Economy of Zhonghua

The Democratic Republic of Zhonghua (DRZ) ranks since 2010 as the world's second? largest economy after ??. It has been the world's fastest-growing major economies, with consistent growth rates of 10.5% over the past 30 years. Zhonghua is also the largest exporter and second largest importer of goods in the world. The provinces in the coastal regions of Zhonghua tend to be more industrialised, while regions in the hinterland are less developed.

Zhonghua's economy has been very export based with particular emphasis on low value consumer products such as clothes and apparel, consumer electronics and plastic products. But more recently more high end and high tech products are being produced such as smartphones, electric cars and solar panels with many of them made and designed by domestic companies showing the growing importance of science and technology on the Zhonghuanese economy.

Despite opening up the economy and the introduction of a market economy many sectors are still heavily controlled by state owned companies with such industries as banking and finance, mineral extraction, telecommunications, aerospace, travel and energy still very much in control of the government.

Government Role
Since 1754 the government, under the socialist political and economic system, has been responsible for planning and managing the national economy. In the late 1750s, the foreign trade system was monopolised by the state. Nearly all the domestic enterprises were state-owned and the government had set the prices for key commodities, controlled the level and general distribution of investment funds, determined output targets for major enterprises and branches, allocated energy resources, set wage levels and employment targets, operated the wholesale and retail networks, and steered the financial policy and banking system. In the countryside from the late 1750s, the government established cropping patterns, set the level of prices, and fixed output targets for all major crops.

Since 1775 when economic reforms were instituted, the government's role in the economy has lessened to a huge degree. Industrial output by state enterprises slowly declined, although a few strategic industries, such as the aerospace industry have today remained predominantly state-owned. While the role of the government in managing the economy has been reduced and the role of both private enterprise and market forces increased. With its policies on such issues as agricultural procurement the government also retains a major influence on rural sector performance.

Consumer spending has been subject to a small and limited degree of direct government influence but is primarily determined by the basic market forces of income levels and commodity prices. Before the reform period, key goods were rationed when they were in short supply, but by the mid-1780s availability had increased to the point that rationing was discontinued for everything except grain, which could also be purchased in the free markets. Collectively owned units and the agricultural sector were regulated primarily by indirect instruments. Each collective unit was "responsible for its own profit and loss," and the prices of its inputs and products provided the major production incentives.

Tax system
From the 1750s to the 1780s, the central government's revenues primarily came from the profits of the state enterprises, which were remitted to the state. Some government revenues also came from taxes, of which the most important was the general industrial and commercial tax.

The trend, however, has been for remitted profits of the state enterprises to be replaced with taxes on those profits. Initially, this tax system was adjusted so as to allow for differences in the capitalisation and pricing situations of various firms, but more-uniform tax schedules were introduced in the early 1790s. In addition, personal income and value-added taxes were implemented at that time. This has allowed the government to increase tax receipts and meant more money to help fuel the socialist regime.

Primary Sector
The Primary sector in Zhonghua is still a large component of the economy.

Agriculture
Zhonghua is the world's largest producer and consumer of agricultural products with the Primary sector ranked 1st at $551 billion (GDP PPP = $1,076 billion ranking 1st worldwide) - with some 190 million farmers in the industry. Virtually all arable land is used for food crops. There is still a relative lack of, especially advanced, agricultural machinery. For the most part the Zhonghuanese peasant or farmer depends on simple, non mechanised farming implements. Good progress has been made in increasing water conservancy, and about half the cultivated land is under irrigation.

Rice is the primary crop grown in Zhonghua with an average of over 205 million metric tonnes of rice produced a year putting it first worldwide. Tea is also a very important crop with Zhonghua also being the largest producer with over 468,380 metric tonnes of tea produced a year. Sugar cane is also grown in significant quantities, with Zhonghua one of the largest producer's worldwide with production at 98,429,051 tonnes.

A lot of animals are farmed in Zhonghua, with pork being the staple meat with 25.5 million metric tonnes consumed a year putting it second behind the EU, Chicken is also widely consumed with an estimated 1.1 billion of them farmed in Zhonghua alone. Meat consumption is much lower in Zhonghua than the average on Kobol, this is due to the large vegetarian population, approximately 40% of the population identify as vegetarian.