Which of the following in not correct with respect to Chinese economy
Last updated Jun 13, 2026
Correct Answer:
Option C —
It relies on domestic-demand-led economic growth
While China has been actively trying to shift its economic model toward domestic consumption (under strategies like the "Dual Circulation" policy), its growth historically and currently remains heavily driven by state-led investment, manufacturing, and exports rather than domestic consumer demand. Private consumption in China as a percentage of GDP remains significantly lower than in other major economies like the United States or India.
Analysis of the Options
(A) It is very large (Correct statement): China is the world's second-largest economy by nominal GDP and the largest when measured by Purchasing Power Parity (PPP).
(B) It relies on exports to fuel its economic growth (Correct statement): China is known as the "factory of the world." Its massive manufacturing sector is deeply integrated into global supply chains, making exports a primary engine of its economic rise.
(D) Global economic growth rate is lower than Chinese (Correct statement): For the past several decades, China's annual GDP growth rate (often averaging between 6% to 10% in peak decades, and settling around 4% to 5% recently) has consistently outpaced the average global economic growth rate, which typically hovers between 2.5% and 3.5%.
Answer verified by Quintessence Classes faculty — Karan Nagar, Srinagar.
