Friday, March 7, 2008

China Economics 101

The folks at Matco gave out some statistics and information on China at their show last week. Here's just some of what they reported:

The Value-added tax used to be 19%, it has been re-set to 5%.
Wages - they're going up an average of 10% each year.
Food costs - up 18% in 2007.
Inflation - up 6.9% in 2007
Home prices - up 11.3% in January 2008 v. January, 2007.

Now, here's some economic information from my favorite Chinese newspaper,
The central government plans to increase spending on rural development by 30% in 2008.
They will establishe 30 high-tech industrial bases, focusing on things like information, biological technology, civil aviation, the astronautical sector, new materials and new energy. What's our country doing to develop technology in these areas?

Last year, the industrial output of the high-tech sector in China accounted for 7.8% of their GDP. Meanwhile, new high-tech exports hit US$347.8 billion, accounting for nearly 30% of the nation's total exports. Industrial output and exports have risen at an average annual rate of 21.5% and 37.7% respectively, during the past seven years through 2007. This year, ten million jobs are expected to be created in urban areas.

China's economy grew by 65.5% over the past 5 years, with an average annual increase of 10.6%, to become the world's 4th largest economy in 2007. Earlier this week, China's parliament announced a targetd GDP growth of 8% for 2008. They expect to hold their CPI at 4.8% in 2008, however their PPI climbed 6.1% in January, from a year earlier.

Think prices for imported tools and equipment are going to stay low? Think again.

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