There’s good news and bad news for China’s economy heading into 2013. A gauge of the country’s manufacturing sector ended the year at a 19-month high and analysts are now estimating that growth will not slow as much as previously expected. However, as the economy grows, some are being left out, as 200 million people remain below the poverty line, according to government statistics.
Although China is still set for sub-8 per cent growth in 2012, its weakest in more than a decade, momentum picked up noticeably in the fourth quarter after the government increased its spending on infrastructure.
“Such momentum is likely to be sustained in the coming months when infrastructure construction runs [at] full speed and property market conditions stabilise,” said Qu Hongbin, HSBC’s chief economist for China.
Mr Qu forecast that economic growth could rebound to 8.6 per cent next year, which would mark a relatively strong recovery despite a sluggish global economy.
The Shanghai Composite, China’s benchmark index, rose nearly 1 per cent in trading on Monday morning, continuing an upswing that has seen it rally nearly 15 per cent over the past month after languishing for much of the year.
Impoverished areas are concentrated in the central and western regions, with a total population of 200 million, [Li Keqiang] said.
“If we are to build a moderately prosperous society, getting the 200 million people out of poverty will be a major task.
But we have the resolve and tenacity to accomplish this,” state run China Daily quoted him as saying to the villagers.
This is 50 million more than that was mentioned by UN in 2010.
The leaders visit to the poor areas followed criticism in China that wealth gap too is growing at a faster rate.
According to the recent survey by China Household Finance Survey Centre, the country’s wealth gap has reached 0.61 in 2010, much higher than the international warning line of 0.4.
Inequality and corruption are potential disasters for the Party, which derives its legitimacy from its success in guiding the economy to greatness. Whether the Xi-Li administration’s newfound desire to tackle these problems is motivated by self-interest or not, it is still a welcome development compared to the former administration’s sometimes wilful blindness to anything that stood in the way of economic growth.