Economy and Trade
The PRC National Bureau of Statistics (NBS) revised China's GDP growth rates for the 1993-2004 period after analyzing the results of its first National Economic Census. Annual growth averaged 9.8 percent during the period, nearly 0.5 percentage points higher than previously calculated.
NBS also revised provincial GDP figures. The 2004 GDPs of Fujian, Hebei, Henan, Shandong, and other provinces were revised downward, while those of Beijing, Guangdong, Shanghai, and Zhejiang, among others, were adjusted upward. Beijing and Guangdong saw the biggest increases, ¥178 billion ($22 billion) and ¥283 billion ($35 billion), respectively.
China's economy grew by 9.9 percent, and its GDP totaled nearly $2.2 trillion in 2005, according to NBS. China has overtaken France and the United Kingdom as the world's fourth-largest economy.
China's foreign trade totaled $1.4 trillion in 2005, up 23 percent from 2004, according to NBS. With imports growing more slowly than exports, China's trade surplus last year hit nearly $102 billion, up from roughly $70 billion in 2004.
Intellectual Property
In a landmark case for intellectual property rights (IPR) in China, a Beijing court in December 2005 ordered the landlord of the Beijing Silk Street Market to pay compensation to owners of several luxury brands, including Burberry, Chanel, Gucci, LMVH, and Prada. As the CBR went to press, the landlord, Beijing, Haosen Clothing Co. Ltd., had, however, appealed the verdict (see the CBR, January-February 2006, p.16).
In an apparent attempt to alleviate foreign concerns about China's commitment to protecting IPR, China's interagency IPR Protection Working Group announced in early February that it had investigated roughly 22,000 trademark and 3,000 patent cases and confiscated 225 million pirated audiovisual materials in 2005.
Around the same time, the United States and China appeared to be at an impasse over the US request filed with the World Trade Organization asking that China provide more information on its enforcement of IPR.
Banking & Finance
The China Banking Regulatory Commission reported that the average nonperforming loan ratio of major domestic banks dropped to 8.9 percent in 2005, down from 17.2 percent in 2003. This marks the first time that the ratio has dropped below 10 percent.
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According to a survey by the Central University of Finance and Economics, underground credit in China totals around ¥800 billion ($99 billion), which is equivalent to 28 percent of funds raised through formal channels. The survey, which covered 20 provinces, provides the first systematic estimate of underground finance in China.
As of early February, China UnionPay cards may be used in more than 20 countries outside of China, including Australia, France, Germany, Japan, Singapore, and the United States. According to officials at the People's Bank of China, making Chinese bank cards acceptable overseas will facilitate the development of China's bank-card industry.
Public Health & Safety
City firefighters in China have only about 80 percent of the fire hydrants and two-thirds of the communications equipment they need, the Ministry of Public Security revealed recently. Conditions are worse in rural areas, where 80 percent of villages and townships lack professional firefighting squads. Fires killed about 2,500 people and damaged ¥1.36 billion ($168.7 million) worth of property in 2005.
China revised downward the estimated number of individuals with HIV/AIDS to 650,000, following a joint study by the PRC Ministry of Health, the World Health Organization, and the Joint UN Program on HIV/AIDS. In 2003, the estimated number was 840,000.
China has 21,000 chemical plants along its rivers and coastlines, according to the PRC State Environmental Protection Administration (SEPA), with roughly half located along either the Yangzi or Yellow rivers. SEPA launched the national count shortly after New Year, following the benzene spill that disrupted water supplies in Harbin, Heilongjiang, in November (see Last Page).
Consumers
A recent survey report by McKinsey & Co. confirms the notion that the lack of a robust social safety net in China accounts for the country's high savings rate. Half of the survey's respondents said that they saved money primarily for medical expenses, and 43 percent cited retirement.
The same survey also reveals that 43 percent of respondents agreed that "having a private car is my biggest dream," though only 2 percent planned to buy a car in the next year.
According to the China Automotive Industry Association, China surpassed Japan to become the second-largest auto market in the world in 2005, with sales of 5.92 million units. The United States remains the largest auto market in the world.
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Hotpot may soon become a more popular dish in the United States. The Inner Mongolia-based Little Sheep Food & Beverage Chain Co. Ltd. said it opened a branch in San Francisco, CA, in early February. Launched in 1999, the famous Chinese hotpot company operates more than 700 restaurants in Canada, China, Hong Kong, and Singapore.
Politics and Society
China witnessed 87,000 social unrest incidents in 2005, up 6 percent from 2004 and 50 percent from 2003, according to the PRC Ministry of Public Security. Analysts note that land seizures, corruption, and environmental degradation are key causes of protests and demonstrations.
The PRC National Development and Reform Commission said in early February that China's urban income inequality had grown to an "alarming and unreasonable level." According to a survey of nearly 6,000 families in 20 cities across China, the bottom 20 percent in China's cities receives only 2.75 percent of China's total urban income, or only about 4.6 percent of the income of China's top 20 percent urban residents.
In an effort to demonstrate concern about the welfare of China's peasants, PRC President Hu Jintao and Premier Wen Jiabao visited the poor on Chinese New Year Eve. Hu joined farmers in Shaanxi in folk dancing and the making of sticky rice cakes, a traditional New Year's treat. Wen visited villagers in Shandong.
Regional News
Shanghai overtook Singapore to become the world's top cargo port in terms of throughput in 2005. The Shanghai city government reported total cargo throughput at 443 million tons, up nearly 17 percent from 2004 and 21 million tons more than Singapore.
Beijing dropped its goal of capping its population at 16 million by 2010. The target will instead be 18 million by 2020, according to the Beijing Municipal Development and Reform Commission. Officials said that the tremendous population growth of nearly 12 percent over the last five years had made the original goal unrealistic.
Advertising
Advertising spending in China rose 21 percent in 2005 to $37 billion, according to Nielsen Media Research. China is now the third-largest overall advertising market in the world, after the United States and Japan.
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