A worker at a factory in Nanchang, Jiangxi province. (Photo/Xinhua)
2012 may prove to have been the year China shifted its focus away from pursuing outright GDP growth to improving the quality of economic growth and its direct benefits for the public, suggest remarks remarks by the country's premier-in-waiting, Li Keqiang, according to the Guangzhou-based Southern Weekly.
"If our GDP does not help improve people's income then no matter how rapidly the GDP grows, it's only idle boasting," said Li during a government meeting on Dec. 19.
The vice premier's remarks, along with a talk about the benefits of reforms and Beijing's plan to push for urbanization, the newspaper said, provide an approximate road map for plans to double average income levels by 2020 from 2010 levels.
Government officials have traditionally paid more attention to GDP figures over the past 30 years, while ordinary members of the public naturally care more about who they benefit — in many cases, they have not.
For members of the public, the newspaper said, creating wealth is their main concern and they could achieve this by earning more or growing the value of their assets. Financial and property markets in China did not report much in the way of results in 2012 because of the slow global economic recovery and the lack of stimulus measures like those introduced following the 2008 financial crisis.
On the income front, the government's great influence on deposit rates, the property market and equity markets has created risks and uncertainty for members of the public who wanted to make more money through these channels, the newspaper said.
The 4 trillion yuan (US$640 billion) increase in net deposits in banks in China during the first 11 months of 2012, the newspaper said, indicated that people have been inclined to spend a large amount of money or make major investments.
Meanwhile, companies listed in Shanghai and Shenzhen had also seen their combined market value fall to the recent 22 trillion yuan (US$3.53 trillion) level from over 30 trillion yuan (US$4.81 trillion) in early 2011, bringing major losses for investors.
The rise in housing prices, despite government intervention to curb overheating, reflected the lack of market supply, the newspaper said, and the government's failure to solve the problem.
In addition, the fact that government revenue had grown by 21.9% during last November showed that pubic income levels have been squeezed as a result, the newspaper said.
China is also facing a growing gap in per capita income levels between its urban and rural populations, which had risen from 1.8:1 in 1985 to 3.2:1 in 2010.
The industrialization which has driven China's rapid economic growth over the past three decades will not be sustainable since it has led to an imbalanced global trade situation in which the country — and its trading partners — need to make a breakthrough.
If Beijing plans on making urbanization the basis of future economic development, the newspaper said, it must focus on the service sector instead of the manufacturing sector, because the former can both create more jobs and boost domestic consumption.
With recent emphasis on reforms and their benefits, the newspaper said, the growth of public income levels will rely on whether the government is able to push through these proposed reforms.