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Economic and social outlook of China in 2015

By Yao Shujie ( Updated: 2014-12-08 14:18


Economic and social outlook of China in 2015

Since the 18th Party Congress, 58 high officials, or “Big Tigers”, with an administrative rank at or above the vice-minister or vice provincial governor level, have been investigated, including a member of the former Politburo Standing Committee, Zhou Yongkang, and the former vice chairman of the Central Military Committee, Xu Caihou.

Along with the “Eight Regulations”, the anti-corruption campaign has fundamentally changed the political environment and gained popular support from the ordinary Chinese people, as tens of millions of state and party officials have changed their behavior in a big way.

The construction of a clean government is fundamental for a stable society and a convincing basis for the legitimacy of the Communist Party leadership, which is a prerequisite for China's long-term prosperity and sustainable social and economic development.

However, the main challenge remains as to how to balance high growth and economic structural change?

There are two important aspects in structural change: the balance between the three economic sectors, i.e, manufacturing, services and agriculture; and the substitution of high value-added industrial products for low-tech, low-valued goods.

Since 2010, the share of manufacturing in the country's GDP has declined by about one percentage point per year and that of services has risen in the same magnitude. Agriculture's share in GDP has maintained at the 10 percent level. In addition, economic growth in the inland areas has surpassed that in the coastal areas, reducing their long term development gaps, and hence improving spatial income equality.

The second change in the economic structure is the slowdown of growth in some of the major polluting industrial products, such as electricity, cement and steel. For instance, in October 2014, steel production increased by only 2 percent, electricity 1.9 percent, and cement production declined by 1.1 percent. Such production performance of all these products is the poorest record for a decade.

Despite the slowdown in economic growth, the quality of growth, on the other hand, has increased. In the first three quarters of 2014, more than 10 million jobs have been created, fulfilling the job creation target of the entire year. Urban and rural per capita incomes rose significantly faster than GDP growth. In particular, rural per capita income growth was faster than urban per capita income by almost 2 percentage points, helping to reduce the persistently high rural-urban income inequality.

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