Economy of China

China has an upper middle income, developing, mixed, socialist market economy incorporating industrial policies and strategic five-year plans. It is the world's second largest economy by nominal GDP, behind the United States, and the world's largest economy since 2016 when measured by purchasing power parity (PPP). Due to a volatile currency exchange rate, China's GDP as measured in dollars fluctuates sharply. China accounted for 19% of the global economy in 2022 in PPP terms, and around 18% in nominal terms in 2022. Historically, China was one of the world's foremost economic powers for most of the two millennia from the 1st until the 19th century. The economy consists of public sector enterprises, state-owned enterprises (SOEs) and mixed-ownership enterprises, as well as a large domestic private sector and openness to foreign businesses in their system. Private investment and exports are the main drivers of economic growth in China, but the Chinese government has also emphasized domestic consumption.

China is the world's largest manufacturing economy and exporter of goods. It is also the world's fastest-growing consumer market and second-largest importer of goods. China is also the world's largest consumer of numerous commodities, and accounts for about half of global consumption of metals. China is a net importer of services products. It is the largest trading nation in the world and plays a prominent role in international trade. China was the largest recipient of foreign direct investment in the world as of 2020, receiving inflows of $163 billion. but more recently, FDI has fallen sharply to negative levels. It has the second largest outward foreign direct investment, at US$136.91 billion for 2019 alone. China has significant income and wealth inequality. As of 2022, China was second in the world in total number of billionaires. In 2022, it was second in millionaires with 6.2 million. China has the world's largest foreign-exchange reserves worth $3.1 trillion, but if the foreign assets of China's state-owned commercial banks are included, the value of China's reserves rises to nearly $4 trillion. China faced a mild economic slowdown during the 2007–2008 financial crisis and initiated a massive stimulus package, which helped to regain its economic growth. More recently, the imposition of the "3 Red Lines" on developer borrowing has sparked a real estate crisis and has raised questions on the accuracy of China's claims for the severity of this crisis.

With 778 million workers, the Chinese labor force was the world's largest as of 2020. It ranks 28th on the Global Competitiveness Report. Per the Global Innovation Index in 2022, China was ranked 11th in the world, 3rd in Asia & Oceania region and 2nd for countries with a population of over 100 million. It is the only middle-income economy and the only newly industrialized economy in the top 30. It is often ranked among the world's most innovative countries, leading several measures of global patent filings. China has the second-largest financial assets in the world, valued at $17.9 trillion as of 2021. It also has two (Shenzhen-Hong Kong-Guangzhou and Beijing in the 2nd and 3rd spots respectively) of the global top 5 science and technology clusters, which is more than any other country. As of March 2022, China has over 500 million 5G users and 1.45 million base stations installed. In 2022, mainland China's ten largest trading partners were European Union, United States, South Korea, Japan, Taiwan, Hong Kong, Vietnam, Australia, Malaysia, and Russia.

China has free trade agreements with many nations, some of which are already in force (such as RCEP, the largest trade bloc in history) or are still in the negotiation phase. Although widely regarded as the "powerhouse of manufacturing" or "the factory of the world", exports contribute only a comparatively small proportion of the Chinese economy, at just 18.5% in 2020. Of the world's 500 largest companies, 142 are headquartered in China. It has four of the world's top ten most competitive financial centers and three of the world's ten largest stock exchanges (both by market capitalization and by trade volume). China's economy is both a contributor to rising global greenhouse gas (GHG) emissions causing climate change and severely affected by its adverse impacts, although its per capita emissions are still much lower than developed economies such as the United States.