General Data - China 

Jul 3rd 2007
From the Economist Intelligence Unit
Source: Country ViewsWire

 

Background: The People's Republic of China was founded in 1949 by the Chinese Communist Party (CCP). The CCP chairman, Mao Zedong, then led the country for nearly three decades. After gaining power in 1978, two years after Mao's death, Deng Xiaoping introduced economic reforms. From 1989 to 2002 Jiang Zemin presided over a more collective leadership. The CCP is now led by Hu Jintao, who is also state president. Mr Jiang's faction remains influential.

Political structure: The CCP dominates the government. Mr Hu is general secretary of the CCP, state president and chairman of the Central Military Commission, which controls the armed forces. Wen Jiabao leads the government as premier. The politburo standing committee is the main decision-making body. The National People's Congress is a largely rubber-stamp legislature. The Chinese People's Political Consultative Conference groups political, social and religious constituencies within a powerless institution. There is no formal political opposition to the CCP, and dissent is firmly suppressed.

Policy issues: China's leaders want continuing economic liberalisation and sustainable growth alongside enduring political control. They recognise that many people have failed to benefit since economic reforms were launched at the end of the 1970s, and that such large numbers of disadvantaged citizens constitute a political liability. Accordingly, the balance of economic development is being altered in favour of social priorities. The economy is opening up following China's accession to the World Trade Organisation in 2001, and the government will continue to pursue further liberalisation. A private sector made up of domestic and foreign-funded interests is now strongly encouraged to expand and complement the state sector.

Taxation: The rate of corporate income tax is theoretically 33%. In practice, a raft of preferential policies reduces the tax paid by foreign-invested enterprises (FIEs). The government has announced that preferential policies for FIEs will gradually be phased out.

Foreign trade: In 2006 merchandise exports were worth US$970bn and imports stood at US$792bn (according to customs data), resulting in a trade surplus of US$177bn.