China’s economy has shown signs of a rebound by registering 7.9 per cent growth in the last quarter of the year, suggesting the worst of the downturn was over for the world’s second-largest economy.
China’s overall 7.8 per cent growth in 2012 was, however, the lowest recorded by the country in 13 years, and the first instance of growth staying below 8 per cent in this time. China’s economy grew 10.4 per cent in 2010 and 9.3 per cent in 2011.
Last year’s figures, analysts in Beijing said, are likely to herald the start of a new phase of slower growth for the Chinese economy. The government has set an annual 7.5 per cent target in the next five years, with officials stressing that rebalancing the economy with more sustainable, consumption-driven growth, rather than merely achieving a high growth rate, was now the priority.
“From a medium- and long-term view, we should be aware that China has entered a new growth stage,” Zhang Liqun, an analyst with the Development Research Center of the State Council, or Chinese Cabinet, told the official Xinhua news agency.
The 7.9 per cent growth in the fourth quarter was hailed by some economists as suggesting the worst was over for the Chinese economy following a difficult year, ending a streak of slowing growth in seven straight quarters. However, analysts cautioned that the road ahead for the Chinese economy, with persisting global uncertainties, was still far from smooth.
Figures released on Friday also underscored the challenge the Chinese government faces in tackling income inequality. China’s Gini coefficient — an index that reflects the rich-poor gap — was 0.474 in 2012. A Gini coefficient of 0.4 is widely seen as a warning level.
Ma Jiantang, the head of the National Bureau of Statistics — which disclosed the Gini coefficient for the first time in more than five years — said the rich-poor gap was, however, narrowing over the past three years despite remaining high. The Gini coefficient had peaked at 0.491 in 2008, he was quoted as saying by Xinhua. The index reached 0.481 in 2010 and 0.477 in 2011.
“After the financial crisis in 2008, China’s Gini coefficient gradually dropped from the peak of 0.491 that year as the government took effective measures to bring benefits for its people,” he told a press conference.
“The country should do a better job at income distribution and strive to make the incomes of low- and middle-income residents grow faster.”