China Economy

Slower economic growth prompts Beijing to shift focus

PUBLISHED : Friday, 18 January, 2013, 10:27am
UPDATED : Saturday, 19 January, 2013, 4:02am

With the mainland's economy growing at its slowest pace in 13 years, officials are shifting their focus from speed to sustainability, addressing the issues of an ageing population and social inequality.

The economy expanded 7.8 per cent last year, the slowest since 1999, the chief of the National Bureau of Statistics, Ma Jiantang, said yesterday.

HSBC projected gross domestic product will grow 8.6 per cent this year, against a market 8consensus of 8.1 per cent.

In the long run, Ma said, growth of between 7 and 8 per cent "may be more appropriate". Ma spent a long time discussing the challenges ahead, indicating that Beijing's new leadership is focusing on reforms.

Labour, resources and environmental constraints had grown. "We should shift more energy to transforming the growth model", he said, and bring  people "more real benefits". 

The bureau released figures for the national Gini coefficient, a measure of the wealth gap, for the first time since it said the figure in 2000 was 0.412. It  fell to 0.474 last year from a peak of 0.491 in 2008 but still exceeded the  danger line of 0.4, indicating a potential rise in social unrest. The closer the coefficient is to 1, the greater the wealth gap.

Li Shi, of Beijing Normal University, an expert on the wealth gap, said: "The official Gini figures should be basically reliable. China should urgently reform the income system."

Shawn Xu Xiaonian, professor of economics and finance at China Europe International Business School in Shanghai, said the  economic data was fake.  On the Gini figures, he said: "Even in fairytales they wouldn't dare to write like that." 

Ma also said the workforce shrank for the first time last year, and the country needed an "appropriate and scientific" population policy for the times.