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China GDP: how it has changed since 1980

China, the second-biggest economy in the world, has announced a cut to it's growth rate for 2012. See how China's GDP has changed since 1980 Get the data Explore the China over time interactive

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China, the world's second-biggest economy, has cut it's growth rate for 2012 to the lowest rate since 2004. Photograph: Reuters

When China cut it's growth rate for 2012 down to 7.5%, it's lowest rate since 2004, it signalled a move towards a rebalancing of the world's second-biggest economy. The premier of the Republic of China, Wen Jiabao announced the cut during the deliverance of the annual work report at the opening of the National People's Congress. Tania Branigan writes: The target of 7.5% for 2012 reflects expectations that reduced exports due to the European crisis and a fragile US recovery could dampen growth in the world's second-largest economy. But by abandoning the longstanding 8% goal the government is also signalling its desire to reshape development. "In setting a slightly lower GDP growth rate, we hope ... to guide people in all sectors to focus their work on accelerating the transformation of the pattern of economic development and making economic development more sustainable and efficient," Wen said. So how does China's economy look? We've pulled together some key indicators from the World Bank and the International Monetary Fund

(IMF) to examine how the country is getting on. We have also used data from the Congressional Research Service and the CIA World Factbook Annual GDP growth China's annual real GDP growth, %0500100015002000-30.015.00.015.030.0Real GDP growth, annual % Before the Chinese government introduced several economic growth reforms in 1979, the average annual real GDP growth rate in China was estimated at 5.3% (from 1960-1978) according to the Congressional Research Service. In 2010 the annual growth rate stood at 10.4%. As the chart above shows there have been some steep inclines and drops in China's GDP growth rate with the effect of the global recession showing in 2008 when the annual rate dropped to 9.6% compared to 14.2% during the previous year. Gross Domestic Product (GDP) China's GDP is controversial, not least because it's measured differently to other some countries. A Wikileaks US Embassy cable revealed that Liaoning Party Secretary Li Keqiang had called the GDP measure "man made", adding further to the belief by some that it is inaccurate and unreliable. The problem lies with the official exchange rate - it's established by government regulation and not determined by market forces - so therefore it's seen as not being a reliable measure of China's output in relation to other countries worldwide. As author of Understanding China's Economic Indicators, Tom Orlik wrote in The Wall Street Journal: "China's GDP data is haunted by controversy, with widespread doubts about its accuracy." According to the CIA World Factbook comparisons of output across countries is best judged, in the case of China, by looking at GDP at purchasing power parity - which takes into account the amount of money needed to buy the same goods and services in two different countries and then calculates an implied foreign exchange rate. The IMF estimated China's GDP at purchasing power parity at $11.3tn for 2011.

World Bank cuts China growth forecast

There have been concerns whether China can sustain its high growth rate amid a global slowdown Continue reading the main story

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The World Bank has cut its growth forecast for China amid warnings of slower but more stable global growth over the coming months. The bank now expects the China to grow 7.7% in 2013, down from its earlier projection of 8.4%. It also cut the forecast for global economic growth to 2.2% from 2.4%. The bank said growth in China, the world's second-largest economy, had slowed as policymakers look to rebalance its growth model. Over the past few decades China has relied heavily on exports and governmentled investment to boost its economy. However, a slowdown in key markets such as the US and Europe has seen a decline in demand for Chinese exports, prompting concerns whether China can sustain its high growth rate. There have been calls for China to take measures to boost domestic demand to offset the decline in exports and rebalance its economy. While Beijing has been keen to boost domestic consumption, analysts have said that the shift in its growth model may see China's growth rate slow in the shortterm.

'Main risk'
The World Bank's cut to China's outlook comes just six months after it raised its forecast for the Chinese economy.
Continue reading the main story

While there are markers of hope in the financial sector, the slowdown in the real economy is turning out to be unusually protracted,
Kaushik BasuWorld Bank

In a report released in December last year, the bank said that stimulus measures and approval of infrastructure projects would help boost China's growth, and raised it forecast for 2013 to 8.4% from 8.1% That was after Beijing had approved infrastructure projects worth more than $150bn (94bn). However, in its latest report, the bank raised concerns over China's investmentled growth model. "The main risk related to China remains the possibility that high investment rates prove unsustainable, provoking a disorderly unwinding and sharp economic slowdown," it warned. It further added that "should investments prove unprofitable, the servicing of existing loans could become problematic - potentially sparking a sharp uptick in non-performing loans that could require state intervention".

'Unusually protracted'
Globally, the World Bank said growth remained subdued in high income countries, especially in Europe, despite improvements in financial conditions. It added that growth in emerging economies such as Brazil and India, which have seen robust growth rates in the past few years, have slowed more recently. It said any pick-up in growth of developing countries was likely to "modest". "While there are markers of hope in the financial sector, the slowdown in the real economy is turning out to be unusually protracted," said Kaushik Basu, chief economist at the World Bank. "This is reflected in the stubbornly high unemployment in industrialised nations, with unemployment in the eurozone actually rising, and in the slowing growth in emerging economies."

China's 10 percent per annum economic growth can be sustained and will not "suddenly slow down", said Fan Gang, a renowned economist and member of the central bank's Monetary Policy Committee.

"Although China's economy faces a number of challenges and risks, the high growth rate is bolstered by four important factors," Fan said at a forum in North China's Tianjin Municipality.

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The first factor is China's reforms. Fan said that as long as China pursues social and economic reforms, its economy will keep growing rapidly. "One important reform is the privatization of Stateowned enterprises (SOEs). Over the past 10 years, 27 million workers laid off from SOEs have found jobs in the private sector," he said.

More macro control to avoid overheating

The second is the fact that China has opened up to the outside world, welcoming all kinds of foreign investments and gradually opening its banking sector. The third factor is education and technology support. According to Fan, the central government has invested a huge amount of capital and human resources in developing education and technology. "The effect will emerge over time, but it is definitely a strong stimulant to China's growth," he said. Fan said the final factor was urbanization which proved to be a vital driver of market demand and produced massive investments in infrastructure. China's urbanization drive aims to turn 45 percent of the rural population into urban residents, according to Fan.