Last updated at: (Beijing Time) Wednesday, December 31, 2003
What does per-capita GDP over US$1,000 mean?
Gross domestic product (GDP) measures the economic aggregate of a country, while per-capita GDP assesses the prosperity degree of the country. In the economic circle, people, in most cases, take per-capita GDP as an important index of dividing economic development stages.
Gross domestic product (GDP) measures the economic aggregate of a country, while per-capita GDP assesses the prosperity degree of the country. In the economic circle, people, in most cases, take per-capita GDP as an important index of dividing economic development stages. So, the estimate made by the National Bureau of Statistics (NBS) that China's per-capita GDP would exceed US$1,000 this year is indeed of remarkable significance to the nation's economic development. Most economists agree to this view that getting across the threshold of US$1,000 of per-capita GDP will serve as an important starting-point for development.
As we analyze things from the angle of demands, we will discover that on a new starting point, the most radical changes will be the consumption pattern. According to international experience, when per-capita GDP surpasses US$1,000, the consumption structure will be upgraded into one of development and enjoyment, with past luxuries being turned into residents' daily necessities. The car buying spree that has been formed with each passing day since early this year is but a prelude to such a change. With per-capita crossing the threshold of US$1,000, the upgrading trend of this consumption pattern will become more rapid. Vigorous.
When per-capita GDP reaches US$1,000, car has begun to enter into families, said experts from China Machinery Industry Federation, while private car purchase will see explosive growth when the figure reaches US$3,000. At present, China as a whole has stepped into the stage of private cars, and explosive growth has been achieved in such big cities as Beijing and Guangzhou.
The upgrading of consumption structure will bring about changes in investment and production structures. Fast growing industries such as housing, auto, and electronic telecommunications are becoming the main driving forces for industrial upgrading and economic growth, and serve as the most reliable pillars for the current and future sustained and rapid economic growth. Besides, the service sector is ushering in a turning point for fast development. The elevation of the level of service industry and the increase of aggregate will be an inevitable trend. The Chinese economy will thereby march toward a higher state.
Of course, the per capita-related concept has its shortcomings. The national average level doesn't necessarily indicate the state of existence of an individual, or even a group. In rural areas, the incomes of many grain-growers remain rather low, and in some cities the living standards of laid-off workers are in urgent need to be improved. Such uneven development is precisely one of the important problems needed to be resolved in our building of a well-off society in an all-round way.
In addition, compared with previous several hundred US dollars, China's per-capita GDP in excess of US$1,000 is a historic progress. but compared with developed countries whose GDP is liable to hit tens of thousands of dollars, China is still lagging far behind. By now, China's GDP aggregate ranks world sixth but the per-capita figure is placed behind the 100th. A per-capita GDP well over US$1,000 cannot change the fact that China is a developing country with relatively low incomes. It only shows that it is an arduous, long-term and urgent task for China to accelerate development..
During the long process of economic development, per-capita GDP of US$1,000 is an important starting point, from which an economy can take off rapidly if right strategies and policies are carried out. On the other hand, such a stage usually features the most radical changes and sharpest contradictions, which would easily lead to economic stagnation if improperly handled. Strategically, we take a practical attitude to clearly see, grasp and use opportunities so as to bring about great economic development.
(Article from the Overseas Edition of People's Daily, page 2, on December 29, by Zhao Cheng and Liu Zheng; translated by PD Online staff member Li Heng.)