Economy & Gross Domestic Product

In 1997-98, Asia hit a financial crisis that seriously impacted the Asian economy. This prompted the Chinese government to launch its expansionary fiscal policy plan. The heavy government spending kept stable economic growth. The Gross Domestic Product (GDP) of the year 2002 was 10,239.8 billion yuan, up by 8 percent over 2001. Of this total, the value-added of the primary industry was 1,488 billion yuan, up by 2.9 percent. The value-added of the secondary industry was 5,298 billion yuan, up by 9.9 percent. The value-added of the tertiary industry was 3,453 billion yuan, up by 7.3 percent.  GDP has risen from 362.4 billion Yuan in 1978 to 13.7 trillion in 2004.  Indviduals have also become richer, with annual GDP per head rising during this time from 379 Yuan to 10,502 Yuan. The Asian Development Bank (ADB) predicts that China's economic growth will slow to seven percent in 2002 but will pick up to 7.4 percent in 2003, boosted by strong domestic demand and World Trade Organization (WTO) membership. The slower recovery of the global economy after a U.S.-led recession will force China to continue its expansionary fiscal policy into 2002 and 2003. The fiscal deficit will remain under three percent of gross domestic product (GDP), which is under control. Inflation is likely to remain moderate at between one to 1.5 percent as tariff liberalisation pushes import prices lower.  The projected growth in domestic consumption and investment will be around 9-10 percent for 2002 and 2003. China's entry into the WTO will boost the value of annual GDP by between one to two percent in the long-term as its export markets grow and more jobs are created. The country's first production census discovered at the end of 2005 that GDP was grossly underestimated due to inaccount of the rapid growth of the services sector. As a result, growth rates for 2003-2005 were recorded at around 10% per year. Despite efforts to cool the overheating economy, the offically recorded GDP growth rate was 11.4% in 2007. In 2008 the global economic crisis began to reduce China's growth rate. In the face of forecasts that this might drop below the rate at which school leavers can be absorbed by the growing economy (7%-8%) the government decided to pump 4 trillion Rmb 4 into the economy in the form of an economic stimulus package consisting largely of investment in fixed infrastucture and human capital. The preliminary estimate for real GDP growth was 9%. This was revised upwards to 9.6% on 25 December 2009, when current-price GDP in 2008 was re-calculated to be CNY31,404.5 billion.