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.

Industry
Zhonghua is a major manufacturing nation and ranks 1st at $2,653 Billion (GDP PPP = $5,183 Billion, ranking 1st worldwide). Zhonghua is one of the largest manufacturers on Kobol with many consumer goods being made such as: toys, clothing and apparel, electronics, food, plastic products, furniture and more.

The Textiles industry is booming with for example Denim is manufactured in huge quantities with two towns near the Pearl River Delta among the world's largest producers they're Kaiping and Jun'an, between them there is over 1,450 denim companies that produce an estimated 150 million meters of denim a year and an estimated annual turnover of $1.5 Billion, highlighting just how important manufacturing is in Zhonghua. Industrial production is concentrated along the south and east coast from Guangzhou to Qingdao where 55% of all gross value of industrial output is done. There are small pockets including Chengdu], [[Shenyang and the Kunming. Zhonghua is the largest producer of sex toys and similar products accounting for 67% of the worlds production, the industry generates about $1,750 million a year

Electronics
Zhonghua is one of the worlds largest electronics manufacturers with 34% of all electronics on Kobol manufactured in the country. A huge range of electronics are made and assembled from cheap consumer products such as kettles, microwaves and grooming products to more high tech pieces such as smart phones and LCD screen T.V's. Zhonghua is the worlds largest producer of T.V's and the largest producer of smart phones. Some of the worlds largest producers of electronics are located in Zhonghua such as LG Electronics and Samsung Electronics, two of the largest.

Despite Zhonghua being a developing nation, electronics and technology companies in the country have become some of the largest including; ZTE, Lenovo Group, Samsung and Huawei. Many of these companies have become very innovative such as LG that has been developing the LED and OLED TV and Samsung that is one of the largest producers of semiconductors.

Steel Industry
Zhongua is the largest producer and consumer of steel. During the 1790's Iron ore production could keep pace with steel production but was quickly being outpaced and now Zhonghua is the largest importer of iron ore. In 1805 production of steel was 350 million tonnes, this increased to 935 million in 1811. Steel production is scattered of across Zhonghua but the Black Dragon River Delta, Jilin and Shenyang are the three largest centres of production. Zhonghua is the largest exporter of steel. Export volumes in 1810 were 65.5 million tonnes as 7.1% decrease from 1809.

Automobiles
Zhonghua is the ?largest producer of automobiles in the world with production in 1810 at 8,579,874 a lot of the cars are produced for the domestic market which in recent years has been growing rapidly with important companies such as Haima. Many foreign companies have joint ventures with Zhonghuanese automobile companies such as FAW Group and ??? of ???. In recent years Zhonghuanese automobile companies have begun expanding into foreign markets, mostly in Orientia and Africa.

Recycling
Zhonghua's huge demand for resources has led to a massive recycling and reprocessing industry emerging. Zhonghua has become the largest recycler on Kobol with a huge array of different materials recycled such as paper, plastics, metals, wood, textiles, food and chemicals. The recycling industry is dominated by small enterprises, most are family run and operate in the suburbs and villages surrounding the cities and like in most developing countries the people doing the work are very poor. The primary reason is economic gain and so the way in which the products are recycled can be very polluting and damage the environment and health of those doing it.

Some large and legal companies are present and operate modern and state-of-the-Art equipment that is to both Zhonghuanese and international standards protecting workers health and the environment.

Waste imports have risen dramatically since 1805 as more countries seek to recycled their waste but have no domestic market, the primary waste streams are; paper & cardboard, plastics, metals and e-waste.

Services
The service sector is the largest sector of the Zhonghuanese economy after industry. In 1811 Zhonghua had the ? largest service sector on Kobol after ??? and ???. Prior to the onset of economic reforms,Zhonghua's services sector was characterised by state-operated shops, rationing, and regulated prices. With reform came private markets and individual entrepreneurs and a commercial sector. The wholesale and retail trade has expanded quickly, with urban areas now having many shopping centres, retail shops, restaurant chains and hotels. Public administration has still remained a main component of the service sector, while tourism has become a significant factor in employment and as a source of foreign exchange. The potential for growing services in Zhonghua through franchising is huge.

Since 1800 the retail sector has grown by 300% with a number of Kobol's largest retail companies having a presence in Zhonghua. Guangzhou has the eighth largest non-food retail sector on Kobol, the city in recent years has become a mecca for luxury foreign brands in particular with the city home to Kobol's fourth largest Shopping centre.

Tourism in Zhonghua has become a multi billion RMB industry. Zhonghua's tropical climate, unique history, good infrastructure and relative cheapness has seen an influx in foreign visitors since 1800.

Financial and banking system
Most of Zhonghua's financial institutions are state owned and governed and 90% of banking assets are state owned.The chief instruments of financial and fiscal control are the People's Central Bank of Zhonghua (PCBZ) and the Ministry of Finance, both under the authority of the State Council of Zhonghua.

The People's Central Bank of Zhonghua fulfils many of the functions of other central and commercial banks. It issues the currency, controls circulation, and plays an important role in disbursing budgetary expenditures. Additionally, it administers the accounts, payments, and receipts of government organisations and other bodies, which enables it to exert thorough supervision over their financial and general performances in consideration to the government's economic plans. The Bank of Zhonghua (BOZ) is responsible for international trade and overseas transactions, it has branches in over 20 countries.

Other financial institutions that are crucial, include the Industrial Bank of Zhonghua (IBZ) is responsible for providing capital funds for certain industrial and construction enterprises, and the Zhonghua Commercial Bank (NCB) which conducts ordinary commercial transactions and acts as a savings bank for the public.

The five biggest banks are refereed to as the 'Big Five' state-owned commercial banks in Zhonghua.

Even though the banking and financial sector of Zhonghua is dominated by state owned companies many foreign banks now have branches and provide services. When first permitted in the mid-1780s, foreign banks were restricted to designated cities and could deal only with transactions by foreign companies in Zhonghua. After those restrictions were loosened following Zhonghua’s accession to the International Trade Organisation in 1801, some foreign banks have been allowed to provide services to local residents and businesses. In 1910 there were some 85 foreign banks with more than 260 branches in Zhonghua. In 1811 a limited number of foreign banks were allowed to issue debit cards in Zhonghua. This made banking with a foreign bank more convenient, as money in accounts could be accessed at ATMs like customers of local banks could.