this.

Currency
The currency is the Yuan. Note that the Yuan is also referred to as the Renminbi (RMB). The official ISO 4217 abbreviation is CNY, although also commonly abbreviated to “RMB”. The Latinised symbol is ¥.

Currency (code)
yuan (CNY).
Exchange rates
yuan per U.S. dollar - 7.97 (2006), 8.1943 (2005), 8.2768 (2004), 8.277 (2003), 8.277 (2002)
Fiscal year
calendar year

The Yuan is divided as follows:
1 yuan = 10 jiao; 1 jiao = 10 fen.

1948
Renminbi means “people's currency” and was first issued by the P.B.of C. in December 1948. One of the first tasks of the new communist government was to end the hyperinflation that had plagued China towards the end of the Kuomingtan (KMT) era.
1955
A revaluation occurred in 1955 at the rate of 1 new yuan = 10,000 old yuan. During the era of the command economy, the value of the RMB was set to unrealistic values in exchange with western currency and severe currency exchange rules were put in place.
1978
A dual track currency system was instituted, with renminbi usable only domestically, and with foreigners forced to use foreign exchange certificates.
Early 1990s
The PRC worked to make the RMB more convertible. The dual track currency system was abolished.
2008
Full convertibility remains a distant goal.
For decades the renminbi was tightly pegged at 8.28 renminbi to the U.S.$.

2005, July 21
Revalued to 8.11 per U.S. dollar, following the removal of the peg to the U.S. dollar. The People's Bank of China announced that the renminbi would be pegged to a basket of foreign currencies, rather than being strictly tied to the U.S. dollar, and would be allowed to float within a narrow 0.3% daily band against this basket of currencies.
2007, May 18
PBOC raised:
• the benchmark for the one-year lending rate by 18bp (basis points) to 6.57%
• the benchmark for the one-year deposit rate by 27bp to 3.06%
• the reserve requirement for commercial banks by 50bp to 11.5%.

Currency units per U.S. dollar, 2007
Country	monetary unit	July	June	May
China, p.r.	yuan	7.5757	7.6333	7.6773
Federal Exchange Statistical Exchange

1Yuan into others currencies, Nov 23 2007
Chinese Yuan	Japanese Yen	U.S. Dollar	Euro	Hong Kong Dollar	Taiwan Dollar	Macau Pataca
1	14.605	0.1351	0.09103	1.0503	4.3724	1.0807
Yahoo-Finance

Since it was freed from its fixed exchange rate regime two years ago, the Chinese Yuan has appreciated nearly 9% against the USD. While the Yuan's exchange rate is clearly managed by the Chinese government, many commentators agree that its rise has given off the aura of a floating currency. A truly floating currency will not happen this side of the 2008 Beijing Olympics, as the economic activity generated by the games can only add to inflationary pressures, which would depress a floating yuan. Evidently, China is growing tired of the lack of control it has over its domestic economy due to its exchange rate policy and is clearly overwhelmed by the need to continue growing its forex reserves (which now stand at $1.33 trillion) in order to control the Yuan. Bloomberg News reports:
“They have to adopt a free-float system; it's not a question of whether they will, but a question of when. After the Olympics, the new leadership will be firmly in place.”
China Moves to Let Currency Rise
Washington…
Is pushing Beijing to raise the yuan's value in the hope that it will help cut the multibillion-dollar U.S. trade deficit with China by making Chinese goods more expensive.
Beijing
Keeps the yuan undervalued, giving its exporters a price advantage.
Chinese Central Bank.
Has been forced to drain billions of dollars a month from the economy by selling bonds to reduce pressure for prices to rise. That has led to Beijing piling up more than $1.4 trillion in foreign reserves.
Next we consider the main EXPENDITURES and REVENUES of the Government.

A) MAIN REVENUES
In Mainland China, the ONE, or the state, has the most money.
The ONE controls the GDP, the central bank, the current account, the debt, the reserves, taxes and the revenues from trading.
China's state firms must carefully manage their books or face a risk of bankruptcy as the government ratchets up its economic tightening.
Companies overly reliant on credit to fund their operations will be squeezed and some are already teetering on the edge of trouble.
China has intensified its year-end ritual of credit tightening in the past two months, leaning heavily on banks to freeze net new lending until the end of 2007, and bankers said the clampdown looked set to continue into the new year.
China's top leaders said a priority for 2008 would be to tighten monetary policy in order to keep the economy from overheating. China has let thousands of indebted state firms go under since the 1990s in a process of economic restructuring that has also enabled some key companies, particularly in the resources sector, to become strongly profitable.

A1-GDP: OER, PPP, PER CAPITA (OER/PPP)

GDP can be measured using any of three aspects of economic activity - production, income and demand - but is most often discussed from the viewpoint of demand.

2007 GDP o.e.r.
World			$46.66 trillion
U.S.			$13.22 trillion
E.U.			$13.62 trillion
Japan			$4.91 trillion
Chinese States	China	$2.51 trillion
	Hong Kong	$187.1 billion
	Macau	$11.5 billion
	Taiwan	$353.94 billion
	Total		3.0 trillion
CIA World Fact Book. Figures from  January 2007.

According the 2007 GDP data, China, when combined with Hong Kong, Macau and Taiwan, at $3.064,66 trillions wields the fourth most powerful economy, following U.S., E.U., and Japan.

If GDP ppp are considered…

2007 GDP ppp.
World					$ 65,820,000,000,000
E.U.					$ 14,440,000,000,000
U.S.					$ 13,860,000,000,000
China					$ 7,043,000,000,000
Chinese States	China		$7,043,000,000,000
	Hong Kong		$ 293,400,000,000
	Macau		$ 10,000,000,000(2004)
	Taiwan		$ 690,100,000,000
	Total				$8,036,500.000.000,000
Japan					$ 4,305,000,000,000
CIA World Fact Book. This page was last updated on 24 January, 2008
GDP (PPP) $m
		IMF		World Bank		CIA WFB
World		66,228,669		66,822,997		65,960,000
European Union		13,881,051				13,080,000
United States		13,543,330		13,201,819		13,060,000
PR of China		11,606,336		10,048,026a		10,210,000
Japan		4,346,080		4,131,195		4,218,000
Taiwan		749,943				681,800
Hong Kong SAR		289,748		241,866		259,100
Macau						10,000
Sources: IMF, October 2007; World Bank September 2007; CIA WFB, October 2007.

Competitiveness

The World competitiveness scoreboard 2007
1	USA	100.000
2	Singapore	99.121
3	Hong Kong	93.541
15	China Mainland	79.484
18	Taiwan	76.050
24	Japan	72.405
…	…	…
54	Indonesia	37.410
IMD Business School. Switzerland

Will the quest for higher GDP and greener GDP prove possible with unquestioned Communist Party rule? Will China opt for democracy? Or choose a hybrid model - red, green and orange. It is going to prove much, much easier for China to go from communism to capitalism than to go from dirty capitalism to clean capitalism.

GDP OER (Nominal)

GDP, Official Exchange Rate
Rank	Country	GDP oer
1	World	$50.36 trillion (2007 est.)
2	European Union	$14.51 trillion (2007 est.)
3	United States	$13.75 trillion (2007 est.)
4	Japan	$5.103 trillion (2007 est.)
5	China	$2.879 trillion (2007 est.)
18	Taiwan	$371.3 billion (2007 est.)
40	Hong Kong	$204.5 billion (2007 est.)
143	Macau	$11.56 billion (2005)
Cia World Factbook, 24 January 2008

China has a rapid economic growth over the last two decades. Capitalism creates freedom by creating power outside the central authority. It's pretty fantastic to lift 100 million or more people out of poverty.
2004
China originally reported GDP of around $1.65 trillion. Then, some months later, China revised that number by an astounding $278 billion, and declared that its 2004 GDP had really been $1.93 trillion all along. Once a country decides its books have been off by $300 billion in one fell swoop, it's hard to know what to make of any other numbers they produce.
2005
saw a further robust increase in GDP to $2.26 trillion, according to State Department figures.
2006
$2.512 trillion
2007
Overtaking Germany? In 2006, China's GDP stood at U.S.$2.7 trillion, compared with Germany's $2.86 trillion. The Chinese economy is expected to grow 11.5% this year, while Germany's growth is estimated to be less than 3%, which prompted analysts to predict that China would replace Germany as the No. 3 economy in the world after the United States and Japan.
However, Zheng Jingping, chief engineer of the National Bureau of Statistics (NBS), dampened the optimism at a financial forum in Beijing, according to the China Securities Journal.
In addition to economic growth, changes in the value of the yuan and the euro, and the price movements within the two countries should also be taken into consideration when calculating dollar-denominated GDP, Zheng said.
The main reason is that the euro is appreciating relatively faster [than the yuan]. Taking various factors into consideration, China's GDP can't surpass Germany in this year. So far this year, the euro has appreciated 11% against the greenback, far more than the yuan.
On Wednesday, the People's Bank of China set the yuan central parity rate against the euro at 10.9916, marking a depreciation of 7% against the European single currency since the end of 2006.
So China is gaining and on the way to overtake Germany, later to overtake Japan and surpass America .
How long will it take? If China's current pace of GDP growth remains unchanged, it could leap-frog Japan in three or five years if Japan's growth remains as tepid as it has been in the past six years. How about America? That could be in a decade or two.
But this is misleading, in a sense. Even if the mainland overtakes Japan as the world's second biggest economy, China is still a developing country, with a meagre per capita GDP. The mainland's huge population of 1.3 billion makes it virtually impossible for China to become a developed country anytime soon.

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