Overview of Our Country’s Economy and World Trade

Hello everyone! Welcome to our study notes on our country's economy and its connection to the world. Have you ever wondered where the things you use every day come from, or how our country has grown so much? This chapter will answer those questions!


We’ll explore how we can tell if a country's economy is doing well, how our country plans for its economic future, and how trading with other countries affects all of us. It might sound like a big topic, but don't worry! We'll break it down into simple, easy-to-understand parts. Understanding this helps us see our country's achievements and our own place in the big, exciting world of economics.



1. Our Country's Economic 'Report Card'

Just like you get a report card at school to see how you're doing, countries have economic 'report cards' to check their performance. These are called economic indicators.

Key Economic Indicators

Here are a few of the most important ones:

  • Gross Domestic Product (GDP): This is the BIG one! It's the total value of all goods and services produced in a country in a year. Think of it as the country's total 'score' or annual earnings. A higher GDP usually means the economy is bigger and producing more.
  • Per Capita GDP: This is the GDP divided by the number of people in the country. 'Per capita' means 'per person'. It gives us an idea of the average economic amount for each person. It helps us compare the economic well-being of countries with different population sizes.
  • Unemployment Rate: This measures the percentage of people who want to work but can't find a job. A low unemployment rate is good because it means most people who want a job have one.
  • Inflation Rate: This measures how quickly the prices of things are rising. A little bit of inflation is normal, but if it's too high, your money buys less and less over time. For example, if a snack cost $10 last year and costs $11 this year, that's inflation!
A Changing Workforce: Industrial Structure

Over the years, the types of jobs people do in our country have changed a lot. This is called a change in industrial structure. We can group industries into three types:

  1. Primary Industry: Getting raw materials from nature. Examples: Farming, fishing, mining.
  2. Secondary Industry: Making things from raw materials. Examples: Factories that build cars, make clothes, or process food.
  3. Tertiary Industry: Providing services to people and other businesses. Examples: Doctors, teachers, banking, tourism, online shopping.

Since the reform and opening up, our country has seen a huge shift. Many people have moved from primary industry (like farming) to secondary and tertiary industries (like factory work and services). This is a sign of a developing and modernising economy!


Key Takeaway

To understand a country's economy, we look at indicators like GDP to see how much it's producing. Our country's economy has not only grown bigger but has also modernised, with more people working in services and manufacturing instead of farming.



2. Planning for Success: How Our Country Promotes Economic Growth

A country's economy doesn't just grow by itself. It needs good planning and management. Let's see how our country does this.

Different Ways to Run an Economy

Imagine you're planning a class party. How do you decide on the food?

  • Planned Economy: The teacher decides everything – what food to get, how much, and who gets what. This is like a planned economy, where the government makes all the key economic decisions.
  • Market Economy: Every student brings whatever they want and trades with others. This is like a market economy, where decisions are made by individuals and businesses based on supply and demand.
  • Mixed Economy: The teacher provides the main dishes, but students can bring their own snacks to share. This is a mix of both.

Our country uses a socialist market economy. This means the market plays a major role in deciding what to produce and how, but the government guides and regulates it to make sure the economy develops in a stable and fair way, meeting the country's goals.

The Government's Role

Several government bodies are responsible for making important economic policies:

  • National Development and Reform Commission (NDRC): The main planner, thinking about the country's long-term economic strategy.
  • Ministry of Finance: Manages the country's money, like a treasurer. It handles government spending and taxes.
  • People's Bank of China (PBC): The central bank, which manages the country's money supply and keeps the financial system stable.

One of the most important tools they use is the Five-Year Plan. This is a detailed roadmap that sets goals for the country's economic and social development for the next five years. It helps everyone work towards the same objectives.

Hong Kong's Special Role

Policies like the development of the Guangdong-Hong Kong-Macao Greater Bay Area create amazing opportunities. They link Hong Kong's strengths in finance and services with the manufacturing power of other cities in the area. This helps the whole region grow together and gives Hong Kong a vital role in our country's development.

Did you know? The government plays a key role in safeguarding economic security. This means protecting our economy from major shocks, ensuring we have enough essential resources like food and energy, and keeping our financial systems safe.


Key Takeaway

Our country uses a socialist market economy, guided by government planning like the Five-Year Plans. This helps promote steady development, create opportunities (like in the Greater Bay Area), and ensure economic security for everyone.



3. A Better Life for All: Economy and Livelihood

What's the point of a growing economy? The most important goal is to improve people's lives! When the economy does well, it has a direct impact on our daily livelihood.

How Economic Growth Helps Us
  • Work and Income: A growing economy creates more and better-paying jobs. This means people can earn more money to support their families.
  • Accommodation: People have better housing conditions and more choices of where to live.
  • Consumption: We can buy a wider variety of goods and services, from healthier food to smartphones.
  • Medical Services: The government can spend more on building hospitals, training doctors, and providing better healthcare for everyone.
A Great Achievement: Poverty Alleviation

One of our country's biggest success stories has been lifting hundreds of millions of people out of poverty. This was done through targeted poverty alleviation policies.

Think of it like this: Instead of just giving money, the government helped poor areas develop their own industries, like tourism or unique local crafts. They also improved education and healthcare, giving people the tools they needed to build a better future for themselves. This is a powerful example of how economic development can transform people's lives.


Key Takeaway

Economic development directly improves people's livelihood—from better jobs and homes to better healthcare. Our country's successful poverty alleviation policies show how economic growth can be used to create a better and fairer society.



4. Connecting with the World: Trade and Our Economy

No country can produce everything it needs. That's why countries trade with each other. This is called world trade, and it's a powerful engine for economic growth for both the Mainland and Hong Kong.

The Basics of Trade

Why do countries trade?

It's like trading lunch with your friends. You might have extra dumplings, and your friend might have an extra sandwich. If you both prefer what the other has, you can trade! Both of you end up happier.

In the same way, countries sell what they are good at making (exports) and buy what other countries make better or more cheaply (imports). This allows everyone to enjoy a wider variety of products at lower prices.

Opportunities and Challenges

Trade brings huge opportunities. For consumers, it means more choice and cheaper prices. For businesses, it means a bigger market to sell their products to. However, it can also bring challenges. For example, a local factory might find it hard to compete with cheaper imported goods. This is why trade can sometimes affect certain industries or jobs.

When Countries Don't Play Fair: Trade Protection

Sometimes, a country might try to protect its own industries from foreign competition. This is called trade protection. Common methods include:

  • Tariffs: A tax on imported goods, making them more expensive.
  • Quotas: A limit on the amount of a good that can be imported.

To deal with these issues and ensure trade is fair, we have the World Trade Organization (WTO). The WTO is like a referee for global trade. It sets rules that member countries agree to follow and helps settle trade disputes peacefully.

Trade Conflicts and Economic Security

Sometimes, major trade disputes, or trade conflicts, can happen between countries. These can disrupt the economy and are a reminder of how important it is to safeguard our own economic security. By having a strong and diverse economy, our country can better handle challenges from the outside world.


Quick Review Box

Trade: Buying (importing) and selling (exporting) goods and services between countries.
Benefit of Trade: More choice, lower prices.
Trade Protection: Using rules like tariffs to limit imports and protect local businesses.
WTO: The "referee" of world trade, helping to keep it fair.


Key Takeaway

World trade connects our country with the world, bringing many benefits but also some challenges. Understanding trade protection and the role of the WTO helps us see how countries work together. In a connected world, protecting our own economic security is more important than ever.