The rise of the Chinese economy over the past twenty years has been meteoric and its influence on the world economy has also increased during this time. Analyzing these changes through statistics and graphs is an interesting and beneficial exercise.

3.3

This trend in consumption has a very positive and significant effect on the GDP of china. The rise in consumption fuels the rise in GDP and vice versa. As the Chinese economy grew over the past two decades the Chinese people, especially the expanding middle class, became bigger consumers. This helps to explain the huge increase in consumption.

4.1

4.2

Foreign investment in the Chinese economy increased dramatically during the 1990s, growing form US$ 2.5 billion in 1990, to US$ 46 billion in 2002. This dramatic increase signifies the efforts of international businesses to gain access into the enormous Chinese economy. The graph also illustrates just how open to foreign investment the Chinese Government became during this decade.  Foreign direct investment into China continued to grow during the following decade but as the graph illustrates decline sharply in 2007. This is a direct consequence of the global recession and credit crunch that shook the world for the latter years of the 2000s.

4.3

The rise in foreign direct investment in China matches the rise in Chinese GDP, and the decrease in investment during the recession is also represented in a small decline in Chinese GDP during the same period. Investment in China has been one of the crucial factors in Chinas terrific economic success over the past twenty years. American and European companies have bought technology, employment, know-how and tax revenue to China, and this in turn has helped fuel Chinas rapidly advancing GDP.

5.1

        

5.2

Like all the above graphs this graph shows an upward curve in government expenditure over the last twenty years. As the Chinese economy grew the Chinese government quickly accumulated more revenue and in order to facilitate more foreign investment embarked on many capital spending projects such as infrastructure. The rise in government expenditure is steady until 2002 when it begins to increase dramatically. By 2002, the Chinese economic miracle was well and truly established and the government was injecting more and more cash back into the economy. The Beijing Olympics of 2008 is a significant factor in the sharp increase in Chinese government expenditure over the last eight years. Having been awarded the Olympics in 2001 the Chinese government embarked on a number of huge projects, spending billions of dollars on transport, infrastructure and sporting stadiums.  This is only one factor in the huge increase.

5.3

Chinese government expenditure, having increased like consumption and investment over the past twenty years, has helped in driving Chinas GDP increase. As the government spends more money, the benefits trickle across all sectors of economy and society.  Wages and social welfare are then spent across the wider Chinese economy and as a result the government benefits with increased tax revenues.

6.1

6.2

The graphs illustrating Chinese imports and exports follow an almost identical trajectory. As The Chinese economy grew throughout the nineties so to did the need to import more goods and services. As the Chinese economic miracle really took hold over the past ten years the reliance on imports, in particular, energy products increased significantly.  The above graph represents this. Like imports, exports have also seen huge increases over the past twenty years. As more and more industry invested in China to avail of the low manufacturing costs, Chinese made products began being exported in vast quantities.  Nowadays, it is not just foreign firms exporting Chinese products. Chinese grown industries have also developed significantly and account for major portion of Chinese exports. Even though the graphs follow a very similar pattern, the figures involved are crucially different. In every year used in the graph, Chinese exports have exceeded Chinese imports. This is a crucial fact and one, which gives China a trade surplus. This has a positive affect on the balance of payments and in turn the economy.

6.3

As mentioned above, when exports are greater than imports the Chinese economy benefits. The government can now spend more money on wages, welfare and investment projects. This in turn benefits the wider economy and has a positive effect on GDP.

7.1

To summarize, all aspects of the Chinese economy have seen huge increases over the past twenty years. Consumption, investment, expenditure and exports are all up and this is clearly reflected in Chinas ever increasing GDP, which now stands at an impressive US$ 4.9 trillion.  Chinas economy has gone form being weak and under developed to strong ever expanding. For this to have occurred a number of components were needed including high investment and a positive trade surplus. As the above graphs and tables illustrates those components were present in the Chinese economy in the last twenty years. This is why the Chinese economy has been so successful in this time.

Bibliography:

World Bank, China.

Wall Street Journal.

http://online.wsj.com/article/SB10001424052748703720504575376712353150310.html

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