Calls to refocus gov't attention amidst GDP growth

By Ma Yujia
0 CommentsPrint E-mail, March 13, 2010
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While the government is heralding another year of excellent GDP growth in 2009, some experts are questioning whether it is an accurate indicator of China's economic strength.

China saw its GDP increase 8.7 percent in 2009, with some provinces showing an even greater increase. But many people feel their standard of living has not kept pace.

"GDP growth should not be taken as the only goal," said Cheng Enfu, a lawmaker in the National People's Congress and economist. "It is sustainable economic growth and improvement of people's livelihood for which the government needs to strive."

Local governments calculate their GDP using mainly investment, exports and consumption figures while ignoring personal income. In 2009, investment accounted for two-thirds of total GDP, which has led to excess production and wasting of money and resources, revealing a serious defect in China's economic growth model.

"Most local governments largely depend on investment to spur GDP growth and don't take the increase of people's income into their consideration," said Yuan Gangming, a research fellow in economics at the Chinese Academy of Social Sciences. "In most developed countries, residents' income accounts for 60 percent of GDP, while 40 percent is the non-resident income. In China, the situation is the opposite, which is not reasonable."

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