China's economy

Main article: China

GDP

Main article: China's GDP

Largest entrepreneurs

Main article: China's richest people

Largest companies

As from 2008 to 2019, sales of Chinese companies grew in the ranking of the 500 largest companies in the world of Fortune500.

Financial system

Sovereign Wealth Fund

2023: Assets of China's two sovereign wealth funds Aktivs $2.385 trillion

2022: Sovereign wealth fund assets per capita

Modern monetary theory

Main article: Modern Monetary Theory (SDT)

The financial policy of the country corresponds to the Modern Monetary Theory (SDT).

People's Bank

Main article: People's Bank of China

Gold and foreign exchange reserves

Main article: Gold and foreign exchange reserves of China

Total debt

Non-financial debt

2023:308% OF GDP

The total non-financial debt China in the second quarter of 2023 reached astronomical indicators - 308% from, GDP doubling in 15 years.

The debt burden in China is much higher than in South Korea - 273%, the United States - 253%, the Eurozone - 240%, Britain - 237% and Australia - 220%. At the level of China, Canada stands among large countries - 307%, and Japan is expected to be ahead of the planet - 414%.

Over the past 15 years, the trend has been growing, with the exception of Germany, Spain, Holland and Austria.

Compared to 2019, the largest degradation in debt burden growth relative to GDP is observed in:

• China - plus 44 pp from 264 to 308%,
• South Korea and Singapore - plus 41.3 pp,
• Thailand - plus 41 pp,
• Japan - plus 35pp and
• India - plus 26p

It turns out that Asian countries are most credited, while Western countries are holding back their debt rush. For example, the United States practically did not change the debt burden in 2q23 compared to 2q19 - plus 2.5 percentage points from 250 to 252.5%, the Eurozone countries even reduced by 18.7 percentage points, Britain sharply reduced by 31.6 percentage points, in the stage of compression Canada - 0.4 percentage points and Australia - 14.1 percentage points

This is fully due to the actions of the private sector (corporations plus the population), while states are increasing obligations at a record pace.

The decline in private sector liabilities is due to unacceptably high rates.

Since 2023, the situation with corporate debts has become a little better in terms of demand, but rates eat up all the margins.

In 2024, the world fits with huge debts, high rates and with almost complete exhaustion of the safety margin.

2022

Total non-financial debt - 290% of GDP

Record rates of debt growth to 292% of GDP

One of the main vulnerabilities of China is the increase in debt at a rate significantly exceeding the ability of the economy to digest its obligations.

The price of the COVID-19 crisis for China is $16.5 trillion in debt momentum from December 2019 to March 2022. There is no comparable analogue in the world.

All US debt madness for this period is $10.3 trillion, in the Eurozone countries - $3.1 trillion (3.2 trillion euros), in Japan - minus $716 billion due to the weakening of the yen (172 trillion yen increase in national currency), in Britain - plus $600 billion (495 billion pounds).

Interestingly, if we unite all countries unfriendly to Russia, then from December 2019 to March 2022 the total increase in debt is 16.2 trillion, which is comparable to China alone, the Spydell Finance channel noted.

Before the financial crisis of 2008, China's non-financial debt was 5.7 trillion, 10 years ago (in 2012) non-financial debt grew 2.5 times to 14.5 trillion, 5 years ago doubling to 28 trillion, at the beginning of Q2 2022, China's non-financial debt amounts to 53.6 trillion dollars, i.e. again almost doubling. An almost 10-fold increase since 2008 is significant.

This is not Bangladesh or Vietnam on a low base with a limited financial system capacity. China is growing at an extremely high base. What is to create over 25 trillion non-financial debt over 5 years?

Non-financial debt consists of credit instruments issued by government agencies, households and businesses that are not included in the financial sector.

Japan's entire accumulated debt in history is only $19 trillion (this is at a yen rate of 115). China is creating a new Japan in 4 years. The entire Eurozone is a "miserable" 37 trillion, which China has issued in 9 years. Critical over-credited Britain holds about 9 trillion of debt, and the United States has 65 trillion of debt on the balance sheet.

At this rate, China will become the most over-credited country in the world by 2024, overtaking the United States.

China's total non-financial debt reached 292% of GDP by the beginning of the second quarter of 2022. Among all major countries of the world, only Japan (425%), France (353%) and Canada (325%) have a larger debt burden.

China has overtaken countries and regions such as the United States (275% of GDP), the Eurozone (273%) and Britain (271%) in terms of debt burden.

However, in terms of the cost of servicing debt relative to the income of economic agents, China overtakes all countries of the world, since the weighted average cost of servicing debt in Japan and France is lower than in China due to lower market and credit rates.

Among of developing countries the most refinanced are (Thailand 232%) and (Malaysia 202%).

Despite China's significant and undeniably outstanding economic success over the past 13-15 years, the debt burden has more than doubled from Q2 2008 (the last pre-crisis quarter before the 2009 financial and economic crisis), moving from 141% of GDP to 292%.

Among all countries of the world, there are no analogues of a faster and larger debt increase than in China. All these endless fiscal stimulus and credit booms in the US have increased the debt burden from 235% to 275% (Q2 2008 to Q1 2022), and in the Eurozone from 22% to 273% of GDP.

Debt for China is becoming a huge problem, because the growth rate of debt is incomparably higher than the ability of the economy to absorb this debt. The system is stabilized by the fact that almost all debt is domestic, distributed among state-controlled financial structures, as in Japan.

However, this does not change the disposition with unacceptable debt servicing costs, which suppresses economic activity and increases the risk of defaults/bankruptcies.

National debt

Main article: State Debt of China

External debt

2023: Debt rises to $2.45 trillion

China's external debt at the end of 2023 amounted to $2.45 trillion. This is evidenced by the data of the State Administration of Foreign Exchange Control (SAFE), published at the end of March 2024.

According to Interfax, referring to the published statistics, medium and long-term debt accounted for about 44% of the total debt. At the same time, 47% of external debt was nominated in yuan.

China's foreign debt at the end of 2023 amounted to $2.45 trillion

The national debt of the central government of China at the end of 2023 reached a record $4.2 trillion. This is almost 12% more than in the previous year. The debt of the central government amounted to 30.03 trillion yuan ($4.244 trillion), or about a quarter of the country's GDP. China's public debt has been growing since at least 2005, when it was about $400 billion.

The SAFE report notes that as of the end of 2023, China's external financial assets reached $9581.7 billion, external financial liabilities - $6673.5 billion. At the same time, net external assets are estimated at $2908.2 billion.

According to RIA Novosti, the total amount of outstanding debt of local governments reached 40.737 trillion yuan ($5.63 trillion at the exchange rate as of April 1, 2024), including 15.869 trillion yuan ($2.19 trillion) of ordinary debts and 24.869 trillion yuan ($3.44 trillion) target. According to the National Institute of Finance and Development, the ratio of total leverage in the economy rose to a record 287.8% of GDP in 2023, 13.5% higher than a year earlier.

China's National Institute of Finance and Development is calling for more political support to stimulate demand and growth. According to the institute, if borrowing increases by 10%, and nominal GDP - by 5% in 2024, then the leverage ratio will exceed 300%. The institute recommends setting the nominal GDP growth target at 7%.^[1]

2022: Debt cut by 10.7% to 17.08 trillion yuan

As of the end of 2022, China's outstanding foreign debt was 17.08 trillion yuan, denominated in both national and foreign currencies. This is equivalent to $2.45 trillion, and the decline in relation to 2021 was at the level of 10.7%. The corresponding figures are reflected in the report of the State Monetary Administration of the PRC, published on March 31, 2023.

It is noted that China's medium-term and long-term external debt by the end of 2022 amounted to 7.76 trillion yuan (approximately $1.1 trillion), or about 45% of the total debt. Short-term external debt is estimated at 9.32 trillion yuan (approximately $1.34 trillion), and its share is 55%.

The report states that the outstanding debt of the public administration sector at the end of 2022 amounted to 3.04 trillion yuan ($436.3 billion), or 18% of the total. The debt of the central bank is 567.3 billion yuan ($81.5 billion) - 3%. The debt of other banks is estimated at 7.04 trillion yuan ($1.01trn), which is equivalent to 41%. Outstanding debt of other sectors (including private equity lending) amounted to 6.44 trillion yuan ($924.7 billion), or approximately 38%.

If we consider the currency structure, then the outstanding external debt of the PRC in 2022 in the national currency amounted to 7.63 trillion yuan (about $1.1 billion), which is equivalent to 45% of the total debt. Debt in foreign currency - 9.45 trillion yuan ($1.36 billion) with a share of 55%. Debt in US dollars by the end of 2022 was 85%, in euros - 7%, in Hong Kong dollars - 4%, in yen - 1%, debt in SDR (artificial means of payment) and other foreign currency - 3%. All major indicators of China's external debt were within internationally recognized thresholds, suggesting controlled risks.^[2]

Currency: Yuan

Main article: Chinese Yuan

Restrictions on the movement of capital

For 2023, China has structural features of the financial system and political structure, involving restrictions on capital movements. It is important to understand that the reserve status of the currency cannot arise under conditions of restrictions on the movement of capital.

What does the restricted convertible yuan mean? What does Capital Control mean in China at all?

Most procedures are regulated under the State Administration of Foreign Exchange (SAFE), China Securities Regulatory Commission (CSRC) in coordination with the People's Bank of China, central and regional authorities.

• Limits on currency exchange within the framework of annual quotas for the conversion of yuan into foreign currency for foreign investors, which differ depending on the region and investment areas.

• Profit withdrawal limits under restrictions on capital repatriation through dividends and interest.

• Industry capital withdrawal quotas for sensitive industries that change depending on the political and economic situation, which requires special permits and licenses.

• Control of international financial transactions, in which China can extraordinary request information about transactions, which in fact means the legitimization of manual control, which strongly binds foreign investment to the political and economic situation.

• Stricter requirements for registration of foreign companies within the framework of special permits of the authorities, and foreign business may face restrictions on ownership of property within the framework of the maximum share of participation and nuances of corporate governance (admission of representatives of the Chinese establishment to management).

• An extremely unfriendly infrastructure for foreign investors, requiring direct participation in the Chinese economy, which actually cuts off any form of non-institutional portfolio investment.

• Portfolio investments in China are regulated under the QFII quotas of 2002 and RQFII of 2011 and impose a lot of restrictions, which cuts off unskilled participants from the market, but even among qualified ones, such a policy greatly limits the attractiveness of investment in China.

Foreign investment cannot be generated under restrictions on capital movements, which implies non-competitive conditions and unregulated, unpredictable risks of freezing investments indefinitely, when political and infrastructure factors prevail over economic ones, Spydell Finance wrote. It is necessary to withdraw, and not give - who will get involved in this?

Free capital movement assumes that the logic of capital movement is competitive in terms of risk/return, where capital is redistributed from industries and financial instruments with perceived lower returns and/or higher risks to an area with lower risks and better returns/growth prospects, rather than at the direction of the authorities (what can and cannot be inferred).

Current account

2023: Record current account surplus and reduced investment abroad balance foreign investment outflow amid conflict in Ukraine and tensions in Taiwan

How does China balance the foreign exchange market in the face of a large-scale outflow of foreign capital?

In the modern history of China (from 1990 to 2023) there were only two severe stress tests of the currency system: 2015-2016 and 2022-2023.

For the first time, capital outflows from China were not associated with a revaluation of the long-term prospects for cooperation, because direct investments were going almost at the same pace, there was a slight fixation in portfolio investments, and outflows were associated with the closure of external monetary transactions with China.

In 2015-2016, China balanced gaps in the balance of payments through an aggressive discharge of gold reserves, the implementation of which reached almost 900 billion from 3Q14 to 1Q17.

Since 2022, the problem has become global, because it affects all aspects of investment in China (direct, portfolio and other investments).

How did China manage to stay after the reversal of non-residents?

First of all, this is a record current account surplus (STO), which in 2022-2023 reached 0.7 trillion compared to 0.6 trillion in 2020-2021 and only 0.12 trillion in 2018-2019.

A record surplus was recorded in 3Q21 - 151 billion per quarter, and from 2Q23 to 4Q23, the STO surplus averages 59 billion - this is a good indicator, i.e. the average quarterly surplus from 2010 to 2019 was only 44 billion.

When expanding the deficit in primary income (from 12 billion in 2017-2019 to 38 billion in the quarter in 2022-2023), associated with the differential of interest rates, profitability and negative international investment in direct investment, the STO surplus is supported by the trade balance.

In 2022-2023, the average quarterly trade surplus is 120 billion vs 102 billion in 2020-2021 and 27 billion in 2018-2019.

The second balance of payments balance is a sharp and record reduction in China's other investments in the outside world by almost 200 billion in 2022-2023 compared to an increase of 750 billion in 2020-2021 and + 200 billion in 2018-2019.

China has moved from active financial expansion to a restrained policy, with this it is difficult to achieve the dominance of the yuan, Spydell Finance wrote.

Inflation

Main article: Inflation in China

Budget

2023: Rising budget deficit amid slowing economy

In 2023, a very significant degradation of the budget continues in China, which has a record deficit of an average of 7.6% of GDP for the period 2020-2023 compared to 3% for the period from the beginning of 2013 to 2019, and this is against the background of a significant slowdown in the economy.

2022: Record 8.96 trillion yuan budget deficit

China's budget deficit widened to a record high of 8.96 trillion yuan in 2022, according to Finance Ministry data. The deficit exceeded the previous record of 8.72 trillion yuan in 2020, when the economy was hit by the first outbreak of Covid-19, and was 51% higher than in 2021.

Earlier it was reported that the budget deficit in China is approaching a record mark of $1 trillion amid a slowdown in growth. The deficit in the first nine months of 2022 is almost three times larger than in 2021. It grew due to falling land sales, tax breaks and other falling government revenues.

Banks and lending

Main article: Banks and lending in China

Stock market

Main article: China stock market

Investments

Venture capital investment in China

• Venture capital investment in China

Foreign investment

Main article: Foreign investment in China

Gold market

Main article: Gold (China market)

Investments in other countries

Main article: China's investments in the countries of the world

China Electronic Payment Systems

2020:67% of Internet users prefer cashless payment

Foreign trade

Main article: China's Foreign Trade

Information Technology and Telecommunications

• China IT Market
• China's digital economy
• Data centers in China

• Communications (China Market)
• Internet of Things in China
• The development of 5G in China
• Smartphones (China Market)
• Computer and Video Games (China Market)

Minerals

Main article: Mining in China

Energy carriers

Oil and gas production in China

Main article: Oil and gas production in China

2024: Iran oil imports fall to below 1m barrels per day

In January 2024, Iranian oil exports to China fell to the lowest level in 11 months - Kpler. Deliveries fell below 1 million barrels per day. The decline followed disagreements over oil prices.

2023

China increased gas consumption by 8% and regained the title of the world's largest buyer of LNG

In 2023, China regained the title of the world's largest buyer of liquefied natural gas.

Plan to limit oil refining to 20 million barrels per day

In October 2023, it was announced that China would limit crude oil processing capacity to 1 billion metric tons, or 20 million barrels per day (bpd) by 2025, to optimize its vast refining sector and limit carbon dioxide emissions.

The National Development and Reform Commission (NDRC) said it would limit the commissioning of new refining capacity, promote refinery upgrades and optimisation, and accelerate the closure of small and outdated facilities.

By 2025, 55% of processing capacity will come from refineries with an annual capacity of 10 million tons or more, and all new plants will have to have a capacity of at least 10 million tons per year.

China turns to Australian and Russian coal to improve its own fuel quality

By September 2023, the increase in supplies comes amid a government push to avoid power shortages that have been crippling the country's economy in recent years. China's desire to extract more coal has led to a deterioration in the quality of coal mined.

Forecasts for imports suggest a significant increase in 2023.

China buys more than 90% in oil exports from Iran

Imports of Iranian oil to China in August 2023 are at their highest level in a decade as rising global prices boost the appeal of discounted crude, according to data analytics firm Kpler.

According to the company's estimates, in August the world's largest oil importer will receive about 1.5 million barrels per day from Iran.

By April 2023, private refiners in China, the largest oil importer, are acquiring more Iranian oil amid growing competition for supplies from Russia.

Record oil supplies from Russia to China

The flow of Russian oil to China by mid-February 2023 reached the highest level since the outbreak of the conflict in Ukraine, the resumption of work of the world's largest importer of energy resources is gaining pace.

China's "oil diet" has changed: the country imports more Russian oil, and takes less from Angola and Venezuela.

Angola is now among the hardest hit, with daily exports to China falling 27% this month from February last year, according to data firm Kpler. Flows from Venezuela, Nigeria and Britain also declined. Sellers of long-term contracts like Saudi Arabia are doing better.

2022

Russia ranked second in oil supplies to China

Russia in 2022 took second place in oil supplies to China (86.25 million tons of oil). On the first - Saudi Arabia (87.49 million tons).

China is Turkmenistan's biggest gas buyer

Record energy purchases in Russia

In June 2022, China spent 72% more on the purchase of Russian energy resources than a year earlier - spending on these goods in June rose to $6.4 billion.

Thus, China's total spending on Russian energy after the outbreak of the crisis in Ukraine from March to June amounted to $25.3 billion, which is almost double the $13.5 billion spent in the same four months of 2021.

2021: China's biggest coal consumer from Russia

For 2021 Russia , it sends most of its coal to Asia, as it Europe avoids this fuel.

2020: Oil grades consumed

Among the oil varieties that are traditionally supplied to the PRC refinery for 2020:

• Djeno of the Republic of Congo,
• Oman from the eponymous OPEC country and
• Brazilian brand Lula.

2018: Petrol price

Power

Main article: Power in China

Labour market and unemployment

Main article: China's labor market and unemployment

Retail

2024

2023

The volume of online trade in China for the year grew by 11% and exceeded 15 trillion yuan

In 2023, the volume of the Chinese e-commerce market amounted to about 15.4 trillion yuan (approximately $2.12 trillion). This is 11% more than the previous year. Such data are reflected in the report of the Ministry of Commerce of the PRC, published in mid-January 2024.

China is the world's largest online trading market. The total volume of cross-border e-commerce in China in 2023 reached 23.8 trillion yuan (approximately $3.28 trillion), showing an increase of 15.6% compared to the previous year. China's e-commerce market is evolving with major digital platforms such as Tmall, JD.com and Pinduoduo. These sites offer a wide range of goods and services, as well as various methods of payment and delivery. In China, mobile shopping applications are widespread, which are actively used by young people.

Online sales in China exceeded 15 trillion yuan, growth - 11%

Statista estimates that the number of online shoppers in China has been growing steadily since at least 2013, when it was estimated at 301.89 million. According to published data, in 2017 the figure exceeded half a billion, amounting to 533.32 million consumers. The most significant jump was recorded in 2020 - against the backdrop of the COVID-19 pandemic: the number of users of online stores and marketplaces rose to 782.41 million against 638.82 million as of the first half of 2019. And by the end of 2023, the value increased to 914.95 million people.

Various e-commerce models are used in China, including V2V (Business for Business), V2S (Business for Consumer), S2S (Consumer for Consumer), etc. Among the significant players in the Chinese online retail market are Kaola, Little Red Book (Xiaohongshu), Alibaba, Suning, Dianping, Gome, Vipshop, Yihaodian, Dangdang, Mogujie and JuMei.^[3]

Forecast for sharp growth in retail sales after restrictions during COVID-19 quarantine did not materialize

It was assumed that after squeezed consumer demand and record accumulated savings of Chinese households in the spring of 2023, the strongest economic impetus will occur, but the reality turned out to be different.

Luxury shoppers opt to shop in China

In the spring of 2023, high-spending Chinese buyers are returning, to the relief of the global luxury industry. But after the COVID-19 pandemic, they are increasingly spending at home, even when the borders of the mainland are open again - and the consequences for foreign destinations and brands that once relied on deep Chinese pockets can be deplorable.

2021

45.3% of total retail sales are online

2020: Online sales share 25%

Agriculture

Main article: Agriculture in China

R&D

Main article: Research and development in China

Transport

Main article: Transport in China

Astronautics

Main article: Cosmonautics of China

Real estate

Main article: Real estate in China

Industrial production

2022: April industrial production slump by 2.9% amid COVID-19 pandemic

In April 2022, industrial production in China fell by 2.9% amid restrictions related to the wave of COVID-19 diseases.

2021:322 robots for 10,000 employees

Metallurgy

Main article: Metallurgy in China

Electronics manufacturing

2022: Reduced market share in smartphone manufacturing

Medical equipment

Main Article: Medical Equipment (China Market)

Light industry

2023: China slashed cotton production but remained the market leader

In 2023, cotton production in China amounted to approximately 5.618 million tons. This is 6.1% less than the previous year. Such figures are given in a study by the National Bureau of Statistics of the PRC, the results of which were published on December 25, 2023.

Despite the reduction in cotton production in 2023, China remains the leader of the corresponding market with a share of more than 20%. The decline is explained by unfavorable weather conditions: these are lower temperatures and significant rainfall during the spring period, as well as prolonged heat during the summer months. In addition, the total area of ​ ​ cotton fields in China in 2023 decreased by about 7.1% - to 2.79 million hectares. At the same time, the national average yield per hectare rose on an annualized basis by 1.1%.

The State Council of the People's Republic of China reports that a slight decrease in production per hectare was recorded in the Xinjiang Uygur Autonomous Region, the country's largest cotton-growing region. On the other hand, yields in the Yangtze River basin and in sowing areas along the Yellow River have increased compared to 2022 - also due to improved management.

It is noted that the Chinese authorities are striving for high-quality development of the cotton industry, and progress is being made on this front. Fields that are considered not the best for growing cotton are transferred to other crops. Beijing, on the other hand, has stepped up efforts to boost grain production amid concerns about food security. As a result, the cultivated areas are adjusted for various crops. In addition, the reduction in cotton fields is in line with the global trend: farmers prefer to develop other areas due to a decrease in cotton sales profits.^[4]

2021: China produces 47% of global apparel

In 2021 China , almost half (47%) of global clothing was produced in - and this is despite the collapse due to the shutdown of production in pandemic 2020, supply chain failures in 2021 and, as a result, attempts by Western partners to reduce dependence on the Asian giant. Experts believe that soon fashion brands from China will appear in. Russia

Alcohol market

2022: 1st in the world in terms of beer production

2021: China is the largest country in the world by beer consumption

2018: Minimum age to purchase alcoholic beverages

Consumption

Cars

Main article: Cars (China market)

2023

31% of household spending goes to food, alcohol and tobacco

Fish consumption is higher than meat consumption

Hong Kong is the world leader in pork meat consumption (55.2 kg), but fish and seafood in Hong Kong are eaten even more (65.8 kg).

2022: Vegetarian share cut to 5.4%

2010: Average annual consumption growth since 2000 - 13%

Business in China

2024

Collapse of the venture capital industry

In just 5 years, the whole industry of venture capital and startups collapsed in China: if in 2018 more than 50 thousand startups were created, then by August 2024 only 260 - respectively, the same thing happened with the amount of funds raised in yuan and in dollars.

Criminal cases against technology companies, capital outflows, weakening economic growth rates are some of the reasons for China's entrepreneurial depression, and accordingly, an obstacle to future innovation.

The most expensive Chinese brands are named. TikTok comes first

TikTok has become the most expensive brand from China. This was announced on May 9, 2024 by the consulting company BrandFinance in its report.

The TikTok brand has risen in price by 28% over the year, to $84.2 billion. In second place in the rating is ICBC, which showed an increase of 3% to $71.8 billion. The 'strongest' brand was recognized by WeChat. He scored 94.3 points out of 100 possible on the Brand Strength Index (BSI).

Haidilao and Luckin Coffee are leading the catering industry among Chinese brands. At the same time, the capitalization of Haidilao decreased by 22% to $3.1 billion, and Luckin Coffee has an increase of 96%, and the company's capitalization amounted to $1.5 billion.

The company also noted a sharp rise in capitalization, BYD China the largest electric car maker in. It is still the only Chinese car brand included in the 2024 ranking. In 2023, BYD beat Tesla in the number of sales of electric cars. The capitalization of BYD for May 2024 is $12.1 billion. A key factor in BYD's expansion is fierce internal competition in the Chinese market, which has led to significant improvements in technology and a change in reputation regarding the quality of its products.

In addition, Brand Finance uses the results of the Global Brand Equity Monitor (GBEM) study to create the Sustainability Perception Index. This research helps to understand how sustainability affects brand perceptions across different sectors. It also gives an idea of ​ ​ which companies, according to global consumers, are most committed to sustainable development.

The Sustainability Perception Index for 2024 shows that among Chinese brands, TikTok has the highest cost of sustainability perception - $9.2 billion.^[5]

Tourism

Main article: Tourism in China

Cluster economy

In China, there are 9 large electrical clusters, each of which in terms of production is larger than the total electrical production of developed countries of the world. Clusters can be roughly divided into three categories^[6]

One of them is state electrotechnical companies operating on state markets, high-voltage networks, industrial enterprises according to the formula "cost + mark-up." These are high-tech industries that do not need to save on materials. Their products - electrical solutions - are in demand by government agencies, despite the cost.

Another type of cluster includes large private companies that are among the top 500 enterprises in the Chinese economy and are listed on the stock exchange. They supply products mainly for a highly competitive domestic construction market and work primarily in the economy segment, but also work for export. The companies of this cluster are growing primarily due to the developed Chinese distribution and the availability of global distribution. These enterprises also work for the industrial market, although they are less focused on it than on the construction market.

The third category is companies that produce both technological and standard solutions for developing countries. Sustained demand for their products correlates with the positive dynamics of emerging economies, which in the last 20 years have been growing faster than the economies of developed countries.

Economic history of China

2017: Cutting off ties with Western countries and the sovereignty of technology with the creation of full-cycle production

Since 2017, a new stage in the development of China has begun. Cutting off technological and commercial ties with Western countries and the sovereignty of technologies with the creation of full-cycle production.

The accumulated industrial potential over 25 years, the trained working class and engineering personnel, the huge domestic sales market and the over-aggressive development of technologies helped to achieve success in this area.

2009: The beginning of the transition from saturation with foreign technologies to the development of own technologies

Until 2009, China's economic structure was built on the export orientation and saturation of the domestic production cluster with foreign technologies and consultants.

This made it possible to create a powerful internal trigger for growth, both through the creation of the working class at the first stage, and therefore demand in the economy, and a little later through the creation of the middle class (engineers, managers).

Essentially, China got everything it had to get from the capitalist Western system. China has gained markets, technology, experience in creating advanced products and developed industrial clusters. Not all Asian countries were able to take advantage of this opportunity, but China was able to.

In 2004, China emphasized the development of its own technologies, subsidizing companies in the high-tech segment and extremely actively creating scientific schools, research centers, developing fundamental and applied science.

The first visible results began to appear in 2009 (it took about 5 years). From that moment, there was a fundamental change in China's foreign policy orientation and economic policy architecture.

The pace of globalization, cross-border capital flows and world trade has slowed sharply, and has stopped in key positions since 2009. China took a very faithful and wise step, abandoning the bet on globalization to develop the domestic economy, wrote the telegram channel Spydell Finance.

Since 2009, China has been completely absorbed in the development of the domestic consumer economy, technology, infrastructure and real estate.

The growth was both extensive and intense on all fronts. The results are phenomenal. 8 years (in 2017) after the change in the economic concept, China was able to fight on a par with the world's leading high-tech flagships (Apple and Samsung).

Notes