China’s Economic Restructuring and the Business .PDFVIP

| China’s E ConomiC R Est RuCtu Ring and thE Busin Ess Envi Ronm Ent foR us Compani Es in China | China’s Economic Restructuring and e the Business Environment for US Companies in China t a m i w l e C i v s r s e e v n O i s u B Status of the Chinese Economy stimates suggest that in 2010 China became the quarter of 2009. Fixed asset investment was 24.5 percent of world’s top manufacturing country by output, a GDP, determined in large measure by the priorities of the position it is believed to have last held early in government’s stimulus program. E the 19th century. With an estimated 19.8 percent of global output, China edged slightly ahead of the US which The stimulus program constituted a shift of resources and had output of 19.4 percent. If these estimates are confirmed, capital to state-owned enterprises (SOE) and the invest- it would mark the end of more than a century during which ment vehicles of local governments. In China, this trend the US produced more by output than any other country. is characterized as “the state advances, the private sector Since the US has only 11.5 million workers employed in retreats” (guo jin min tui, 国进民退), reflecting reliance on manufacturing, about one-tenth the number of manu- such familiar state-centered measures as loans from state- facturing employees in China, American manufacturing owned banks to support industrial policy objectives. still enjoys a wide advantage in productivity (per capita output) as well as technology. Nevertheless, this shift is an