Economic Analysis for the Chinese Healthcare Industry

A Report by Frost & Sullivan

Economic Overview

E c o n o m i c Tr e n d s

Economic Indicators

Rapid Economic Growth Witnessed in China

The Chinese economy has witnessed tremendous growth since 1980, when the government began to implement reforms to transform the economy from a centrally planned system to a market-oriented system. In 2005, the country registered a GDP growth rate of 10.2 percent, equivalent to $2,228.00 billion. The country is now the fourth largest economy in the world after the United States, Japan, and Germany.

In 2005, exports increased by 28.4 percent to $762.00 billion, while imports grew by 17.6 percent to $660.00 billion. The trade surplus amounted to $102.00 billion in 2005, recording a growth rate of 23.2 percent over the previous year. In 2005, foreign direct investment amounted to $60.30 billion and foreign exchange reserves reached $818.90 billion, an increase of 34.3 percent over 2004. China is now the third largest trading economy in the world after the United States and Germany.

In 2004, around 9.8 million jobs were created in urban areas, which were 0.8 million jobs more than the target set for the year. Around 5.1 million laid-off employees were employed again. The unemployment rate in the urban areas was 4.2 percent, 0.1 percent lower than in 2003.

The Chinese economy is expected to record an annual growth rate of 8.0 percent during the 11th Five-Year Plan (2006-2010). With rapid economic growth, China is expected to witness an increase in the affluent section of the population who can afford better quality healthcare services.