Macroeconomic indicators - Caution as economy overtakes Japan

Friday, 18 Feb 2011

China Daily reported that China still has a long way to go to improve its economy despite formally overtaking Japan as the world's second largest economy.

Japan Cabinet Office said Japan gross domestic product reached USD 5.47 trillion last year compared to USD 5.88 trillion for China

Mr Lu Zhengwei senior economist with the Shanghai-based Industrial Bank said "It is not a surprise that China overtook Japan.” However, economists pointed out that China per capita GDP was only about 10% of Japan.

Mr Yi Xianrong economist at the Chinese Academy of Social Sciences a top think tank said "We should not overestimate our GDP figure as China population is 1.3 billion, 10 times bigger than Japan."

Mr Ma Jiantang head of the National Bureau of Statistics said in January that the country has a huge population, a weak economic foundation, few resources and many people are mired in poverty.

He said that "Therefore, while we take note of our expanding economic size and strength, we should also soberly understand that China remains a developing nation."

The China Youth Daily described China expansion as an empty happiness as the country economic development was at the expense of cheap labor and environmental degradation while the quality of life including education, social security and healthcare, still lags far behind developed countries.

Mr Yuan Gangming research fellow at the Center for China in the World Economy at Tsinghua University said that in the next three to five years China is likely to maintain a growth rate between 8% and 10%.

He said that however for an improved quality of life and healthy, sustained growth, the country must invest more in areas such as human resources, the underdeveloped western regions and social security.

Mr Zheng Xinli permanent vice-chairman of China Center for International Economic Exchanges also said the country should continue its reforms and improve its economic structure to avoid the middle-income trap

He said that "In the past 30 years, China developed because of reform and opening-up. In the coming two decades, we need more reforms to further unleash the potential of development. He predicted urbanization will be the biggest driving force for China's economy.”

He added that one person moving into a city can create economic value of CNY 100,000. In the next 10 years, 200 million Chinese people will move into cities and towns with a potential to add CNY 20 trillion to the economy over the decade.

(sourced:China Daily)
Tags:Macroeconomic indicators,economy overtakes Japan,Shanghai, China per capita GDP,Chinese Academy of Social Sciences,National Bureau of Statistics