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Monday, 14 March 2011
Average incomes tell a different story
News that China had officially surpassed Japan as the world’s No. 2 economy was greeted with neither surprise nor much cheer by most Chinese people yesterday.
News that China had officially surpassed Japan as the world’s No. 2 economy was greeted with neither surprise nor much cheer by most Chinese people yesterday.
It meant little to them that China’s economy is now bigger than any developed nation’s apart from the United States.
What mattered more was that the average Chinese is still much poorer than people in some developing countries - let alone Japan.
Local media has trumpeted China’s new global ranking since August last year, when second-quarter growth figures showed that China’s economy had overtaken that of Japan.
At that time, analysts hailed it as yet another symbol of China’s burgeoning economic power in the world. Netizens lauded its quick recovery from the global economic crisis.
But yesterday, the reaction was muted as locals like Beijing manager Michael Yang, 42, shrugged off China’s No. 2 position as “a normal development”.
“Sooner or later China is bound to reach this (given its growth momentum),” he said.
China’s red-hot 10.3 per cent economic growth in 2010 - the fastest in three years - was in sharp contrast to Japan’s struggle to keep its recovery on track.
Beijing’s efforts to spur consumption have started to bear fruit as domestic spending contributed 37 per cent - up from about 30 per cent previously - to gross domestic product (GDP) in 2010.
On top of this, a spurt in investments, some of which were financed by Beijing’s four trillion yuan (S$778 billion ) stimulus package, contributed 55 per cent to growth.
This year, with economists expecting its growth to hit more than 9.3 per cent, China is likely to race further ahead of the still-struggling Japanese economy.
And China may well overtake the US to become the world’s No. 1 economy by 2020, according to Mr. John Hawksworth, head of macroeconomics at PricewaterhouseCoopers.
But as Beijing officials have repeatedly pointed out over the past six months, China still has a long way to go in improving ordinary folk’s livelihoods. Its GDP per capita lags behind even countries such as Thailand and Jamaica.
Last year, China’s average GDP per person was about US$3,800 (S$4,870), around 105th in the world, while some 150 million of its 1.3 billion people live below the poverty line.
In comparison, Japan’s GDP per capita is more than 10 times that of China.
“We still have an enormous gap to make up,” Commerce Ministry spokesman Yao Jian said last August, in response to questions at a routine press conference about China’s No.2 status.
“The quality of China’s economic growth still needs to be improved, whether it is in terms of people’s quality of life or in terms of science, technology and environmental protection,” Mr. Yao had acknowledged.
China also lags behind Japan in creating national brands and cutting-edge technology that enjoy global recognition, noted Ms Christy Li of Beijing consultancy Business Next.
“While Japan is world-famous for creating world-class products such as Panasonic and Sony Electronics, China is still a lower-end factory for the world and so its people will earn relatively low wages in such an economy,” she said.
Yesterday, some Chinese even voiced scepticism about the quality of growth for the world’s No.2 economy.
Investment firm Dibiao’s chief executive Xu Zifang warned in a microblog that the Chinese economy faces problems from overheating to rising prices.
“Beware the Chinese economy’s obese state, it is actually very weak,” he said.
One netizen on popular forum kdnet.com agreed: “The high GDP is created by speculation and the housing bubble, so what good will that do for ordinary folk?”
With January inflation data due out today, many are keeping their fingers crossed that the figure will fall short of 5per cent.
Mr. Peter So, managing director at CCB International Securities, told Agence France-Presse: “Investors remain concerned about possible interest-rate hikes in China if the country’s consumer price index (CPI) for January rises over 5 per cent, which would likely trigger another round of tightening measures.”
China’s CPI, a key measure of inflation, rose 4.6 per cent year-on-year in December, down from 5.1 per cent in November, which was the fastest rate in more than two years.
2 comments:
Average incomes tell a different story
By Grace Ng
15 February 2011
News that China had officially surpassed Japan as the world’s No. 2 economy was greeted with neither surprise nor much cheer by most Chinese people yesterday.
It meant little to them that China’s economy is now bigger than any developed nation’s apart from the United States.
What mattered more was that the average Chinese is still much poorer than people in some developing countries - let alone Japan.
Local media has trumpeted China’s new global ranking since August last year, when second-quarter growth figures showed that China’s economy had overtaken that of Japan.
At that time, analysts hailed it as yet another symbol of China’s burgeoning economic power in the world. Netizens lauded its quick recovery from the global economic crisis.
But yesterday, the reaction was muted as locals like Beijing manager Michael Yang, 42, shrugged off China’s No. 2 position as “a normal development”.
“Sooner or later China is bound to reach this (given its growth momentum),” he said.
China’s red-hot 10.3 per cent economic growth in 2010 - the fastest in three years - was in sharp contrast to Japan’s struggle to keep its recovery on track.
Beijing’s efforts to spur consumption have started to bear fruit as domestic spending contributed 37 per cent - up from about 30 per cent previously - to gross domestic product (GDP) in 2010.
On top of this, a spurt in investments, some of which were financed by Beijing’s four trillion yuan (S$778 billion ) stimulus package, contributed 55 per cent to growth.
This year, with economists expecting its growth to hit more than 9.3 per cent, China is likely to race further ahead of the still-struggling Japanese economy.
And China may well overtake the US to become the world’s No. 1 economy by 2020, according to Mr. John Hawksworth, head of macroeconomics at PricewaterhouseCoopers.
But as Beijing officials have repeatedly pointed out over the past six months, China still has a long way to go in improving ordinary folk’s livelihoods. Its GDP per capita lags behind even countries such as Thailand and Jamaica.
Last year, China’s average GDP per person was about US$3,800 (S$4,870), around 105th in the world, while some 150 million of its 1.3 billion people live below the poverty line.
In comparison, Japan’s GDP per capita is more than 10 times that of China.
“We still have an enormous gap to make up,” Commerce Ministry spokesman Yao Jian said last August, in response to questions at a routine press conference about China’s No.2 status.
“The quality of China’s economic growth still needs to be improved, whether it is in terms of people’s quality of life or in terms of science, technology and environmental protection,” Mr. Yao had acknowledged.
China also lags behind Japan in creating national brands and cutting-edge technology that enjoy global recognition, noted Ms Christy Li of Beijing consultancy Business Next.
“While Japan is world-famous for creating world-class products such as Panasonic and Sony Electronics, China is still a lower-end factory for the world and so its people will earn relatively low wages in such an economy,” she said.
Yesterday, some Chinese even voiced scepticism about the quality of growth for the world’s No.2 economy.
Investment firm Dibiao’s chief executive Xu Zifang warned in a microblog that the Chinese economy faces problems from overheating to rising prices.
“Beware the Chinese economy’s obese state, it is actually very weak,” he said.
One netizen on popular forum kdnet.com agreed: “The high GDP is created by speculation and the housing bubble, so what good will that do for ordinary folk?”
With January inflation data due out today, many are keeping their fingers crossed that the figure will fall short of 5per cent.
Mr. Peter So, managing director at CCB International Securities, told Agence France-Presse: “Investors remain concerned about possible interest-rate hikes in China if the country’s consumer price index (CPI) for January rises over 5 per cent, which would likely trigger another round of tightening measures.”
China’s CPI, a key measure of inflation, rose 4.6 per cent year-on-year in December, down from 5.1 per cent in November, which was the fastest rate in more than two years.
ADDITIONAL REPORTING BY LINA MIAO
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