The latest World Bank quarterly report is available here.
For anyone looking to get up to speed on the Chinese economy, it is a must-read.
The headlines tomorrow will be that the World Bank has upgraded its growth forecast for the Chinese economy to 9.5% for this year, from 9%.
But there are some other fascinating bits of data that I had not come across before.
1. Exports are recovering, but in 2009 they fell by 10.6% in real terms. Globally, imports fell by 16% in real terms, so China is still gaining market share. Exports are now growing strongly again, and many more goods and services are going to the developing world. In 2009, the US, Europe and Japan markets declined to 46% of the overall pie.
However, the overall importance of exports to China’s economy has declined. In 2007, gross exports were worth around 40% of China’s GDP.
(Bear in mind that this figure doesn’t represent the value of exports to the Chinese economy, since it doesn’t take into account the amount of money China spent on raw materials in order to make the goods it exported – and a lot of export factories in China simply assemble components imported from elsewhere).
In 2009, according to the World Bank, gross exports were 27% of GDP. It also expects that since the Chinese market is growing faster than exports, the importance of exports to the Chinese economy will "gradually decline".
2. China’s stimulus package was responsible for the robust growth in 2009, but only a small part of the package was reflected in the budget, with the deficit rising from 0.4% of GDP in 2008 to 2.8% in 2009.
Almost two-thirds of the stimulus package came from bank lending, which was worth almost 30% of GDP.
"Infrastructure made up one‐half of total medium and long term lending in 2009, compared to one‐third in 2007. Medium and long term lending to manufacturing, real estate (including mortgages) and other sectors also soared by more than 100 percent. The share of total new lending going to households, notably mortgages, increased from 14 percent in 2008 to 26 percent in 2009."
3. The renminbi may be pegged to the dollar, but China’s effective exchange rate is moving upwards, if you look at the value of the dollar against the currencies of China’s other major trading partners.
"As a result of movements of the US dollar versus other currencies, movements in China’s trade‐weighted exchange rate have differed significantly from movements against the US dollar. China’s nominal effective exchange rate (NEER) has appreciated 12.3% between July 2005 and early March 2010, after depreciating in 2000‐05, and is now broadly at the same level as in 2000 (Figure 9). This is also true for the (CPI‐based) real effective exchange rate (REER). Also, large movements in the US dollar versus other currencies have meant that since the re‐ pegging against the US dollar in end‐2008 the RMB has moved up and down recently against the currencies of the bulk of its trading partners."