| Global Times | 2013-2-23 0:58:01
By Song Shengxia
China's GDP per capita doubled to $6,100 (38,354 yuan) from 2009 to 2012, official data released Friday suggested, reinforcing China's status as a middle-income nation.
However, economists cautioned Friday that this rapid growth had not transformed the lives of the Chinese people as a fast-rising yuan and soaring property prices had offset the increase of GDP per capita growth.
China's GDP reached 51.93 trillion yuan ($8.31 trillion) in 2012 while its population stood at 1.35 billion by the end of the year, a statistic report released Friday by the National Bureau of Statistics (NBS) showed.
That means China's GDP per capita hit $6,100 in 2012, up 12 percent from the previous year when it stood at $5,432 and doubling the level seen in 2009.
"The fact that China doubled its GDP per capita in such a short time does not indicate that the actual lives of the public improved. The fast-rising yuan value in recent years helped China achieve a higher GDP per capita in this short span," Zhuang Jian, a senior economist with the Asian Development Bank, told the Global Times Friday.
According to the World Bank's standards set in 2011, a country with a per capita gross national income (GNI) between $4,036 and $12,475 can be considered an upper middle-income country and a country with income beyond $12,476 can be categorized as a high-income economy. For China, the gap between the values of GDP and GNI is so small as to be statistically insignificant.
"Unfortunately, the increase in China's GDP per capita is not reflected in the level of people's happiness. People feel an increasing burden and less happy because of rocketing prices, especially for real estate," Yuan Gangming, a researcher with the Center for China in the World Economy at Tsinghua University, told the Global Times.
"They either cannot afford homes or have to cut down on spending to pay off a mortgage after they buy homes. Ordinary people pay a heavy price for the property bubble," Yuan said.
Home prices have also shown signs of increased growth in recent months despite the government's policy to curb speculation on the real estate market. Home prices rose at a quicker pace in major Chinese cities in January, the statistics bureau data showed Friday.
Year-on-year, 53 out of the 70 major Chinese cities monitored by the NBS saw house prices rise by 4.7 percent in January, up from the 2.4-percent rise recorded in December.
"Instead of trumpeting the improvement of GDP per capita, China should be careful of not falling into the middle-income trap," Yuan said.
The term "middle-income trap", a concept introduced by the World Bank in 2006, refers to countries stagnating after reaching middle-income status usually due to an unbalanced industrial structure.
"China is at a crossroads now. Traditional engines of growth - investments and exports - have lost their magic due to inefficient spending and subdued global demand," DBS Bank in Singapore said in a research report sent to the Global Times Friday.
"Consumption is touted as the next growth driver but concrete steps on how to boost it are lacking. To arrest growth decline, there is an imminent need to reinvigorate urbanization, which is bound to be the next engine of China's future economic growth," the report said.
China's new leadership pledged to encourage domestic consumption and urbanization to restructuring its economy from excessive reliance on export and investment.
"China's current economic condition is testing the wisdom of Chinese leaders. China must learn to bear transitiory pains from restructuring efforts and sacrifice short-term interest for long-term gains," Yuan concluded.
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