Agri Study.docVIP

THE CHINA AGRICULTURE/AGRIBUSINESS OPPORTUNITY Macroeconomic Fundamentals for China are Favourable China has been growing strongly and is expected to continue to do so China has been growing strongly since opening up its economy in early 1980s. ?Average GDP growth for the last 10 years (period from 1999-2009) is 9.8%. ? ?China is expected to continue to experience strong GDP growth - Based on forecasts from various sources including IMF, EIU and Euromonitor, China is expected to grow at an average GDP of 9.3% for the period from 2010-2020. China is the fastest growing economy in the world with average annual GDP growth of approximately 9% since “Open Door” economic reforms began in 1979, where it started opening up to foreign trade and investment. Over the past 2 decades, China has trebled its share of world GDP and has witnessed massive industrialization, driven by an influx of investment in the manufacturing, infrastructure, and real estate sectors. It has recently surpassed Japan to become the second-largest economy in the world, just behind the United States. China is also the world’s second largest trading nation (after the United States), second largest Foreign Direct Investment (FDI) destination at US$91 billion in 2009 (after the United States), and has the world’s largest foreign exchange reserve, standing at US$2.4 trillion as of December 2009. Under China’s 12th Five-Year Plan, the expected average economic growth rate for the period 2011-2015 is 7-8% per annum. In 2010, Chinas nominal GDP and GDP per capita are expected to top RMB34 trillion (US$5 trillion) and RMB27,000 (US$4,000) respectively. China’s nominal GDP per capita lags far behind that of the world’s developed nations, including the United States, Japan and the United Kingdom. China’s nominal GDP per capita even lags behind developing nations such as Thailand. Assuming, conservatively, that China moves towards an average level of GDP per capita, it is evident that China will conti