Home » Business » Biz Special
Modern times call for new growth indicators
Print Edition
IF a car’s fuel gauge is showing empty but the car still drives, the problem could just be a faulty instrument panel. Such is the current case for China’s economy during its “new normal” growth period.
China’s gross domestic product expanded 6.9 percent last year, recording a 25-year low. The lackluster figure is interpreted as a signal of an impending hard landing according to reports in foreign media, but Chinese consumers have yet to display signs of economic pinch.
“If you paid a visit to steel mills and coal mines, you would think that the Chinese economy is all doom and gloom. But you would feel quite the opposite if you visited the bustling innovation center in China’s Silicon Valley, Zhongguancun, or cinemas where the seats are full,” said Pan Jiancheng, deputy head with China Economic Monitoring and Analysis Center of the National Bureau of Statistics.
China is currently spreading growth among different sectors as the economy shifts from investment to consumption, he said.
China’s economy is slowing, with drops in GDP growth, industrial product prices, profitability of factories and fiscal revenue.
Current economic indicators for power consumption, railway cargo, bank loans and PMI reflect the development of investment-intensive sectors such as manufacturing.
But as the country restructures its economy, the world needs to give more attention to consumption and the service sector, according to a report released by United States investment firm Jefferies Group.
“The Chinese economic structure is changing. You can’t just say the economy is in bad shape based on some lackluster performance of traditional indicators,” said Yu Lei, managing director with the China branch of Jeff Group.
Against the downward economic pressure, there are some silver linings.
In the first 11 months of last year, 18.2 billion parcels were delivered, a year-on-year rise of 48 percent. Courier service revenue grew 34 percent to 245.6 billion yuan (US$37.3 billion), indicating a robust e-commerce sector and rapidly expanding domestic consumption.
Entertainment consumption has also grown rapidly, with China’s box office sales topping 44 billion yuan last year, up 48 percent from 2014.
In the worst-hit secondary sector, bullet trains, new-energy vehicles and smart electronic devices are showing promise as efforts to phase out polluting, energy-intensive and non-competitive industries drag down growth.
The business climate index for China’s small and medium-sized enterprises, created by Chinese search engine Baidu, has been improving for nearly a year amid government efforts to encourage entrepreneurship and innovation.
Consumption, which contributed 66.4 percent to the country’s GDP last year, will remain a stronger force driving economic growth this year as effects of the country’s supply-side reform policies start to pay off, the Ministry of Commerce said last week.
The Jefferies Group suggested adding new indicators for the Chinese economy that include express deliveries, ATM cash withdrawals, cinema box office revenue and flight distance of civil aviation, as they reflect growth conditions of rising engines of e-commerce, entertainment and tourism.
A more sophisticated approach is needed to observe economic changes such as recording power consumption, taxation and employment conditions for specific sectors, as well as business growth of professional third-party service providers such as law firms, accounting agencies and advertisement companies, Pan said.
“These are lively indicators to reflect the dynamic changes of China’s economy, especially its economic restructuring, and it’s time to update the instrument panel and display economic well-being,” he said.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
