Economic performance in ChinaGross domestic product (GDP) is a primary economic indicator. It measures the total value of all goods and services produced in an economy over a certain time period. China's economy used to grow quickly in the past, but the growth rate of China’s real GDP gradually slowed down in recent years, and year-on-year GDP growth is forecasted to range at only around 4.5 percent in the years after 2022. When measured in U.S. dollars, however, China's GDP is benefiting from the appreciating national currency. The exchange rate improved from more than ten yuan per one U.S. dollar in 2007 to only around seven yuan per U.S. dollar in 2022, and the Chinese yuan is forecasted to appreciate further. This leads to higher nominal growth of the Chinese GDP when measured in U.S. dollars. Since 2010, China has been the world’s second-largest economy, surpassing Japan.
China’s emergence in the world’s economy has a lot to do with its status as the ‘world’s factory’. Since 2013, China is the largest export country in the world. Some argue that it is partly due to the undervalued Chinese currency. The Big Mac Index, a simplified and informal way to measure the purchasing power parity between different currencies, indicates that the Chinese currency yuan was roughly undervalued by 39 percent in 2021.