Economy of China


The People's Republic of China has a developing socialist market economy, incorporating industrial policies and strategic five-year plans. China has the world's second-largest economy by nominal GDP and since 2016 has been the world's largest economy when measured by purchasing power parity. China accounted for 19% of the global economy in 2025 in PPP terms, and around 17% in nominal terms in 2025. The economy consists of state-owned enterprises and mixed-ownership enterprises, as well as a large domestic private sector which contribute approximately 60% of the GDP, 80% of urban employment and 90% of new jobs.
China is the world's largest manufacturing industrial economy and exporter of goods. China is widely regarded as the "powerhouse of manufacturing", "the factory of the world" and the world's "manufacturing superpower". Its production exceeds that of the nine next largest manufacturers combined. Exports as a percentage of GDP are around 20%. China is the largest trading nation in the world and plays a prominent role in international trade. Manufacturing has been transitioning toward high-tech industries such as electric vehicles, renewable energy, telecommunications and IT equipment, and services has also grown as a percentage of GDP. China is the world's largest high technology exporter., the country spends around 2.6% of GDP to advance research and development across various sectors of the economy. It is also the world's second-largest importer of goods. China is a net importer of services products.
China has a network of free trade agreements with several countries, though Regional Comprehensive Economic Partnership accounts for the bulk of its trade integration. Of the world's 500 largest companies, 142 are headquartered in China. It has three of the world's top ten most competitive financial centers and three of the world's ten largest stock exchanges. China has the second-largest financial assets in the world, valued at $17.9 trillion as of 2021. China one of the recipient of foreign direct investment in the world as of 2025, receiving inflows of $107billion. It has the third largest outbound FDI, at US$192.20 billion for 2024. China's economic growth has dealt with a range of challenges in the 2020s including higher youth unemployment and a property crisis.
With 773 million workers, the Chinese labor force is the world's largest as of 2024, although it is shrinking due to the rapidly aging population. In March 2025, Forbes estimated China ranked second in the world, after the U.S., in total number of billionaires and total number of millionaires, with 516 Chinese billionaires, while Hurun Global Rich List estimated it ranked first, with 1,021 billionaires. China also has 6.3 million millionaires as of 2025, second highest after the U.S. Public social expenditure in China was around 10% of GDP.

History

Historically, China was one of the world's foremost economic powers for most of the two millennia of Pax Sinica, spanning from the 1st until the 19th century. China accounted for around one-quarter to one-third of global GDP until the mid-1800s. China's share of global GDP was one-third in 1820 as the Industrial Revolution was beginning in Great Britain. China's GDP in 1820 was six times as large as Britain's, the largest economy in Europe, and almost twenty times the GDP of the nascent United States.
At the end of the Chinese Civil War, the economy was devastated. As the defeated Nationalists fled to Taiwan, they stripped China of liquid assets, including gold, silver, and the country's dollar reserves. By the time the Kuomintang was defeated, commerce had been destroyed, the national currency rendered valueless, and the economy reduced to barter.
The development of the People's Republic of China from one of the poorest countries to one of the largest economies was the quickest of any country. From 1949 until the Chinese economic reform in 1978, the country maintained a self-sufficient, state-led economy focused on rapid industrialization, while substantial market activity remained underground. Economic reforms began under Deng Xiaoping. China subsequently became the world's fastest-growing major economy, with growth rates averaging 10% over 30 years. Many scholars consider the Chinese economic model as an example of authoritarian capitalism, state capitalism, or party-state capitalism under the general secretaryship of Xi Jinping.
China brought more people out of extreme poverty than any other country in history. Between 1978 and 2018, China reduced extreme poverty by 800 million people. The percentage of the population living in extreme poverty decreased from 88.1% to 0.2% between 1981 and 2019. Its current account surplus increased by a factor of 53 between 1982 and 2021, growing from $5.67billion to $317billion.
During this time, China also became an industrial powerhouse, moving beyond initial successes in low-wage sectors like clothing and footwear to the increasingly sophisticated production of computers, pharmaceuticals, and automobiles. China's factories generated $3.7trillion in real manufacturing value added, more than the US, South Korea, Germany, and the UK combined. China's manufacturing sector benefits from one of the world's largest domestic markets, immense manufacturing scale, and highly developed manufacturing supply chains. It also has two of the global top5 science and technology clusters—Shenzhen-Hong Kong-Guangzhou and Beijing, in the 2nd and 3rd spots respectively—which is more than any other country.
China has sustained growth due to export relations, its manufacturing sector, and low-wage workers. It was the only major world economy to experience GDP expansion in 2020, with a growth rate of 2.3%. However, the country posted one of its worst economic performances in decades in 2022 due to the COVID-19 pandemic. In 2023, the International Monetary Fund predicted that China would continue to be one of the fastest growing major economies. China's economy is both a contributor to rising global greenhouse gas emissions and severely affected by the adverse impacts of climate change, although its per capita emissions remain much lower than developed economies like the United States.

Regional economies

China's unequal transportation system, combined with important differences in the availability of natural and human resources and in industrial infrastructure, has produced significant variations in the regional economies of China. The economic development of Shenzhen has caused the city to be referred to as the world's next Silicon Valley.
Economic development has generally been more rapid in coastal provinces than in the interior and there are large disparities in per capita income between regions. The three wealthiest regions are the Yangtze Delta in East China; the Pearl River Delta in South China; and Jing-Jin-Ji region in North China. It is the rapid development of these areas that is expected to have the most significant effect on the Asian regional economy as a whole and Chinese government policy is designed to remove the obstacles to accelerated growth in these wealthier regions. By 2035, China's four cities are projected to be among the global top ten largest cities by nominal GDP according to a report by Oxford Economics.

GDP by administrative division

provincesshare
China
141,020.7219,700.70100
Guangdong13,911.862,119.6710.67
Jiangsu12,287.561,826.8510.15
Shandong8,743.511,299.947.22
Zhejiang7,771.541,155.436.42
Henan6,134.51912.055.07
Sichuan10,674.981,843.734.69
Hubei5,373.49798.904.44
Fujian5,310.99789.614.39
Hunan4,867.04723.614.02
Anhui4,504.50669.703.72
Shanghai4,465.28663.873.69
Hebei4,237.04629.943.50
Beijing4,161.10618.653.44
Shaanxi3,277.27487.252.71
Jiangxi3,207.47476.872.65
Chongqing2,912.90433.072.41
Liaoning2,897.51430.792.39
Yunnan2,895.42430.482.39
Guangxi2,630.09391.032.17
Shanxi2,564.26381.242.12
Inner Mongolia2,315.87344.311.91
Guizhou2,016.46299.801.67
Xinjiang1,774.13263.771.47
Tianjin1,631.13242.511.35
Heilongjiang1,590.10236.411.31
Jilin1,307.02194.321.08
Gansu1,120.16166.540.93
Hainan681.82101.370.56
Ningxia506.9675.370.42
Qinghai361.0153.670.30
Tibet213.2631.710.18

Hong Kong and Macau

In accordance with the one country, two systems policy, the economies of the former British colony of Hong Kong and Portuguese colony of Macau formally preserve a capitalist system separate from mainland China.

Regional development

These strategies are aimed at the relatively underdeveloped regions of China in an attempt to address unequal development: