China Briefing
China's economy during the last quarter century has changed from a centrally planned system that was largely closed to international trade to a more market-oriented economy that has a rapidly growing private sector and is a major player in the global economy. Reforms started in the late 1970s with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, the foundation of a diversified banking system, the development of stock markets, the rapid growth of the non-state sector, and the opening to foreign trade and investment. China has generally implemented reforms gradually, including the sale of minority shares in four of China's largest state banks to foreign investors and refinements in foreign exchange and bond markets in 2005. After keeping its currency tightly linked to the US dollar for years, China in July 2005 revalued its currency by 2.1% against the US dollar and moved to an exchange rate system that references a basket of currencies. Cumulative appreciation of the renminbi against the US dollar since the end of the dollar peg reached 15% in January 2008.
The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. China in 2007 stood as the second-largest economy in the world after the US, Annual inflows of foreign direct investment in 2007 rose to $75 billion. By the end of 2007, more than 5,000 domestic Chinese enterprises had established direct investments in 172 countries and regions around the world.
Beijing is the political and cultural capital of China. It was also the seat of the Qing dynasty emperor until the formation of a republic in 1911, so it has rich historical sites, and important government institutions. Beijing hosted successfully the Summer Olympic Games of 2008. For such a historical event, both Beijing government and people have worked so hard in order to get well prepared and offered the perfect gift to the whole world.
Shanghai has firmly established itself as the business and finance capital of China. Shanghai has continuously expanded due to the growing scale of overseas investment; foreign investment has been spreading into commercial, financial, tourism, real estate and many other sectors.
Hong Kong has become China's Special Administrative Region (HKSAR) headed by the Chief Executive. Under the principle of "One Country, Two Systems", Hong Kong is allowed to retain its capitalist system and lifestyle for at least 50 years after the hand over. Hong Kong is one of the most dynamic regions in the world and it is the world's eighth largest trading economy calculated in terms of total value of trade undertaken. It is also the world's seventh largest importer and the world's ninth largest exporter and the vast majority of the 50,000 Hong Kong companies incorporated annually are local trading companies doing real business in the region.
