China's economy continues to register solid growth of
7-8% unofficial figures suggest 5-6%), despite the weak
global economic environment. The economy has been sustained
by strong FDI inflows and growing consumer and government
spending. The forthcoming change of leadership is not
expected to result in any significant changes to the current
economic reform program. The new team will, however, be
even more determined to maintain steady growth in order
to avoid social instability.
China has made massive economic progress over the
|last two decades and is now the world's sixth largest
economy (second largest on a PPP basis). Despite this,
huge challenges remain with state owned enterprises, the
banking system, and fiscal sustainability.
Standard of living
Growth of income in urban areas continues to outpace that
in rural areas. Per capita disposable annual income of
urban residents was 6813 yuan in 2001, up 10.1% (8.5%
in real terms). For rural residents, average annual cash
income was 2366 yuan, up 5% (4.2% real terms). However,
per capita income figures mask the continuing rise in
numbers of the middle class in China, who can increasingly
afford to buy imported brands, luxury goods and foreign
education for their children.