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Since China initiated economic reform and opening-up in 1978, the country has experienced an average annual GDP growth rate of over 9. This period also witnessed a remarkable reduction in poverty, with nearly 800 million people lifted out of extreme poverty. There have been significant advancements in access to healthcare, education, and other essential services.
Today, China is classified as an upper-middle-income country. Although absolute poverty has largely been eradicated by 2020, approximately 17.2 of the population still lives on less than $6.85 per day in 2017 purchasing power parity terms, which aligns with the World Bank's Upper-Middle-Income Country UMIC poverty line for 2023.
China’s economic growth has historically been driven by investment and export-oriented manufacturing, an approach that is now reaching its limits. These imbalances necessitate a shift from manufacturing to high-value services, moving from investment-led growth to consumption-driven expansion, and reducing carbon intensity. Recent years have seen growth decelerate due to structural constrnts such as declining labor force growth, diminishing returns on investment, and slowing productivity gns.
In recent times, the post-pandemic economic recovery in 2023 showed modest growth of 5.2, with projected growth at 4.5 for 2024. Domestic demand has remned weak, contributing to low inflation but limiting policy space for stimulus measures. Weak business confidence, partly fueled by a downturn in the property market, continues to impact economic performance.
To address productivity challenges and promote greater innovation, China needs to foster new growth drivers. The country must intensify reforms, enhance competitiveness, and support entrepreneurship to ensure sustnable long-term growth.
For instance, improving healthcare systems is essential for fostering productivity and well-being. A report by the World Bank highlights key areas of concern and necessary changes needed in China's healthcare sector.
As urbanization continues, up to 70 of the Chinese population-approximately one billion people-will reside in cities by 2030. Preparing for this demographic shift requires comprehensive planning and investment in infrastructure, housing, and public services.
The World Bank supports various projects med at achieving poverty reduction and shared prosperity through systematic diagnostics and collaboration with local authorities. For instance, the Systematic Country Diagnostic for China identifies critical challenges and opportunities for future development.
To stay updated on these initiatives, visit our data portal or follow us on social media platforms like Twitter and LinkedIn. Our newsletter provides regular updates on progress and new developments in China's economic and social landscape.
For more detled information, refer to additional resources such as the World Bank’s At the Front Line: Reflections on Four Decades of Work with China report.
Contact us for any questions or further assistance regarding our work in China.
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China economic reform poverty reduction China healthcare reform China urbanization China productivity challenges China innovation in China