China : Demand-side contributions to growth
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Economic performance : Beset by a deteriorated external environment and a cooled real estate
sector, economic growth in the People’s Republic of China (PRC) slowed from 9.3% in 2011 to 7.8% in 2012...
, the lowest rate in the past 13 years but still higher than the government’s target of 7.5%. Growth picked up late in 2012, boosted by stimulus measures adopted earlier in the year that included higher public spending, especially on infrastructure, and fiscal incentives. Economic activity—particularly manufacturing and other industry—started to rebound in September in a trend that has continued
uninterrupted. Higher growth at 7.9% in the fourth quarter of 2012 ended deceleration that had persisted for seven consecutive quarters. Higher salary and pension increases fueled real income growth—up by 9.5% in urban areas and by 10.7% in rural areas—lifting per capita income to $6,080 at the market exchange rate prevailing at the end of December.
Consumption expenditure growth slowed in 2012, reflecting lower economic dynamism, but nevertheless its contribution to growth surpassed that of investment (Figure 3.9.1).
The slowdown in investment was due mainly to less-brisk growth of fixed asset investment, a major component of total investment (Figure 3.9.2), which in turn resulted from falling investment in real estate triggered by government restrictions on the purchase of investment property. A rebound in apartment sales since July 2012, driven by higher incomes and stable prices, suggests improved
momentum in a key sector of the economy, which augurs well for higher growth in 2013.
Growth by economic sector varied from 8.1% in industry and services to 4.5% in agriculture. Growth in the industry sector—by far the largest component of GDP—declined by 2.2 percentage points year on year, contributing the most to GDP deceleration (Figure 3.9.3). Growth in
services suffered less than industry, and growth in several high-end services including information, design, and creative industry outperformed traditional services, suggesting upward sophistication in the sector.
Improved weather and government support to agro-services contributed to making agriculture the only sector in which growth accelerated.
Sources: National Bureau of Statistics, People’s Republic of China. http://www.stats.gov.cn/english/ (accessed 4 February 2013); ADB estimates
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