BY ALICE ZHAO
Chinese premier Wen Jiabao just announced the country’s next year GDP growth goal of 7.5 percent, a shadow cast to the global stock market the next few days as it is the first time in seven years that the country set the goal below 8 percent.
Pronounced similarly to the word “fortune”, the number “eight” is the most auspicious of digits in Chinese numerology. For the figure itself, maybe it is zero point five away from auspice. However, for the sustainable development of the country, the drop might be a blessing.
Behind the huge digits of China’s uprising GDP growth, the country is undermined with a varieties of problems like an overblown balloon that is about to burst. As Wen said in his speech,China is determined to push forward the “transformation of its economic development pattern”.
The relaxed pace shows China has decided to turn away from the investment-driven, export-dependent growth model. For a long time, China’s economic development heavily depended on investment and export. The Financial Times reports that investment as a share of GDP is the highest in any economy in history, at close to half, a level that most economists agree is unsustainable over the long term. Today, China’s main export partners seem to have problems of their own: The U.S. economy growth is notoriously slow and Americans don’t really want to spend though Washington has forced Renminbi to appreciate throughout the years; The Europe is struggling with its debt crisis. China can no longer count on the outside aid.
A slower growth pace is also the measure Beijing has adopted to wait for its people. The share of private consumption today in China’s GDP is unusually low, at about a third, compared with most economies where the consumption ratio is more than half, according to the Financial Times. Chinese people have the tradition to save money instead of spending. It is partly cultural, but it manifests the lack of consumption confidence in the ordinary Chinese. Chinese usually joke that middle class does not exist in China, as the top wealthy people consist only a tiny proportion of the population, the rest are struggling at the very bottom. Worse of all, most people do not enjoy social welfare, a luxury only enjoyed by some companies “within the system”. Wen has shown his ambition for the domestic consumption, “We will vigorously adjust income distribution, increase the incomes of low- and middle-income groups and enhance people’s ability to consume.”
Meanwhile, A China that relies more on consumer spending may pollute less, easing global environmental worries, and produce more jobs. China is witnessing an increasing demand for environmentally-sound products and new energy while it endeavors to build a resource-conserving and environmentally-friendly society. Environment not only benefits its economy, but also gains its voice in the international stage as a power living up to its responsibility.
The target is largely symbolic as the real figure is likely to be higher –The International Monetary Fund forecasts Chinese growth of 8.2percent this year and other economists 8.5 percent – but the lower official target is highly significant all the same, for China finally slows its pace to look at itself.
