1. The combined output of the developing economies accounted for 38% of world GDP (at market exchange rates) in 2010, twice its share in 1990 (see upper chart). On reasonable assumptions, it could exceed the developed world’s within seven years. If GDP is instead measured at purchasing-power parity, which takes account of the fact that lower prices in poorer countries boost real spending power, emerging economies overtook the developed world in 2008 and are likely to reach 54% of world GDP this year. Even more impressive, they accounted for three-quarters of global real GDP growth over the past decade.
2. A recent downward revision for the US economy means that there has been no GDP (after inflation adjustment since the second quarter of 2005. The US is six years into a lost decade of no economic growth adjusted for inflation.
Some economists have pointed to relentless urbanization as a long-term source for resilient growth of China’s economy.
About 170 million people have moved to Chinese cities from the country’s rural areas over the last 10 years, according to the Chinese Academy of Social Sciences (CASS) last year. Over the next 20 years, some 360 million people will move from the countryside to cities in China, and that provides a powerful source for demand, before China’s urbanization rate reaches the 70 percent seen in many developed countries.
China is on the way to building 36 million units of affordable housing and expanding the coverage of its pension and medical insurance programs in the next five years, which will most likely be a major boon for the economy in terms of investment growth.
To guarantee its future economic growth, China must root out local government officials’ blind enthusiasm for GDP growth through changing the way of assessing officials’ performance, said Cheng.
According to the 12th Five-Year Plan, the performance of government officials would be evaluated by a comprehensive criterion which gives higher weight to improving people’s living standards, building affordable housing, and cutting carbon emissions, among other things.
Take the northwestern Gansu Province as an example, in assessing the performance of Party and government officials in its 14 cities and prefectures, “social development index” outweighs “economic development index” by 51 to 25 percent.
Cheng also said concrete measures must be taken to destroy bottlenecks hindering growth of private businesses, and create a level playing field for them to compete with state-owned enterprises which have easier access to bank loans and are often criticized as less efficient.