INSTITUTE FOR INTERNATIONAL ECONOMICS
Projections for the Chinese Economy
Nicholas R. Lardy Senior Fellow Institute for International Economics
1 Nicholas R. Lardy Institute for International Economics
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Index of China's Real GDP Growth, 1978-2003
1000 900 800 700 1978 = 100 600 500 400 300 200 100 0
97 00 96 92 99 95 98 88 80 87 83 79 86 82 78 81 84 85 89 90 91 93 94 19 20 01 02 20 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 20 20 03
Real GDP growth
2
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Growth of China Trade and World Trade 1977-2003
7000 6000 5000 1977 = 100 4000 3000 2000 1000 0
86 89 90 91 92 85 88 93 87 84 83 98 99 00 95 79 02 20 82 97 94 81 96 01 78 77 80 19 19 19 19 19 19 20 19 19 19 19 19 19 19 19 19 19 19 19 19 20 19 19 19 19 20 03
China Merchandise Trade
World Total Trade
3
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Domestic Investment and Saving Share of GDP, 1979-2003
48% 46% 44% 42% 40% 38% 36% 34% 32% 30% 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Gross Domestic Investment Gross National Saving
4
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Cumulative FDI in China, 1982-2003
600
500
400 US$ Billions
300
200
100
0
83 82 84 85 86 92 87 88 89 90 91 93 94 95 01 96 97 98 99 00 02 20 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 20 20 20 03
5
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Exports of Foreign Affiliates as a Share of China's Total Exports, 1985-2003
60%
50%
40%
30%
20%
10%
0%
85 88 93 95 97 90 87 92 99 91 89 94 96 01 02 20 00 86 98 19 19 19 19 19 19 19 19 19 19 19 20 19 19 19 19 20 20 03
6
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China's Average Import Tariff Rate, 1982-2005
60%
50%
40%
30%
20%
10%
0%
94 95 96 99 82 83 84 88 89 85 86 90 87 91 92 93 97 98 00 01 02 03 04 20 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 05
Tariff rate
Tariff rate (WTO)
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Scope of Import Quotas and Licenses, 1988-2005
50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0%
88 98 90 94 91 01 02 92 04 20 95 99 19 19 19 19 19 19 20 19 19 19 19 19 19 20 20 03 20 20 05 89 93 97 96 00
Encumbered Tariff Lines
8 Nicholas R. Lardy Institute for International Economics
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Openness of the Chinese Economy: Imports as a Share of GDP, 1990-2003
50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 1990 1991 1992 1993 1994 Imports 1995 1996 1997 1998 1999 2000 2001 2002 2003E
Imports & Foreign Affiliates' Domestic Sales
9
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Market Price Formation in China, 1978-2001
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Source: Lardy, Integrating China in the Global Economy, (Brookings, 2002)
Retail Goods
Agricultural Goods
Producer Goods
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Agricultural Employment, 1978-2002
450
90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Agricultural Employment (LHS) Percent of Total (RHS)
400
350
300
People (Millions)
250
200
150
100
50
0
11
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M2 Growth, 1999-2003
22%
20%
18%
16%
14%
12%
10% 1999 2000 2001 2002 2003
12
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Increase in the Stock of Domestic and Foreign Currency Loans Outstanding
3.5
3.0
2.5 RMB Trillions
2.0
1.5
1.0
0.5
0.0 1998 1999 2000 Domestic Currency 2001 Domestic and Foreign Currency 2002 2003
13
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Increase in Loans Outstanding Relative to GDP, 1989-2003
25%
20%
15%
10%
5%
0%
91 92 89 90 97 99 94 01 96 98 93 00 19 19 19 95 19 19 19 19 20 02 19 19 19 20 19 20 20 03
Change in Loans Outstanding/GDP
14
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Investment as a Share of GDP, 1979-2003
48% 46% 44% 42% 40% 38% 36% 34% 32% 30%
79 80 81 83 82 84 85 86 88 87 89 90 91 93 92 94 95 96 97 98 99 00 01 02 20 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 20 20 20 03
Gross Domestic Investment Rate
15
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Consumer Price Inflation, 1990-2004Q1
30%
25%
20%
15%
10%
5%
0%
-5% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004Q1
16
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People's Bank of China Corporate Goods Price Index, Percent Change, 1999-2004
10% 8% 6% 4% 2% 0% -2% -4% -6%
19 20 20 20 20 20 04 99 00 01 02 03
17
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Real Lending Rate, 2002-2004
10%
8%
6%
4%
2%
0%
-2%
-4%
4 1 2 9 8 5 4 1 2 9 8 5 2 3 6 7 0 1 2 3 6 7 .0 .0 .0 .0 .0 .0 0 1 .0 2 .0 04 20 20 04 .1 .1 .0 .1 .0 .0 03 03 03 03 03 03 02 02 02 02 02 02 03 02 03 02 03 02 02 02 03 03 03 .1 .0 .0 .0 .0 .1 .1 .0 .0 .0 .0 04 .0 3
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
1-Year Loan Interest Rate - Change in Overall Corporate Goods Price Index
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20
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PRC Official Foreign Exchange Reserves 1991-2004Q1
600
500
400
US$ billion
300
200
100
0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004Q1
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China's Foreign Exchange Reserves and Total RMB Loans Outstanding, 2001-March 2004
20 19 18 450 17 RMB Trillion US$ Billion 16 15 14 13 250 12 11 10
01 02 03 20 20 20 20 04
550
*
500
400 350 300
200 150
RMB Loans (LHS)
Foreign Exchange Reserves (RHS)
* From 12/2003 on, foreign exchange figures are adjusted to reflect $45 bn transfer to SOCB.
20
Nicholas R. Lardy Institute for International Economics
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M2 Growth, January 2003-March 2004
24%
22%
20%
18%
16%
14%
12%
10%
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Nicholas R. Lardy Institute for International Economics
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