The document summarizes key economic issues and challenges facing China's economy. It notes that China has a GDP of $5.88 trillion but growth has slowed to 10.3% in 2010 and 9.7% in the first quarter of 2011. Major challenges include China's export-based economy which relies on manufacturing and constitutes 39.7% of GDP. Inflation has also increased to 6.2% in August 2011. China holds $1.8 trillion in US treasury bills, amounting to 16% of US public debt, but its currency remains undervalued and its banking sector includes a large "shadow system". Socio-political challenges include an aging population, inequality, and political and linguistic differences.

1. Chinese EconomyIssues & Challenges Presented By: AmrinKaur AnishGarg Apoorva Sharma RachitSinghal Sagar Shah Chawla

2. Background GDP per capita $4,283 (nominal: 95th; 2010) $7,518 (PPP: 93rd; 2010) GDP by sector industry (46.8%), services (43.6%), agriculture (9.6%) (2010 est.) Government Type: Communist State Population: 1.32 billion Currency:Renminbi(RMB); Unit: Yuan (CNY) GDP $5.88 trillion (nominal: 3rd; 2010) $10.09 trillion (PPP: 2nd; 2010) GDP growth 10.3% (2010) 9.7%(1st qtr of 2011)

3. Major Challenges Economic Challenges Socio-Political Challenges Inflation Export based economy Gross capital formation US Treasury bills Banking sector Undervalued currency Demographics Political factors Inequality of wealth Legal system Imitation products Linguistic challenges

4. Economic Challenges Big story: Manufacturing Exports constitute 39.7% of GDP World-wide financial crisis Strict product quality regulations Reduced private consumption expenditure trend Export Based Economy

5. Economic Challenges

6. Economic Challenges Undervalued Currency To gain a competitive advantage over other countries in export

7. Economic Challenges Inflation Inflation rate in China was last reported at 6.2 percent in August of 2011

8. Economic Challenges

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10. Economic Challenges Banking Sector “Shadow” banking system Fudging Statistics Increased pressure on Government and companies

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12. Economic Challenges U.S Treasury Bills Holds 36% of all U.S treasury bills Amounts to 16% of U.S public debt Reserves 1.8Bn USD Dollar loosing stability Purchasing assets in other countries South Africa: Gold Mines Korean assets

13. Economic Challenges

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16. Facilitates savingsReduces Domestic Consumption Increased Interest Rates Surplus Goods Unemployment Declining Exports

18. 15-64 years: 73.6%

20. The Silver Lining Ageing population Labor Dries Up Increase in wages Increased Labor Cost Increase Purchasing Power Decreased Corporate Investments Balanced Economy Increase in Consumption

21. Socio Political Challenges Political factors Inequality of wealth Legal system Imitation products Linguistic challenges

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