S3 Life and Society - Module 15: Chinese Economy PDF

# S3 Life and Society ## Module 15 An Overview of the Chinese Economy ### 1. In your textbook, the following 3 indicators are used to measure the economic development of China: - Gross Domestic Product (GDP) - GDP per capita - Value of total exports of goods ### 1.1 Gross Domestic Product (GDP)...

# S3 Life and Society ## Module 15 An Overview of the Chinese Economy ### 1. In your textbook, the following 3 indicators are used to measure the economic development of China: - Gross Domestic Product (GDP) - GDP per capita - Value of total exports of goods ### 1.1 Gross Domestic Product (GDP) is the production value of a country or a region during a period of time. ### 1.2 What does GDP per capita refer to? The average production value in a country or a region during a period of time. ### 1.21 Equation for calculating the GDP per capita: $GDP per capita = \frac{GDP}{Total\ Population\ Size}$ ### 1.22 | GDP of China in 2019 | RMB 99,000 billion | |----------------------------------|--------------------| | Population size of China in 2019 | 1.4 billion | Find the GDP per capita of China in 2019. $\frac{GDP\ in\ 2019}{population\ size} =\ RMB$ China's GDP per capita ### 1.3 Value of total exports of goods is the total value of goods exported by a country or a region. ### 2. Two more indicators for measuring economic development in the textbook: - **Real GDP:** - The production value of a country or a region during a period of time, calculated by the price level of a certain year. - **Human development index (HDI)**: - Between 0 and 1, compiled by the United Nations. - To evaluate a country’s socio-economic development in terms of people’s health, education and economic performance. - Higher the value, better the development. ### 3. Finish Activity 1 on P.4 to P.5 of your textbook. ### 3.1 Comparing China’s economic development with that of the major developed countries - China’s GDP and value of total exports of goods are comparable to those of major developed countries. - However, China has a huge population compared with the U.S., Japan and South Korea, and the GDP per capita or average income per person is much lower than those of these countries. - It means that each person can only enjoy a small share of the fruits of economic growth. - Therefore, China's economic development is low at the per capita level. ### 3.2 We could look at the rate of economic development by using the growth rates of GDP and GDP per capita. Read P.5 More Information Practice | China's GDP in 2018 | RMB 90,000 Billion | |------------------------|--------------------| | China's GDP in 2019 | RMB 99,000 Billion | | China's GDP per capita in 2018 | RMB 64,644 | | China's GDP per capita in 2019 | RMB 70,714 | What is the growth rate of China's GDP from 2018 to 2019? $\frac{99k}{90k} \times 100%$ What is the growth rate of China's GDP per capita from 2018 to 2019: $\frac{70714}{64644} \times 100%$ ### 4. Find the answers for the following blanks from P.6 of your textbook. ### 4.1 Three strata of industries | Industry | Description | |-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | Primary industry | Refers to production activities that involve the extraction of natural resources. Examples include agriculture, forestry, animal husbandry, and fishery. | | Secondary industry| Refers to production activities that involve the processing of natural resources into semi-finished or finished goods. Examples include manufacturing, supply of electricity, gas & water, and mining. | | Tertiary industry | Refers to production activities that provide services. Examples include retail, finance, real estate industries, internet services, social services, stock exchange, domestic helpers, tutorial schools, retail shops, wholesaling, MTR, clinics, and storage. | ### 4.2 To which type of production does each of the following belong? **Primary industry (P), Secondary industry (S) and Tertiary industry (T)?** | Industry | Type | |--------------------------------------|------| | Textile and garment | S | | Food product manufacturing | S | | Paper products production | S | | Amusement and recreation | T | | Plastic production | S | | Electricity supply | S | | Banks | T | | Agriculture | P | | Airlines | T | | Hotels | T | | Internet services | T | | Social services | T | | Stock exchange | T | | Domestic helpers | T | | Tutorial schools | T | | Retail shops | T | | Wholesaling | T | | MTR | T | | Clinics | T | | Storage | T | ### 4.3 Division of labour In the secondary industry in China, most of factories practice division of labor. #### Definition of 'division of labor': Different workers specialize in different production stages of a good. ### 4.31 Advantages of division of labor 1. **Assigning the right person to do the right job** Different people have different talents. With division of labor, jobs can be assigned to the most appropriate workers. Each worker will have higher productivity in the job he or she is most suited. 2. **Practise makes perfect** When workers do the same job repeatedly, they become more skillful and productive 3. **Saving workers time in working moving around jobs** As each workers only focus on one job, he or she needs not to shift between different tasks. Thus, the time spent in moving between work stations can be saved for production. More output can be produced. 4. **Saving time in training workers** Since each worker concentrates on a one production stage, the worker only needs to know the skill required in his or her own task, less training time is needed. 5. **Mechanization** With division of labour, production is divided into small and simple tasks. It is easier to design machines for small and simple tasks. Therefore, mechanization is stimulated. ### 4.32 Disadvantages of division of labor 1. **Work becomes boring** Work becomes boring as workers repeat the same task day after day. 2. **Loss of job satisfaction** Each worker only concentrates on one of many production stages, it is difficult for them to recognize their contribution and gain job satisfaction. 3. **Over-interdependence** With division of labour, different production stages become more interdependent. Disruption in one stage will hinder the others. 4. **Greater risk of unemployment** With division of labour, workers only have the limited skills required for their production stage only. If the demand for their present work declines, it would be difficult for them to find jobs requiring other skills. Thus, workers have a higher risk of unemployment. ### 4.4 Find the answers for the following blanks from P.7 of your textbook. In the production process, primary, secondary and tertiary industries are interdependent. Each stratum depends on the goods and services provided by the other two strata. ### 4.5 Please look at the power point to find the answers for the following blanks: | Industry | Production | |--------------------|-------------------------------------| | Primary industry | Food & raw materials | | Secondary industry | Semi-finished goods | | Tertiary industry | Services | - **Primary industry:** Beginning of every industrial process which provides food & raw materials to secondary and tertiary industries. - **Secondary industry:** Provides semi-finished goods to primary and tertiary industries. - **Tertiary industry:** Provides services to primary and secondary industries. ### 4.6 Find the answers for the following blanks from the diagram on P.7 of your textbook. - Garment production can be used as an example to illustrate the interrelationship between the three strata of industries. - Cotton farms (primary industry) provide **Cotton** to spinning, weaving and knitting factories (secondary industry). - At the same time, they use the transport and **sales services** (tertiary industry) when selling their products. - Spinning, weaving and knitting factories buy raw materials from cotton farms. - Machine factories provide **tools** and machines for planting cotton. - At the same time, the factories use the transport and sales services. - Transportation companies provide services to both primary and secondary industries. - At the same time, they buy **vehicles** and other manufactured products from factories. They also need agricultural products from primary industry. ### 4.7 Second example: A supermarket ### 4.71 Which stratum of industries does a supermarket belong to? - **Tertiary Industry** ### 4.72 How does the primary industry cooperate with the operation of a supermarket? - The primary industry extracts natural resources like fish, meat, and vegetables and provides transport to the supermarket. ### 4.73 How does the secondary industry cooperate with the operation of a supermarket? - The secondary industry turns resources into semi-finished products like processed foods and sends the inventory to the supermarket to be sold. ### 4.74 Do you think a supermarket relies on tertiary industry? Explain your answer with an example. - Yes, the purpose of a supermarket is to sell items and it requires service from the workers to sell the items (it requires transportation, banking and insurance services). ### 5. Finish Activity 2 on P.8 to P.9 of your textbook. Relative importance of the three strata of industries to the Chinese economy - In 2018, the production values of the secondary and tertiary industries accounted for more than 95% of GDP. - About 75% of the working population work in these two sectors. They are very important to the Chinese economy. - Meanwhile, the share of primary industry in China’s GDP has been decreasing. There is also a decline in its importance in the labor market. - We could say that China is no longer an agricultural society. ### 6. Finish Activity 3 on P.10 to P.12 of your textbook. Which type of industry should China develop? - The development of the country and rapid population growth have made farmland per capita lower than international standard. - Also, a lot of quality farmland has been used for industrial and commercial purposes. - Both factors would hinder the growth of the agricultural industry in China. China’s performance in technological innovation is satisfactory. Continuous improvement in technological development could keep the competitiveness of the Chinese industrial products in the world market. However, industrial sector requires high capital input and consumes a lot of energy. Economic growth cannot rely on secondary industry in the long run. China’s tertiary industry only contributes about 59% to its GDP in 2018, which is much lower than those of developed countries and has a lot of room to grow. Service industry can be a drive for economic development. The development of service industry is favoured in the following aspects: - State policy: The ‘13th Five-Year’ Plan states that China will continue to develop its service industry. - An increase in demand for services: - There is a rise in demand for producer services such as Internet information service, research and development service, e-commerce. - Demand for consumer services also rises as Chinese consumers have become wealthier. For example, they need more retail service, health care service, transport service. - Thus, the service industry has a large growth potential and China should focus on its development in the long run. ### 7. China’s major industrial activities Industrial sector can be classified into: | Industry | Description | |----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | Light industry | Refers to industry that produce consumer goods. Consumer goods are goods that are bought by the general public to consume. Examples include food, clothing, paper. | | Heavy industry | Refers to industry that produce producer goods. Producer goods are goods that are bought by producers to help production. Examples include iron, steel, petroleum. | ### 8. Finish Activity 1 on P.14 to P.15 of your textbook.