China is the world’s most populous country, with a continuous culture stretching back nearly 4,000 years.

Many of the elements that make up the foundation of the modern world originated in China, including paper, gunpowder, credit banking, the compass and paper money.

After stagnating for more than two decades under the rigid authoritarianism of early communist rule under its late leader, Chairman Mao, China now has the world’s fastest-growing economy and is undergoing what has been described as a second industrial revolution.

The People’s Republic of China (PRC) was founded in 1949 after the Communist Party defeated the previously nationalist Kuomintang in a civil war. The Kuomintang retreated to Taiwan, creating two rival Chinese states – the PRC on the mainland and the Republic of China based on Taiwan.

Economy

Nowadays China is one of the world’s top exporters and is attracting record amounts of foreign investment. In turn, it is investing billions of dollars abroad.

As a member of the World Trade Organization, China benefits from access to foreign markets. In return it must expose itself to competition from abroad. But relations with trading partners have been strained over China’s huge trade surplus and the piracy of goods; the former has led to demands for Beijing to raise the value of its currency, which would make Chinese goods more expensive for foreign buyers and, in theory, hold back exports.

Some Chinese fear that the rise of private enterprise and the demise of state-run industries carries heavy social costs such as unemployment and instability.

Moreover, the fast-growing economy has fuelled the demand for energy. China is the largest oil consumer after the US, and the world’s biggest producer and consumer of coal. It spends billions of dollars in pursuit of foreign energy supplies. There has been a massive investment in hydro-power, including the $25bn Three Gorges Dam project.

Facts

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