GDP still strong but income gap could divide the nation
Beijing (AsiaNews) - Gross domestic product (GDP) increased by 7.8 per cent in 2012, down from 9.3 per cent in 2011. Still, China's Communist leaders are faced with a growing gap between haves and have-nots that could split the nation and lead to the system's collapse.
Although high by any standard, growth is still lower than in previous years, down from 9.3 in 2011 and 10.4 in 2010. According to the National Bureau of Statistics (NBS), GDP rose 7.9 per cent in the fourth quarter from a year earlier, an increase over previous quarters. This is more than the government target of 7.5 per cent. China's GDP reached US$ 8.280 trillion 2012.
Still, the days of China's fast growth look to be over as it moves from a low-income country to a middle-income one, said Rajiv Biswas, from IHS Global insight.
"For 30 years, China grew at about 10 per cent on average, but the Chinese economy is now in transition," he explained. "They have an ageing population and declining marginal productivity of capital. These are longer-term trends that mean they cannot grow at 10 per cent forever."
The country's one-child policy, corruption and the income gap are the main factors that affect growth negatively. This in turn is closely related to China's one-party Communist state. The net result is tens of thousands of incidents of social unrest.
Moreover, the Internet and a rising social consciousness in the population have magnified the impact of single incidents, making income gap that more irritating to ordinary Chinese.
For the first time in 13 years, the NBS released figures for the country's Gini coefficient. The latter measures the inequality among values of any frequency distribution, like income, which is very politically sensitive.
Although China's Gini coefficient was 0.474 in 2012, down from 0.491 in 2008, the figure is above the 0.4 level used by analysts as a gauge of the potential for social unrest.
However, according to the China Household Finance Survey by the South-western University of Finance and Economics in Chengdu (Sichuan), China's Gini coefficient is 0.6.
In fact, the number of mass incidents, including strikes, riots and other disturbances, doubled to at least 180,000 in 2010-almost 500 every day-from 2006, this according to Sun Liping, a sociology professor at Beijing's Tsinghua University
Although China's Communist Party wants to reduce that number, it is unclear how it will be able to do it.
Officially still a Communist nation, China has been reshaped by Deng Xiaoping's market reforms, which have created a divided society. On the one hand, the rich are one with bureaucratic and political elites; on the other, a mass of low-wage earners are without rights.
China has 2.7 millionaires 251 billionaires (in US$), whilst 13 per cent of its people live on less than .25 per day.
Without a better redistribution of wealth and better wages, the country is bound to split further and the system collapse, warn various analysts and dissidents. NBS chief Ma Jiantang, who released last year's economic data, knows this.
Speaking about recent data, he said, "we must speed up income distribution reform and [. . .] narrow the income gap". At the same time, "we must make the cake bigger, and [. . .] do a better job in sharing the cake."
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