Overall Score: 52.7 World Rank: 139
China Quick Facts/United States
- Population: 1.4 Billion/316.4 Million
- GDP: $13.4 Trillion /16.8 Trillion
- GDP Growth: 7.7% /1.9%
- GDP Per Capita: $9,844 /$53,101
- Unemployment: 4.6% /7.5%
- Inflation: 2.6% /1.5%
- Foreign Direct Investment: 123.9 Billion /$187.5 Billion
Seven Major Sources of Economic Progress
The Communist Party’s control of all levels of government in China. China has a weak judicial system that is vulnerable to influence. The migrant work force has little legal protection. Protection of property rights has deteriorated over time. It is said that a more comprehensive set of economic reforms is needed.
China's market is not very competitive because it is regulated by the government in almost all aspects. Incorporating a business taked 11 procedures and about a month. There are many licences that need to be aquired and they are expensive. The government provides businesses with the fossil fuels, electricty, and subsides needed to run the business. State owned enterprises are better able to get capital and lower financing costs while medium sized companies suffer from lack of access to credit.
Limits on Government Regulation
An Efficient Capital Market
Capital is easily obtained by state owned enterprises but small and medium sized companies suffer from lack of access to credit. Remember China is communist so tax rates are extremely high on citizens. The government takes this tax money and spends it on what it feels fit. In the US it is very easy to get capital compared to China. The citizens have very few protections.
Low Tax Rates
Extra Credit: Interesting Facts
2. China executes the death penalty more than 4 times as the rest of the world combined.
3. Fortune cookies are not a traditional Chinese custom. They were invented in early 1900 in San Francisco.
4. Facebook, Twitter and The New York Times have been blocked in China since 2009.
5. The World's First Paper Money was created in China 1,400 years ago.
6. Table tennis is China's national sport.