落潮的埃沃海角:China's economy: Have slower but better growth

来源：百度文库编辑：九乡新闻网时间：2024/04/29 05:16:52

China's economy: Have slower but better growth

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2011-3-3 09:18

Call it the 7 per cent solution. Wen Jiabao, China’s prime minister, pre-released that magic number in an internet chat with the nation on Sunday. It is the new target for real annual growth in gross domestic product in the forthcoming five-year plan. The decline from the previous plan’s 7.5 per cent target is a modest 7 per cent, but these little sevens add up to a step-change.

At first glance, the change appears to be significantly downward, since the new target is much lower than the 10 per cent average GDP growth over the past five years. The new target certainly looks to be more in line than the old one – Tuesday’s purchasing managers’ index for manufacturing was at its lowest in six months. But the Chinese government has not become less ambitious. The more modest goal reflects two realities.

The first is higher incomes. The hyper-fast economic growth of the past was spurred on by the fast spread of basic goods. But the “base effect” is kicking in. There is less room now for hyper-fast growth in sales of, say, mobile phones: 64 per cent of the population already have a mobile phone (against 95 per cent in the US).

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2011-3-3 09:18

The second reality is higher aspirations. China is still not a rich country – South Korea’s GDP per person is five times higher – but poverty is no longer the government’s overriding nemesis. Mr Wen mentioned income inequality, corruption and the need to foster “creative spirit and independent thinking”. In his words, the count of new skyscrapers no longer matters as much when officials are judged on “whether the people feel happy and satisfied”.

For China, the broader official agenda makes sense, especially if the government works on developing its own competence. The implications for foreigners are less clear. A slower growth rate might reduce trading opportunities and calm demand for commodities.

But if it cools down property speculation and leads to a smaller trade surplus, on balance the world will be grateful. (FT)

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