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Changes of GDP and Disposal Income Per Capita

China's GDP per capital growth will advance in accord with the economic growth between 2010 and 2020, as the economy remains on the fast track

TABLE 1.3 China-USA Comparison of GDP (2011-2020)

China GDP (CNY in billions)

USA GDP

China/

Year

CNY

USD

(USD)

USA (%)

2011

43,811.2

6,954.2

14,874.0

46.8

2012

47,316.1

7,510.5

15,171.5

49.5

2013

51,101.4

8,111.3

15,474.9

52.4

2014

55,189.5

8,760.2

15,784.4

55.5

2015

59,604.7

9,461.1

16,100.1

58.8

2016

64,373.0

10,217.9

16,422.1

62.2

2017

69,522.9

11,035.4

16,750.5

65.9

2018

75,084.7

11,918.2

17,085.6

69.8

2019

81,091.5

12,871.7

17,427.3

73.9

2020

87,578.8

13,901.4

17,775.8

78.2

Note: All figures are estimates ignoring price factor.

and population grows at a stable rate (see Table 1.4). If RMB appreciates during this period, the GDP per capital (calculated in USD) will grow faster than the economy.

Changes in the distribution proportions of national incomes can be traced back to 1993. Government income has been increasing as national incomes have grown rapidly. However, income for citizens has grown at a much lower rate than the government's (see Table 1.5 and Figure 1.1).

After entering the "12th Five Years" period, China will experience a long-term transition in its economic growth model, as strategically planned. One core purpose of the transition is to expand the contribution of domestic demand—consumption/spending demand, specifically—to the economic growth. Expansion of consumption demand depends on rapid expansion of incremental revenue and wealth stock. Therefore, the proportion and system of national income distribution must be adjusted to keep the incomes of citizens (workers) consistent with economic growth. Both the growth rate of government revenue and the proportion of government in the national income can then be lowered properly. If the adjustment is actualized and the income of citizens (workers) grows proportionally with the economy, the disposable income of citizens per capita will be CNY 25,800 by the year 2020 (compared to CNY 12,500 in 2010), or higher if the wealth stock (property income) is taken into account (see Table 1.6).

TABLE 1.4 Growth of Chinese GDP Per Capita (2011-2020)

Year

GDP per

CNY

Capita

USD

2011

31,900

5,000

2012

33,700

5,300

2013

36,500

5,700

2014

39,400

6,200

2015

42,500

6,700

2016

45,900

7,200

2017

49,600

7,800

2018

53,600

8,500

2019

57,900

9,100

2020

62,500

9,900

Notes:

1. All figures are estimates.

2. Inflation is ignored for the estimates.

3.The Chinese population is expected to remain at 1.4 billion throughout this period, except in 2011 (1.37 billion).

For a long period, investment was the leading stimulus to Chinese economic growth. The investment volume for the years of 2000 and 2010 was CNY 3,291.7 billion and CNY 27,812.2 billion, respectively, with the average annual growth rate as high as 22.7 percent (see Table 1.7).

After joining the World Trade Organization (WTO) in 2011, China became increasingly dependent on external factors in its economic growth. For example, its imports and exports swelled to an average annual growth rate of 21.62 percent and volume grew 6.17 times between 2000 (USD 540.2 billion) and 2010 (USD 3,335.1 billion). Specifically, commodities grew 6.23 times, from USD 474.2 billion to USD 2,972.8 billion, at an average annual growth rate of 22.06 percent, while services grew 5.49 times, from USD 66 billion to USD 362.3 billion, at an average annual growth rate of 22.06 percent. China topped all other countries in export transactions in the same period (see Table 1.8).

Despite substantial growth in investments and in import and export business, domestic consumption/spending demand did not perform satisfactorily as one of China's economic engines. Domestic demand grew from CNY 3,415.3 billion in 2000 to CNY 15,699.8 billion in 2010, at an average annual growth rate of 13.6 percent (see Table 1.9). The disappointing

TABLE 1.5 Distribution of National Income (2000-2010)

Distribution of National Income (2000-2010)

Distribution of National Income (2000-2010)

FIGURE 1.1 Distribution of National Income (2000-2010)

growth of consumption demand is directly related to income distribution policy and slow growth in resident income.

The three factors that most greatly contributed to Chinese economic growth between 2000 and 2010 are investments, consumption, and imports and exports. Among these, investments led in growth,

TABLE 1.6 Growth of Income and Disposable Income of Chinese Citizens (2011-2020)

Growth of Income and Disposable Income of Chinese Citizens (2011-2020)

Notes:

1. All data based on estimates ignoring price fluctuation.

2. The Chinese population is expected to remain at 1.4 billion throughout this period, except in 2011 (1.37 billion).

TABLE 1.7 Investments in China (2000-2010)

Year

Total Investment

Volume (CNY in billions)

Growth Rate (%)

Goverment Investment

Volume (CNY in billions)

Growth Rate (%)

Non-Governmental Investment

Volume (CNY in billions)

Growth Rate (%)

2000

3,291.7

10.3

210.95

13.9

3,080.76

11.1

2001

3,721.3

13.1

254.64

20.7

3,466.66

12.5

2002

4,349.9

16.9

316.10

24.1

4,033.80

16.4

2003

5,556.6

27.7

268.78

-15.0

5,287.82

31.1

2004

7,047.7

26.8

325.49

21.1

6,722.21

27.1

2005

8,877.3

26.0

415.43

27.6

8,461.87

25.9

2006

10,999.8

23.9

467.20

12.5

10,532.60

24.4

2007

13,732.4

24.8

585.71

25.4

13,146.69

24.8

2008

17,282.8

25.9

795.48

35.8

16,487.32

25.4

2009

22,459.9

30.0

1,268.57

59.5

21,191.33

28.5

2010

27,812.2

23.8

1,467.78

15.7

26,344.42

24.3

Source: National Bureau of Statistics of China (adapted). TABLE 1.8 Imports and Exports in China (2000-2010)

Import and Export

Commodity Transactions

Service Transactions

Year

Volume (CNY in billions)

Growth Rate (%)

Volume (CNY in billions)

Growth Rate (%)

Volume (CNY in billions)

Growth Rate (%)

2000

540.2

29.29

474.2

31.50

66.0

15.40

2001

581.5

7.65

509.6

7.47

71.9

8.90

2002

706.2

21.44

620.7

21.80

85.5

18.90

2003

952.2

34.83

850.9

37.09

101.3

18.50

2004

1,288.2

35.29

1,154.5

35.68

133.7

32.00

2005

1,579.0

22.57

1,421.9

23.16

157.1

17.50

2006

1,952.1

23.63

1,760.4

23.81

191.7

22.00

2007

2,424.6

24.20

2,173.7

23.48

250.9

30.90

2008

2,867.7

18.28

2,563.2

17.92

304.5

21.40

2009

2,494.2

-13.02

2,207.5

-13.88

286.7

-5.80

2010

3,335.1

33.71

2,972.8

34.67

362.3

26.37

Source: National Bureau of Statistics of China, General Administration of Customs of the People's Republic of China, and Ministry of Commerce of the People's Republic of China.

TABLE 1.9 Growth of Domestic Consumption Demand (2000-2010)

Domestic Consumption Demand

Urban Areas

Rural Areas

Volume (CNY

Growth

Volume (CNY

Growth

Volume (CNY

Growth

Year

in billions)

Rate (%)

in billions)

Rate (%)

in billions)

Rate (%)

2000

3,415.3

9.7

2,111.0

10.6

1,304.3

8.3

2001

3,759.5

10.1

2,354.3

11.5

1,405.2

7.7

2002

4,091.1

8.8

2,589.8

10.0

1,501.3

6.8

2003

4,584.3

9.1

2,977.7

10.3

1,606.5

6.8

2004

5,395.0

13.3

3,557.3

14.7

1,837.7

10.7

2005

6,717.7

12.9

4,509.5

13.6

2,208.2

11.5

2006

7,641.0

13.7

5,154.3

14.3

2,486.7

12.6

2007

8,921.0

16.8

6,041.1

17.2

2,879.9

15.8

2008

10,848.8

21.6

7,373.5

22.1

3,475.3

20.7

2009

12,534.3

15.5

8,513.3

15.5

4,021.0

15.7

2010

15,699.8

18.3

13,612.3

18.7

2,087.5

16.2

Note: The data for 2010 is not reliable.

Source: Statistics Bulletin on National Economy and Social Development 2010, issued by National Bureau of Statistics of China.

consumption declined, and imports and exports fluctuated (see Table 1.10 and Figure 1.2).

Since 2010, the Chinese government has made great efforts toward the following measures:

- Transition of the economic growth model

- Reform of national income distribution system

- Adjustment of national income distribution proportions

- Expansion of domestic demand

- Lowering of economic dependency on external factors

- Adjustment of imported and exported commodities mix

- Reduction of resource consumption of exported commodities

- Increase of technological level

- Added value of exported commodities

- Implementation of prudent macroeconomic policy

If these governmental initiatives persist, there will be a noticeable increase in the consumption contribution to economic growth by 2020. The

TABLE 1.10 Contribution from Investments, Consumption, and Imports and Exports to Chinese Economic Growth

Contribution from Investments, Consumption, and Imports and Exports to Chinese Economic Growth

Contribution from Investments, Consumption, and Imports and Exports to Chinese Economic Growth

FIGURE 1.2 Contribution from Investments, Consumption, and Imports and Exports to Chinese Economic Growth

proportion of contribution of investment, consumption, and imports and exports to economic growth will also change moderately. These changes in the macro economy will serve both as the macro background for the development of Chinese capital markets and as prerequisites for the survival and growth of Chinese securities companies in the future.

 
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