Over the past decade, China has experienced 8 to 10% GDP growth per annum. This rapid economic expansion has been driven by extraordinary export growth, which currently accounts for 30% of China’s GDP. When China first opened its economy to foreign investment, multi-national corporations were drawn by the nation’s cheap production costs, supply of cheap labour and preferential tax treatment for foreign investors. Through this, foreign corporations quickly transformed China into the manufacturing hub of the global economy.
During the late 1980s and 1990s, Chinese exports consisted of inexpensive items such as clothing and footwear. In more recent times, China has changed the structure of its export model to place a greater focus on the production of high-tech electronics and manufacturing products. This has diversified the range of goods and services produced and exported from China. These products are typically transported via large container ships to ports around the world. With a trade surplus of $602.36 hundred million USD in August of this year, exports are poised to rise and fuel the demand for maritime trade.
China’s Premier Li Keqiang emphasised earlier this year that the state will engage in significant structural reform to ensure growth and development. Part of this reform is harnessing the immense purchasing potential of China’s rising middle class. The average disposable income in China has increased by approximately 2,000% over the last 30 years. Looking ahead, McKinsey and Co predicts that China’s middle class will consume around $3.4 trillion USD of goods and services by 2022.
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