In 2014, China ranged second among countries with the largest gross domestic product worldwide. Since the introduction of economic reforms in 1978, the country has experienced rapid social and economic development. In 2013, it became the world’s largest trading nation, overtaking the United States. However, per capita GDP in China was still much lower than that of industrialized countries.
The annual growth rate of China’s GDPhad constantly been above nine percent until 2011. According to projections of the IMF, the annual GDP growth will slow down further until 2019. Rising domestic wages and the competitive edge of other Asian and African countries are seen as main reasons for the stuttering in China’s economic engine. One strategy of the Chinese government to overcome this transition is a gradual shift of economic focus from industrial production to services.
Another major challenge lies in the massive environmental pollution that China’s reckless economic growth has caused over the past decades. China’s development has been powered mostly by coal consumption, which resulted in high air pollution. To counteract industrial pollution, further investments in waste management and clean technologies are necessary. In 2012, only 1.59 percent of GDP was spent on pollution control. Surging environmental costs aside, environmental issues could also be a key to industrial transition as China placed major investments in renewable energy and clean tech projects. The consumption of green energy skyrocketed from 0.8 million metric tons of oil equivalent in 2003 to 42.9 million in 2013.