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NAME : MEGAAVARTHINY MAHENDREN

ID NUMBER : DCA17-03133039

COURSE : DIPLOMA IN CORPORATE ADMINISTRARION

TITLE OF ASSIGNMENT : THE ECONOMIC OF CHINA

DATE OF SUBMISSION : 2
ND
JUNE 2014

LECTURERS NAME : MR. SASITHARAN MANOKARAN





LECTURER SIGNITURE



HEAD OF FACULTY
SIGNITURE



STUDENT SIGNITURE

ACKNOWLEDGEMENT

Every work accomplished is a pleasure a sense of satisfaction however a number of people
always motivate criticize and appreciate a work with their objective ideas and opinions. Hence
we would like to use his opportunity to than all, who have directly or indirectly help us to
accomplish this project.

Firstly I would like to thank Mr. Sasitharan sir without whose support this project could not be
completed. Next we would like to thank all the people, who gave their valuable time and
feedback to the project. We would also like to thank my collage for supporting us with resources,
which beyond any doubt have helped me.

Let me also use this opportunity to thank our team members who have contributed to this project
with their invaluable opinions and suggestions, which have gone along way in soothing our
rough edges as a teammate.












THE GROSS DOMESTIC PRODUCT (GDP) OF CHINA
The Gross Domestic Product (GDP) in china was worth 8230 Billion US dollars in 2012.The
GDP value of china represents 13.27 percent of the world ecoomy.GDP in china is reported by
the world Bank group.GDP in china averaged 1102.08 USD Billion from 1960 until 2012,
reaching an all time high of 8230.00 USD Billion in 2012 and a record low of 46.50 USD Billion
in 1962.



Actual Previous highest Lowest Forecast Dates unit Frequancy
8230.00 7320.00 8230.00 46.50 9768.86
2014/06
1960-2012 USD
Billion
Yearly


The Gross Domestic Product (GDP) measures of national income and output for a given
countrys economy. The Gross Domestic Product (GDP) is equal to the total expenditures for all
final goods and services produced within the country in a stipulated period of time. This page
provides china GDP- actual values, historical data, forecost, chart ,statis, economic calendar and
news.




GDP Last Previous Highest Lowest Forecast Unit
GROSS
FIXED
CAPITAL
FORMATION
241756.80 2012-
06-29
215682.00 241756.80 80.70 243937.80 2012-
12-31
CNY
HML
[+]
GROSS
NATIONAL
PRODUCT
516282.10 2012-
06-29
468562.40 516282.10 679.00 520586.64 2012-
12-31
CNY
HML
[+]
GDP PER
CAPITA
3348.01 2012-
12-31
3120.93 3348.01 85.52 3685.29 2014-
06-30
USD [+]
GDP PER
CAPITA PPP
7957.62 2012-
12-31
7417.89 7957.62 523.95 8759.27 2014-
06-30
USD [+]
GDP
GROWTH
RATE
1.40 2014-
02-15
1.70 2.50 1.40 2.06 2014-
06-30
Percent [+]
GDP
ANNUAL
GROWTH
RATE
7.40 2014-
03-31
7.70 14.20 3.80 7.40 2014-
06-30
Percent [+]
GDP 8230.00 2012-
12-31
7320.00 8230.00 46.50 9768.86 2014-
06-30
USD
Billion
[+]
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curb lending surge
China Annual inflation Rate Rises 2.5%
in January
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US payrolls Rise more than expected in April
Pakistan Trade Deficit Narrows for second straight
month
Euro Area Unemployement Rate at 11.8%
Japanese unemployement rate stable at 3.6%
US ISM manufacturing Pmi up to 4-month high
Market manufacturing PMI slows slightly in April
US consumer spending surges in March










THE COMPONENT OF CHINA

In the consumers spend around 70% of GDP most other developed economies follow this pattern
the UK, Italy, Germany and finance are all around 6% of GDP. Even emerging economies such
as south Korea and India manage AROUND 55% GDP. China is different . Despite consumption
hitting 47%of GDP in the 1990s it has fallen back in recent times to around 36%. Part of the
reason behind the fall in the Chinese consumers share of GDP is the enormous amount of
external demand for Chinese goods. With the world economy growing many economies have
been willing to import cheap manufactured items from China.
Therefore exports have been a rising proportion of GDP. If china is to be less reliant on exports
and is keen to addresses its trade surplus with the rest of the world , then finding ways of raising
internal consumption are important. A rising saving rate is on explanation for falling
consumption and certainly china does save more than most. The US households manage to save
around 1% of income ; EU economies manage little more at around 15%, but this below the rates
of 21% seen a decade ago.
The Chinese like or need , to save because of the costs of higher education and the lack of good
public health care. But any major uplift in Chinese savings of late has no come from households.
Instead it has been firms and government ploughing profits from a booming. Economy into US
treasury bonds. Another more interesting explanation for following consumption is the amount
of GDP which flows workers as earnings. In the last ten years the share wages to GDP has fallen
from 53% to 41%. This compares with a relatively static 56% for the US. This fall in GDP which
is apportioned to chinese workers represents a number of factors.
First an increasing apply of migrant workers from the country side to the industrialized cities has
generated a soft labour market which has kept wages low. Secondly, firms have been incapable
of taking on these cheaper workers because capital restrictions for small. Companies have
limited the ability to borrow and increase capital. Thirdly large firms with access to finance have
prospered. Cheap credit has made borrowing easy and this has led to an increase in capital
intensive production processes which require less.

THE PRICE LEVEL OF CHINA

This paper presents an abridged history of Chinas macroeconomy from the early 1950s to 2004.
It is abridged because only three macroeconomic variables, money stock M, real output Y and
the price level P are analyzed. The basic hypothesis concerning the co-movements of these three
variables is due to the work of Milton Friedman (1994). A major proposition guiding our work is
that when money supply increases, whatever the cause, real output will first increase before the
price level increases but real output will die down more rapidly than prices. This proposition will
be used to explain the changes in the price level and output in relation to the changes in money
stock in Chinas macroeconomic history from the 1950s to 2004. This is done in section II.

In section III we will explain the price level and inflation statistically by first estimating a linear
regression of log P on log (M/P). If this regression is interpreted as a long-run equilibrium
relation, or a cointegrating relation, between log P, and log (M/Y), the residuals can be
interpreted as deviations from equilibrium or errors in the explanation of log P, to be denoted by
u. To explain inflation as measured by log P, we use as explanatory variables its own lagged
value, log(M/Y) and u(t-1). The coefficient of u(t-1) is expected to be negative because a value
of log P above equilibrium in the last period will tend to dampen price increase in the current
period in this error-correction equation to explain inflation. This section updates the work of
Chow (1987) and follows the methodology of Engle and Granger (1987). One interesting result
is that the parameters of this error-correction equation explaining inflation are temporally stable
from 1954 to 2002 as confirmed by the chow (1960) test using 1979, the year economic reform
started as break point.

We estimate in section IV a VAR to explain the changes in the three variables, log M, log P and
log Y, denoted by the vector x. The VAR is a vector regression of x(t) on x(t-1) and x(t-1). By
the maximum likelihood method of Johansen (1991), the coefficient matrix of x(t-1) is found to
have rank one, to be written as ab. The vector bx(t-1) corresponds to the regression of log P on
log(M/Y) in section III, and turns out to be similar numerically. Using this VAR we compute the
impulse responses of log P and log Y to unexpected changes in M2. The dynamic effects are
found to be consistent with the major propositions of Milton Friedman stated above on the
effects of money supply on price and output, and as recently summarized in Bernanke (2003).
Section V compares the impulse responses estimated by using US and Chinese data with M1
replacing M2, and finds that the general patterns are quite similar in spite of the institutional
differences between these two countries. Section VI concludes.

It is worthwhile in the introduction to state the possible contribution of this paper and the
position that we take to avoid possible misunderstanding. On our presentation of monetary
history although the facts are well-known our interpretation is perhaps original and provides a
background for the econometric analysis to follow. On the reliability of Chinese data, we believe
that the data selected are reliable for econometric analysis as illustrated by examples presented in
Chow (2002) and elsewhere. We ask a skeptical reader to keep and open mind and see what the
analysis of this paper will show. Concerning the possible effect of institutional changes after
1978, it is our purpose to find out whether the effects of money on prices and output and whether
the relation between inflation and the ratio of money supply and output remained the same after
economic reform. The fact that China had a planned economy before 1979 does not rule out the
possibility that the mechanism explaining inflation remains valid. Just witness the inflation of
over 16 percent in 1961 which could be explained by the large reduction in output and a
substantial increase in money supply. When the first author started using the error-correction
model to explain inflation in 1985, data up to only1984 were available and were used to estimate
an equation that was capable of predicting in 1985 (before the fact) see Chow (1987) for a
revised version of this study.

In this section we provide a brief explanation of the important movements of price and output in
response to changes in money supply where money supply itself can be the result of other
factors. This is a simplified economic history but it can be interesting to the extent that money
supply changes can be explained and the resulting movements in price and output are consistent
with Friedmans proposition as stated at the beginning of this paper. We start with an explanation
of the large price changes, and then explain the large output changes. Table 1 provides five sets
of data from 1954 to 2002: General retail price index P at the end of the year (column 2), the
inflation rate measured by 100 times P(t)/P(t-1) (column 3), real GDP index Y (column 4), M2 at
the end of the year in 100 million yuan (column 5) and M1 at the end of the year (column 6).

Year General
Retail Price
Index
Pt/Pt-1*100 GDP
Index
M2 M1
1952 0.8227 99.6 22 74.50314 64.6
1953 0.8506 103.4 25.1 82.00875 79.0
1954 0.8705 102.3 26.6 90.20963 87.4
1955 0.8793 101.0 28.3 94.85521 89.9
1956 0.8793 100.0 32.3 132.3043 120.0
1957 0.8926 101.5 33.7 139.0515 133.9
1958 0.8947 100.2 41.2 194.0242 213.5
1959 0.9028 100.9 44.6 226.401 257.4
1960 0.9308 103.1 43.9 256.6131 289.3
1961 1.082 116.2 30.9 286.1142 359.2
1962 1.1229 103.8 28.9 233.48 353.5
1963 1.0567 94.1 32 214.0444 365.6
1964 0.9904 96.3 37.2 214.5185 352.4
1965 0.9875 97.3 43.5 246.5319 399.6
1966 0.9801 99.7 50.9 285.2925 454.5
1967 0.9809 99.3 44.5 309.5001 499.1
1968 0.9698 1001.1 44.2 335.6512 520.6
1969 0.976 98.9 52.7 336.8679 505.6
1970 0.9603 99.8 65 320.8612 506.6
1971 0.9581 99.2 69.5 357.9469 553.8
1972 0.9639 99.8 71.5 404.8609 586.7
1973 0.9691 100.6 77.5 454.3348 681.4
1974 0.9706 100.5 78.3 494.3595 769.2
1975 0.9735 100.2 84.9 525.0772 845.4
1976 0.9934 100.3 82.6 573.4608 900.6
1977 1.000 102.0 89 595.6617 905.6
1978 1.02 100.7 100 668.1896 954.7
1979 1.081 102.0 107.6 867.0332 1208.1
1980 1.107 106.0 116 1178.303 1486.2
1981 1.128 102.4 122.1 1453.783 1707.0
1982 1.145 101.9 133.1 1761.087 1972.9
1983 1.177 101.5 147.6 2247.387 2291.5
1984 1.281 102.8 170 3171.021 3233.0
1985 1.358 108.8 192.9 4188.024 3450.1
1986 1.457 106.0 210 5460.866 4393.8
1987 1.727 107.3 234.3 7154.482 5173.1
1988 2.034 118.5 260.7 9378.91 6376.4
1989 2.077 117.8 271.3 11836.63 6804.6
1990 2.137 102.1 281.7 15293.4 6950.7
1991 2.252 102.9 307.6 19349.9 8633.3
1992 2.549 105.4 351.4 25402.2 11731.5
1993 3.102 113.2 398.8 34879.8 16280.4
1994 3.561 121.7 449.3 46923.5 20540.7
1995 3.778 114.8 496.5 60705.5 23987.1
1996 3.808 106.1 544.1 76094.9 28514.8
1997 3.709 100.8 592 90995.3 34826.3
1998 3.598 97.4 638.5 104498.5 38953.7
1999 3.544 97.0 684.1 119897.9 45837.3
2000 3.516 98.5 738.8 134610.3 53147.2
2001 3.47 99.2 794.2 158301.9 59871.6
2002 3.47 98.7 857.4 185007 70861.8



THE LABOR MARKET OF CHINA
China Labor Market is a news portal offering you the latest information about the Chinese labor
market and other related topics. We present the latest news articles, research reports and video
material on the changes in the labor market. Stay well informed on the latest events concerning
labor laws, labor migration and periodic statistics here at China Labor Market. Stay updated by
subscribing to our mailing list and well make sure you dont miss out on the latest news.
Cigna: Global Survey Finds China Employers Promote Health in the Workplace
In a special report prepared for the Global Healthy Workplace Awards and Summit (GHWAS)
sponsored by Cigna in Shanghai, nearly half of Chinas employers surveyed say they promote
health at the workplace, and 73 percent say they measure specific health outcomes. The
preliminary findings, reflecting results from 1,000 employers worldwide, including more than 80
in China, were released today as part of a pre-publication preview of results from the 2014 Buck
Consultants global survey, Working Well: A Global Survey of Health Promotion and
Workplace Wellness Strategies. Since 2007, this survey has investigated emerging trends in
employer-sponsored health promotion and wellness programs. Cigna and the GHWAS are the
exclusive sponsors of the 2014 survey which will be released in full in May by Buck
Consultants, Cigna and the Global Healthy Workplace Awards and Summit.
Among the findings:
48% of Chinese respondents offer a health risk appraisal (HRA) while another 22% plan
to offer an HRA next year.
73% of Chinese employers surveyed measure specific outcomes from health promotion
programs compared to 53% globally. This may be related to occupational health
indicators that are better established and easier to track.
54% of surveyed employers have had a strategy for five years or less.
We see an encouraging trend in China with regard to promoting healthy workplaces. Both the
government and employers have recognized the value of enhancing population health via the
workplace and a growing number of programs have surfaced. However, the working
environment, physical and psychosocial, still is a significant risk to employee health in many
workplaces, said Wolf Kirsten, founder and president of International Health Consulting.
Onsite occupational health programs are the most common workplace programs, followed by
regular communications, onsite medical facilities and ergonomic programs. Employee meetings
are the main channel for communication, while electronic tools such as targeted e-mails and web
portals are also used.
Safety, both workplace and personal, is at the top in terms of health issues targeted by Chinas
employers.
Environment, Health and Safety (EHS) professionals often take leadership of health promotion
in China, especially in the large manufacturing and mining industries, said Barry Hall, Buck
Consultants Global Innovation Research Leader. Perhaps as a result of this focus, improving
workplace safety is the top objective of health promotion programs in China indicated by survey
respondents.
Globally, the survey finds that workplace health promotion programs remain more common in
North America compared to the rest of the world. Thirty percent of responding organizations
have a fully implemented wellness strategy. This number continues to increase every year,
documenting the continued growth in workplace health promotion. Fifty-four percent of
multinational employers have global strategies (up from 34 percent in 2007), and those that do
not cite differing cultures, laws and practices as well as lack of global oversight for health care as
their key obstacles to implementing a global strategy. Employers leading reasons for
implementing wellness programs are to reduce sick leave and presenteeism, with improving
workforce morale becoming increasingly important, especially in Europe and Australia.
Worldwide survey findings will be available and distributed in May.
Workplace wellness promotion is a relatively new concept for local employers in China but
the level of interest and desire to understand is growing very quickly. The Global Healthy
Workplace Awards & Summit undoubtedly creates an ideal platform to share best practices and
recognize those who have accomplished effective and innovative programs in the workplace.
This award program can serve as a catalyst for employers to drive health and wellness initiatives
for their employees to improve their health, wellbeing and sense of security, said Howard
Gough, CEO of Cignas Middle East & Asia Pacific Region, Global Employer Segment.
The GHWAS attracted employers of all sizes, health system leaders, universities, policy leaders,
NGOs, and world-renowned award judges and speakers amid a two-day packed agenda on topics
ranging from addressing public health promotion in China, to mental well-being and happiness at
work, to creating healthy workplaces for NGO workers.
About the Cigna Foundation
The Cigna Foundation is a private foundation funded by contributions from Cigna Corporation
(NYSE: CI) and its subsidiaries. The Cigna Foundation supports organizations sharing its
commitment to enhancing the health of individuals and families, and the well-being of their
communities, with a special focus on those communities where Cigna employees live and work.
About Cigna
Cigna Corporation (NYSE: CI) is a global health service company dedicated to helping people
improve their health, well-being and sense of security. All products and services are provided
exclusively through operating subsidiaries of Cigna Corporation, including Connecticut General
Life Insurance Company, Cigna Health and Life Insurance Company, Life Insurance Company
of North America and Cigna Life Insurance Company of New York. Such products and services
include an integrated suite of health services, such as medical, dental, behavioral health,
pharmacy and vision care benefits, and other related products including group disability, life, and
accident coverage. Cigna has sales capability in 30 countries and jurisdictions, with
approximately 80 million customer relationships throughout the world. To learn more about
Cigna, including links to follow us on Facebook or Twitter, visit www.cigna.com
About Buck Consultants
Buck Consultants, a Xerox Company, is a leader in human resource and benefits consulting with
more than 1,500 professionals worldwide. Founded in 1916 to advise clients in establishing and
funding some of the nations first public and private retirement programs, Buck is an innovator
in the areas of retirement benefits, health and welfare programs, talent and human resources
solutions, compensation, and employee communications. Learn more about Buck Consultants
at www.buckconsultants.com.
About GKEN
Global Knowledge Exchange Network on health care (GKEN) is chartered as a not for profit
(501c-3) and is focused on advancing emerging better practices in health and health care among
developing and developed nations around the globe. Our emphasis is on the health system
aspects of health and healthcare. Through engaging thought leaders around the globe we create
cross cultural learning that enables improvements in health system practices.
About i-genius
i-genius is a world community of social entrepreneurs with members in over 200 countries. It
promotes social entrepreneurship and provides training, events and business development
support to its global community. Based in London.
About International Health Consulting
International Health Consulting (IHC) is an independent health promotion consultancy with
locations in central Europe and the United States. Armed with a network of over 250
international health promotion professionals worldwide, IHC can develop customized solutions
that are tailored to local populations.

China Labor Activist Freed, Says Will Still Help Strikers

A Chinese labour activist has been freed after being detained for more than two days by security
agents who he says tried to convince him not to make contact with workers involved in Chinas
biggest strike in years. Zhang Zhirus brief detention underscores nervousness among officials
about the strike, which began on April 14 at a Yue Yuen Industrial Holdings Ltd shoe
manufacturing complex that employs some 40,000 workers in the southern industrial city of
Dongguan. A colleague of Zhangs at the Shenzhen Chun feng Labor Dispute Service Center,
which he runs, was detained separately on Tuesday and has not been released, Zhang told
Reuters by telephone on Friday.

Labor activists say the strike is one of Chinas biggest since market reforms started in the late
1970s. It is already starting to have ripple effects on businesses. German sportswear firm Adidas
AG is shifting some orders from the factory to minimise the impact of the strike, and a
spokesman for Nike Inc, which also sources shoes from the facility, said on Thursday the
Oregon-based company was watching developments closely. Zhang had been working with other
activists and lawyers to help workers at Yue Yuen organise and press their demands regarding
social insurance payments. He visited the Dongguan site on Monday after an attempt last week
was thwarted by security agents.

Speaking on Friday from the southern city of Shenzhen, next to Dongguan, Zhang said domestic
security agents summoned him to a meeting on Tuesday and asked him to promise he wouldnt
make contact with the workers. He refused, and was taken to what the agents said was a
vacation area in the suburbs of nearby Guangzhou, where they removed his mobile phone,
confined him to a room and barred him from making outside contact, he said. They tried to
convince him to write a statement that he was safe and on a trip for fun with friends, but he
refused. He was allowed a telephone call to his wife on Wednesday afternoon. Late on Thursday
morning, he was driven back to Shenzhen, where he lives, and released, Zhang said. He was
again told not to make contact with the striking workers.

They said this would be going against the work of the government, which he was told was
trying to facilitate an arrangement to end the strike. But, definitely, if the workers have a need
or if they have some questions and come to us we will still give them opinions and suggestions,
telling them how they can better protect their interests, Zhang said. The Dongguan office of the
Ministry of State Security did not have an immediate response to questions about the case. Calls
to the Dongguan police propaganda office went unanswered. Geoff Crothall, at the Hong Kong-
based watchdog China Labour Bulletin, said the detentions of Zhang and his colleague were
illegal, but not a reflection of a broader crackdown amid a recent wave of labour activism. We
do not think it is politically motivated or represents a crackdown on labour rights groups in
general. Rather, it is a local action in response to a specific issue, he wrote in emailed
comments.
Separately, a spokesman for the Ministry of Labour and Social Security told reporters in Beijing
on Friday that Yue Yuen had been underpaying its social welfare contributions.The related
department has already ordered the factory to rectify the wrongdoings before April 25, Li
Zhong said. Our ministry will continue to keep a close watch on the progress of the issue.










THE GROWTH OF CHINA ECONOMY
China's economy grew at its slowest pace in 18 months at the start of 2014, but did a touch better
than expected and showed some improvement in March, suggesting Beijing will not rush to
follow up recent steps to support activity. Authorities have ruled out major stimulus to fight
short-term dips in growth, signaling the slowdown was an expected consequence of their reform
drive, even as some analysts think the economy will lose further momentum.

The economy grew 7.4 percent in the January-March quarter from a year earlier, the National
Bureau of Statistics said on Wednesday. That was slightly stronger than the median forecast of
7.3 percent in a Reuters poll but still slower than 7.7 percent in the final quarter of 2013. It was
China's slowest annual growth since the third quarter of 2012, when the world's second-largest
economy also grew 7.4 percent. "The slowdown of China's economy is a reflection of a
transformation of the economic mode," said Sheng Laiyun, of the National Bureau of Statistics.

"There is no fundamental change in the improving trend of China's economy. The economy is
still moving steadily towards the expected direction."For the quarter, the economy grew 1.4
percent, the slowest rate in two years, which Credit Agricole strategist Dariusz Kowalczyk said
equated to annualized growth of 5.8 percent. "This highlights the depth of deceleration at the
start of the year," he said.

Beijing has announced some modest measures, such as tax cuts for small firms and speeding up
investment in railways, to try to steady growth near its target of 7.5 percent without disrupting
plans to restructure the economy or worsening problems of overcapacity and debt. "Policymakers
seem pretty comfortable with the current pace of growth," said Julian Evans-Pritchard, an
economist at Capital Economics in Singapore. "I don't think they're going to announce any
further significant measures to support growth."

Activity data for March, released with the GDP figures, showed that China may be making some
headway in its attempt to enhance the role of consumption and cut its reliance on traditional
growth engines of exports and investment. Retail sales were a shade ahead of forecasts with an
annual increase of 12.2 percent, while factory output came in just below expectations with a rise
of 8.8 percent.

"That sector is continuing to moderate and now there is an even bigger gap between industrial
production and retail sales. So the rotation from relying on heavy industries towards
consumption is certainly coming to fruition," Annette Beacher, head of Asia-Pacific research at
TDSecurities in Singapore said. Cumulative fixed-asset investment in the first three months of
the year was 17.6 percent higher than a year earlier, again on the low side of forecasts.

SERVICES IMPORTANT

The services sector, which includes retail, made up 49 percent of gross domestic product in the
first quarter, 4.1 percentage points more than the industrial sector. Growth in retail bodes well for
employment, a top government priority, as services are now the biggest employer in China. "The
resilience of the relatively labor-intensive services sector has helped the labor market hold up
reasonably well in the first quarter, even though it cooled," Louis Kuijs, RBS economist in Hong
Kong, said in a note.

Previously released figures for March had raised concerns that economy was losing more
momentum than expected, and even though first-quarter GDP was slightly better than forecast,
those worries remained. Exports fell for the second month in a row and imports dropped sharply
in March, while money supply grew at its slowest annual pace in more than a decade. Official
and private surveys also show the manufacturing sector continuing to struggle. Stephen Green,
an economist with Standard Chartered in Hong Kong, expects a 50 basis point cut on the reserve
requirement ratio banks in coming months, a move that would free up more funds in the
economy. "It's not bad enough to change monetary policy, but forward indicators suggest that in
the next few months we will see more aggressive easing," Green said.

















UNEMPLOYMENT RATE OF CHINA
Unemployment Rate in China increased to 4.10 percent in the fourth quarter of 2013 from 4
percent in the third quarter of 2013. Unemployment Rate in China is reported by the Ministry of
Human Resources and Social Security of the PRC. Unemployment Rate in China averaged 4.14
Percent from 2002 until 2013, reaching an all time high of 4.30 Percent in the second quarter of
2011 and a record low of 3.90 Percent in the third quarter of 2002.


Actual Previous Highest Lowest Forecast Dates Unit Frequency
4.10 4.00 4.30 3.90 4.00 | 2014/03 2002 - 2013 Percent Quarterly

labor Last Previou
s
Highest Lowest Forecast Unit
Employed
Persons
76977.0
0
2013/
Dec
76704.0
0
76977.0
0
20729.
00
77149.8
0
2014/J
un
Tens of
Thousa
nds
[
+
]
Job
Vacancies
629195
6.00
2014/
Mar
512534
7.00
668248
6.00
856007
.00
521162
2.51
2014/
Mar
[
+
]
Labor
Costs
106.90 2014/F
eb
107.50 110.40 106.90 106.69 2014/J
un
Index
Points
[
+
]
Retirement
Age Men
60.00 2014/J
an
60.00 60.00 60.00 60.00 2014/J
un
[
+
]
Retirement
Age
Women
50.00 2014/J
an
50.00 50.00 50.00 50.00 2014/J
un
[
+
]
Unemploy
ed Persons
926.00 2013/
Dec
921.00 926.00 810.00 925.81 2014/
Mar
Thousa
nd
[
+
]
Wages 46769.0
0
2012/
Dec
42452.0
0
46769.0
0
445.00 50855.2
3
2013/
Dec
CNY [
+
]
Wages in
Manufactu
ring
41650.0
0
2012/
Dec
36494.0
0
41650.0
0
597.00 46633.4
3
2013/
Dec
CNY [
+
]
Population 1360.72 2013/
Dec
1354.04 1360.72 551.96 1361.28 2014/
Dec
Million [
+
]
Unemploy
ment Rate
4.10 2013/
Dec
4.00 4.30 3.90 4.00 2014/
Mar
Percent [
+
]











INFLATION OF CHINA
The inflation rate in China was recorded at 2.40 percent in March of 2014. Inflation Rate in
China averaged 5.76 Percent from 1986 until 2014, reaching an all time high of 28.40 Percent in
February of 1989 and a record low of -2.20 Percent in April of 1999.


Actual Previous Highest Lowest Forecast Dates Unit Frequency
2.40 2.00 28.40 -2.20 2.48 | 2014/04 1986 - 2014 Percent Monthly
China Inflation Rate Accelerates in March

Higher fresh food prices boosted Chinese annual consumer prices up to 2.4 percent in March of
2014, after slowing to 2 percent in the previous month. On a monthly basis, prices fell 0.5
percent. The highest upward pressure came from food cost, which accelerated to an annual 4.1
percent from 2.7 percent in February. Fruit prices rose 17.3 percent and vegetables went up 12.9
percent, while prices of pork fell for the third straight month by 6.7 percent. Prices of consumer
goods increased at a faster 2.2 percent, clothing cost accelerated slightly to 2.3 percent and
healthcare prices edged up 1.2 percent. Downward pressures came from transport,
communication and tobacco (prices fell 0.4 percent and 0.7 percent year-on-year, respectively).
On a monthly basis, food prices dropped 1.6 percent and non-food cost increased 0.1 percent.
The CPI rose 2.3 percent in the first quarter of 2014 compared with the same period a year
earlier, down from 2.9 percent in the previous quarter and below the governments target of 3.5
percent inflation in 2014.
In China, the most important components of the CPI basket are Food (31.8 percent of total
weight) and Residence (17.2 percent). Recreation, Education and Culture Articles account for
13.8 percent; Transportation and Communication for 10 percent, Healthcare and Personal
Articles for 9.6 percent, Clothing for 8.5 percent; Households Facilities, Articles and Services for
5.6 percent; Tobacco, Liquor and Articles for the remaining 3.5 percent. The CPI basket is
reviewed every five years on the basis of household surveys. Revisions reflect new spending
patterns and economic development, according to the National Bureau of Statistics.
Calendar GMT Countr
y
Event Referenc
e
Actua
l
Previou
s
Consensu
s
Forecas
t
2014-01-
09
01:30
AM
China Inflatio
n Rate
YoY
Dec
2013
2.5% 3% 2.7% 3.25%
2014-02-
14
01:30
AM
China Inflatio
n Rate
YoY
Jan 2014 2.5% 2.5% 2.4% 3.27%
2014-03-
09
01:30
AM
China Inflatio
n Rate
YoY
Feb 2014 2.0% 2.5% 2.0% 2.4%
2014-04-
11
02:30
AM
China Inflatio
n Rate
YoY
Mar
2014
2.4% 2.0% 2.5% 2.25%
2014-05-
09
02:30
AM
China Inflatio
n Rate
Apr 2014

2.4% 2.1% 2.48%
YoY
2014-06-
10
01:30
AM
China Inflatio
n Rate
YoY
May
2014

2.33%

Prices Last Previou
s
Highes
t
Lowes
t
Forecas
t
Unit
Consume
r Price
Index
(CPI)
102.4
0
2014/Ma
r
102.00 128.40 97.80 102.25 2014/Ap
r
Index
Points
[+
]
Core
Consume
r Prices
101.7
0
2014/Ma
r
101.70 102.50 98.40 101.85 2014/Ap
r
Index
Points
[+
]
Core
Inflation
Rate
1.70 2014/Ma
r
1.70 2.50 -1.60 1.83 2014/Ap
r
Percen
t
[+
]
Export
Prices
99.20 2014/Feb 98.70 111.90 90.70 99.21 2014/Ma
r
Index
Points
[+
]
GDP
Deflator
588.2
1
2012/Jun 576.71 588.21 100.00 589.52 2012/De
c
Index
Points
[+
]
Import
Prices
93.20 2014/Feb 97.40 122.70 79.60 92.55 2014/Ma
r
Index
Points
[+
]
Inflation
Rate
Mom
-0.50 2014/Ma
r
0.50 2.60 -1.80 -0.42 2014/Ap
r
Percen
t
[+
]
Producer
Prices
97.70 2014/Ma
r
98.00 113.47 91.80 97.69 2014/Ap
r
Index
Points
[+
]
Producer -2.30 2014/Ma -2.00 13.47 -8.20 -1.37 2014/Ap Percen [+
Prices
Change
r r t ]
Inflation
Rate
2.40 2014/Ma
r
2.00 28.40 -2.20 2.48 2014/Ap
r
Percen
t
[+
]


Current inflation China - this page features an overview of current inflation in China. Following
inflation rates are available for China: Current inflation China (CPI China) the inflation is
based upon the Chinese consumer price index. The index is a measure of the average price which
consumers spend on a market-based "basket" of goods and services. Inflation based upon the
consumer price index (CPI) is the main inflation indicator in most countries. We suggest to use
the links underneath the current inflation rate, in case you are interested in more extensive
information on the development of the current or historic inflation in China.












INTEREST OF CHINA
The benchmark interest rate in China was last recorded at 6 percent. Interest Rate in China
averaged 6.42 Percent from 1996 until 2014, reaching an all time high of 10.98 Percent in June
of 1996 and a record low of 5.31 Percent in February of 2002.

China Cuts Reserve Ratio for Rural Banks

The People's Bank of China decided to cut the reserve requirement ratio by 2 percentage points
for rural commercial banks and by 0.5 percentage point for rural credit cooperatives, aiming to
stimulate growth in some parts of the country. The cut will be effective from April 25th, 2014.
The move intends to promote greater support for agriculture, as rural banks will have more cash
available for lending. However, the central bank said the reserve cut will not affect the overall
liquidity of the banking system. The Government had first announced the cut last week but no
details were given. The last time the central bank cut the reserve requirement ratio for the
banking sector as a whole was in May of 2012, when it trimmed the ratio by 50 bps to 20 percent
for most large banks.
In China, interest rates decisions are taken by The Peoples' Bank of China Monetary Policy
Committee. The PBC administers two different benchmark interest rates: one year lending and
one year deposit rate.
Money Last Previous Highest Lowes
t
Forecast Unit
Banks
Balanc
e Sheet
1050.00 2014/M
ar
644.50 1890.00 -32.10 808.21 2014/A
pr
CNY
Billion
[+
]
Central
Bank
Balanc
e Sheet
325019.
77
2014/F
eb
331181.
51
331181.
51
34443.
90
324256.
52
2014/F
eb
CNY
Hundre
d
Million
s
[+
]
Foreig
n
Exchan
ge
Reserv
es
3950000
.00
2014/M
ar
3820000
.00
3950000
.00
2262.0
0
4001951
.21
2014/A
pr
USD
Million
[+
]
Interba
nk
Rate
4.30 2014/M
ay
4.30 9.89 0.00 5.25 2014/M
ay
Percent [+
]
Loan
Growt
h
13.70 2014/M
ar
13.90 34.74 10.60 13.38 2014/A
pr
Percent [+
]
Loans
To
Private
Sector
135479.
19
2014/M
ar
133038.
25
135479.
19
59105.
90
137215.
20
2014/A
pr
Hundre
ds
CNY
Million
[+
]
Money 5830.00 2014/M 6230.00 7650.00 17.85 5973.30 2014/A CNY [+
Supply
M0
ar pr Billion ]
Money
Supply
M1
32770.0
0
2014/M
ar
31660.0
0
33726.0
6
74.51 32504.7
0
2014/A
pr
CNY
Billion
[+
]
Money
Supply
M2
116070.
00
2014/M
ar
113180.
00
116070.
00
5840.1
0
116413.
40
2014/A
pr
CNY
Billion
[+
]
Interest
Rate
6.00 2014/A
pr
6.00 10.98 5.31 6.00 2014/M
ay
Percent [+
]

MONETARY POLICY OF CHINA
Chinas monetary policy in 2013 can be described as a moderate tightening. The Peoples Bank
of China (PBOC), Chinas central bank, provided enough credit and money to support steady
growth of the real economy while alert against liquidity expansion. There was no adjustment to
the required reserve ratio or benchmark interest rate, and open market operations were pursued
with caution. The mismatch between money crunch at the micro level and adequate liquidity at
the macro level, a major challenge facing the PBOC in 2013, is likely to persist in the year
ahead.
The Central Economic Work Conference set a prudent tone for monetary policy in 2014. Credit
and money supply is expected to return to normal, liquidity will be kept at an appropriate level,
and systemic or regional risks will be watched closely. Thus, the major tasks of the PBOC in
2014 include pressing ahead with deleveraging, curbing the excessive expansion of local
government financing vehicles (LGFVs), guarding against real estate bubbles and rolling out
financial sector reform.
Although the policy outlook is stable and manageable, there is an undercurrent of local
government overinvestment just beneath the surface. Despite central government efforts to
downplay GDP growth and remove it from the assessment criteria of local officials, it is quite
unlikely for them to get promotion in the absence of robust economic performance. What is
more, local government investment is often fuelled by greed for lucrative personal gains. The
surge in revenue from land sales in 2013, totalling three trillion yuan, reflected how powerful
such incentives could be.

As for credit and money markets, last years capital squeeze is unlikely to be thoroughly
prevented due to the dual-track market under credit regulation and excessive financing thirst on
the part of local governments, hence the probability of recurring liquidity shortages in the
months ahead. It is reported that the China Banking Regulatory Commission will soon unveil
rules for regulating inter-bank financing. The market is watching this very closely. If the report is
true, the rules will be a further blow to non-standard banking assets. On the other hand, despite
the fact that the new rules will reduce the chances of future money crunches, they will most
certainly aggravate capital shortages experienced by small and med-sized banks. They will also
mean that banks will have less profit to make.

On the supply side of the market, the soundness of the monetary policy arises partly from the fact
that the market is under regulation. So long as the lending rates are not liberalized and
benchmark rates not transformed, tension will remain high in the dual-track credit market. On the
demand side, the two main destinations for capital flow continue to be hollow holes. Although
LGFVs are singled out for rectification, it will only improve their legality rather than dampen
obsession with them. In fact, the rectification may on the contrary heighten local thirst for
money. Meanwhile, recent policies have, if anything, increased profit margins in the real estate
sector. There is a greater expectation for speculative investment, driving up credit demand that
relies on bank borrowing. So long as home prices continue to surge, credit demand in the
housing sector will grow rather than weaken. If the abovementioned two hollow holes (local
financing & home loans) are not plugged, a credit squeeze can be expected in 2014 and overall
financing costs will go up. To stave off such risks, monetary policy needs to be prudent
bordering on tight.

The PBOC will also focus on a stable RMB in 2014. The recent market-oriented reform of the
exchange rate regime seems to herald a new round of appreciation. Both the central parity rate
and spot rate of the RMB against the US dollar reached all-time highs in 2013: the yuan
appreciated almost 3% against the dollar, much faster than in previous years, leading to a
substantial increase in arbitrage transactions. However, the rapid strengthening of the yuan is
more likely to reverse than continue in 2014.

Still, two major developments may be expected. As reform deepens, one-way appreciation may
come to an end and the RMB will enter the new territory of two-way floating, though within a
band of no more than 3%. The other development to watch is how US tapering of its
unconventional monetary policy will impact China, especially its exchange rate. Should there be
a massive capital outflow as a result of the taper, China will see a slump in the RMB equivalent
of foreign exchange holdings, which will have a significant impact on the base currency.
Domestic liquidity will be seriously affected and the value of RMB may be weakened. How the
PBOC will respond to this scenario and adjust its monetary policy remains to be seen.

In sum, despite the general tone of a prudent monetary policy in 2014, the PBOC will face
considerable uncertainty and many dilemmas. It will be a delicate balancing act for it to pursue
multiple policy goals in the unpredictable economic environment.






REFERENCES
1. http://www.inflation.eu/inflation-rates/china/inflation-china.aspx#sthash.amqtIkR2.dpuf
2. www.tradingeconomics.com/china/gdp
3. https://www.princeton.edu/~gchow/Chow-Shen%20macropape1104.pdf
4. chinalabourmarket.com/
5. en.wikipedia.org/wiki/EconomyofChina
6. www.tradingeconomics.com/china/inflation-cpi




















TABLE CONTENTS

TITLE CONTENT PAGE CONTENT
Acknowledgement
GDP of China
Price level of China
Labor market of China
Growth of the economy China
Unemployement Rate China
Inflation China
Interest Rate of China
Monetary Policy in China
References

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