China's GDP reaches $9.3 trillion in 2013

[Chinese-Dragon]

This was announced a few days back:

China economy grows 7.7 pct in 2013, beating government target - Xinhua

BEIJING, Jan. 20 (Xinhua) -- China's economy grew 7.7 percent in 2013, the same as 2012, overshooting the government target of 7.5 percent, according to the National Bureau of Statistics (NBS) on Monday.

Gross domestic product (GDP) totalled 56.9 trillion yuan (9.3 trillion U.S. dollars), the NBS said.

"China's economic performance stabilized in 2013 despite downward pressure both at home and abroad," said Ma Jiantang, director of the NBS at a press conference, citing encouraging GDP and job data as well as subdued inflation.

The Chinese government defined the "upper and lower limits" of the reasonable range of economic performance in 2013. With a GDP growth rate of 7.5 percent, the "lower limit" is intended to ensure steady expansion and employment, and with the consumer price index at around 3.5 percent, the "upper limit" is meant to prevent inflation.

Key 2013 economic indicators have turned out to be within the range, as China created more than 10 million new jobs and inflation came in at 2.6 percent for the whole year.

It is "a good report card" presented to China's leaders who took office in March last year, said experts.

STABILIZED PERFORMANCE

Monday's GDP data headed a string of other positive economic figures.

Retail sales growth slowed slightly to 13.6 percent in December from November's 13.7 percent, in line with market expectations.

"The slightly lower retail sales expansion is due to softer catering sales growth as the government continued to crack down on luxury consumption," said a note from a research team with the Bank of America Merrill Lynch led by chief China economist Lu Ting.

Fixed asset investment growth rose 19.6 percent in the whole of 2013, following the 19.9 percent expansion in the Jan.-Nov period.

"Growth in fixed asset investment is at decade lows as the Chinese government tries to steer the economy away from investment-led growth," said a research note from Moody's Analytics.

"We are likely to see a continuation of slower but more sustainable investment growth in 2014 as policy makers focus on rebalancing the economy to domestic consumption," said the research note.

Sheng said China's economic structuring is improving in 2013, with higher proportion of the tertiary sector, which took up a 46.1-percent share in the GDP structure, up from 44.6 percent in 2012 and exceeding the secondary sector for the first time.

Sheng said China adopted an innovative macro-economic management approach last year by defining "upper and lower limits" of the reasonable economic range, and addressing both current and long-term needs of the economy.

These efforts have enabled China to tide over the difficult period and put the Chinese economy on a more stable footing, according to Sheng.

FORECAST INTO 2014

The Chinese economy grew 7.7 percent in the final quarter of 2013, marking a moderate slowdown from 7.8 percent in the third quarter.

Zhang Liqun, an analyst with the Development Research Center of the State Council, said downside pressure still exists, citing deep-rooted problems including mounting local government debt and industrial overcapacity.

"The country should further promote reforms to release dividends and generate internal driving force of the economy," said Zhang.

"As the world situation improves, China's economic growth may pick up in the third and fourth quarter of this year," he said.

Lu Ting and his team are more optimistic. "It is very likely for GDP growth to rebound again in the first two quarters of 2014," said their research note. "The chance for it to rise to around 7.8 percent to 7.9 percent is quite high in the first and second quarter of this year."

--------------------------




Some interesting points to note:

- Annual inflation was low, at only 2.6%. This means there is a lot of room available for growth-boosting measures in the future, if it is needed.

- Our "services sector" is now larger than our "manufacturing sector" for the first time.

- Growth in "fixed asset investment" is at a decade low, which bodes very well for our "economic transition" away from an investment-fueled growth model, towards a more consumption-fueled growth model.

- Even though "percentage" growth rates have fallen to 7.7%, the enormous size of our base economy means that we are currently adding more to our economy every year than we have EVER done during our era of double-digit growth rates.

- In fact, 7.7% of $9.3 trillion is huge, we are adding more to our economy now than any other country on Earth, by a significant margin. We are even beating or own record that we previously set.

 

[Nike]

This was announced a few days back:

China economy grows 7.7 pct in 2013, beating government target - Xinhua

BEIJING, Jan. 20 (Xinhua) -- China's economy grew 7.7 percent in 2013, the same as 2012, overshooting the government target of 7.5 percent, according to the National Bureau of Statistics (NBS) on Monday.

Gross domestic product (GDP) totalled 56.9 trillion yuan (9.3 trillion U.S. dollars), the NBS said.

"China's economic performance stabilized in 2013 despite downward pressure both at home and abroad," said Ma Jiantang, director of the NBS at a press conference, citing encouraging GDP and job data as well as subdued inflation.

The Chinese government defined the "upper and lower limits" of the reasonable range of economic performance in 2013. With a GDP growth rate of 7.5 percent, the "lower limit" is intended to ensure steady expansion and employment, and with the consumer price index at around 3.5 percent, the "upper limit" is meant to prevent inflation.

Key 2013 economic indicators have turned out to be within the range, as China created more than 10 million new jobs and inflation came in at 2.6 percent for the whole year.

It is "a good report card" presented to China's leaders who took office in March last year, said experts.

STABILIZED PERFORMANCE

Monday's GDP data headed a string of other positive economic figures.

Retail sales growth slowed slightly to 13.6 percent in December from November's 13.7 percent, in line with market expectations.

"The slightly lower retail sales expansion is due to softer catering sales growth as the government continued to crack down on luxury consumption," said a note from a research team with the Bank of America Merrill Lynch led by chief China economist Lu Ting.

Fixed asset investment growth rose 19.6 percent in the whole of 2013, following the 19.9 percent expansion in the Jan.-Nov period.

"Growth in fixed asset investment is at decade lows as the Chinese government tries to steer the economy away from investment-led growth," said a research note from Moody's Analytics.

"We are likely to see a continuation of slower but more sustainable investment growth in 2014 as policy makers focus on rebalancing the economy to domestic consumption," said the research note.

Sheng said China's economic structuring is improving in 2013, with higher proportion of the tertiary sector, which took up a 46.1-percent share in the GDP structure, up from 44.6 percent in 2012 and exceeding the secondary sector for the first time.

Sheng said China adopted an innovative macro-economic management approach last year by defining "upper and lower limits" of the reasonable economic range, and addressing both current and long-term needs of the economy.

These efforts have enabled China to tide over the difficult period and put the Chinese economy on a more stable footing, according to Sheng.

FORECAST INTO 2014

The Chinese economy grew 7.7 percent in the final quarter of 2013, marking a moderate slowdown from 7.8 percent in the third quarter.

Zhang Liqun, an analyst with the Development Research Center of the State Council, said downside pressure still exists, citing deep-rooted problems including mounting local government debt and industrial overcapacity.

"The country should further promote reforms to release dividends and generate internal driving force of the economy," said Zhang.

"As the world situation improves, China's economic growth may pick up in the third and fourth quarter of this year," he said.

Lu Ting and his team are more optimistic. "It is very likely for GDP growth to rebound again in the first two quarters of 2014," said their research note. "The chance for it to rise to around 7.8 percent to 7.9 percent is quite high in the first and second quarter of this year."

--------------------------




Some interesting points to note:

- Annual inflation was low, at only 2.6%. This means there is a lot of room available for growth-boosting measures in the future, if it is needed.

- Our "services sector" is now larger than our "manufacturing sector" for the first time.

- Growth in "fixed asset investment" is at a decade low, which bodes very well for our "economic transition" away from an investment-fueled growth model, towards a more consumption-fueled growth model.

- Even though "percentage" growth rates have fallen to 7.7%, the enormous size of our base economy means that we are currently adding more to our economy every year than we have EVER done during our era of double-digit growth rates.

- In fact, 7.7% of $9.3 trillion is huge, we are adding more to our economy now than any other country on Earth, by a significant margin. We are even beating or own record that we previously set.

First, i will say congrats for China achievement

Second, you already beat all of other big three major Asia economies combined, say Japan, India and South Korea

 

[Kolaps]

Actually China economy grows beyond 7.7 percent if you add RMB appreciation against USD.

At first 9 months of 2013, RMB appreciated up to 6.3 percent.

Totally, in nominal term, China economy was actually grew around 14 percent. Just like 12 percent last year and 15 percent year before that. China economy is still growing double digit.

 

[Chinese-Dragon]

Actually China economy grows beyond 7.7 percent if you add RMB appreciation against USD.

At first 9 months of 2013, RMB appreciated up to 6.3 percent.

Totally, in nominal term, China economy was actually grew around 14 percent. Just like 12 percent last year and 15 percent year before that. China economy is still growing double digit.

Sure, if you're talking about "nominal GDP growth", we are still growing in double-digits. Since nominal GDP growth takes into account inflation and currency appreciation.

But when we talk about growth, we usually talk about the real growth rate. Which doesn't count inflation or currency appreciation.

Our real growth rate of 7.7% is remarkable I think. I thought that once our economic base size became this high, we wouldn't be able to achieve such rates. In fact, experts are expecting our GDP growth rate to actually increase this year!

And once our "economic transition" into a consumption-fueled economy is complete, we will hopefully be able to maintain this growth rate. That would be really amazing if possible.

 

[tranquilium]

Nice to hear. I am still waiting for the overall national economic survey beginning in March. This should yield some interesting results.

 

[faisal6309]

Congratulations China

 

[Chinese-Dragon]

Congratulations China

Thanks buddy.

Nice to hear. I am still waiting for the overall national economic survey beginning in March. This should yield some interesting results.

Hey brother, what do you think of our low inflation and high interest rates? There seems like a lot of room to boost growth.

I think maybe 7-8% is the most we want to grow right now, to prevent imbalances.

No other country has sustained such a high growth rate for so long, especially at such an enormous economic base size. There could be hidden dangers, since no one has taken this path before.

If we can sustain a 7-8% growth rate for the next decade, that would far surpass my expectations. That would be truly amazing.

 

[liall]

9.3 alright onto 10 and beyond baby!!!

 

[Chinese-Dragon]

And Chinese officials have admitted that our GDP numbers are in fact grossly underestimated.

We are soon due for a revision in the method we use to calculate GDP.

The West (especially America) also accuses us of keeping the Yuan at an artificially low value. If that is true, that would also mean our nominal GDP is again vastly underestimated.

 

[genmirajborgza786]

$9.3 trillion is huge ! congrats China

 

[Chinese-Dragon]

Here is an article which shows how much the Chinese GDP is being underestimated:

(Credit to cirr for first posting this article).

Reuters - China households elude taxman - and official GDP bean-counters

BEIJING Wed Jan 22, 2014 4:00pm EST

BEIJING Jan 23 (Reuters) - China's famously frugal households may be living larger than they are letting on.

Economists have long warned that China needs to pump up domestic spending to offset an over-reliance on credit-fuelled investment and exports for growth, and in their latest blueprint for reform China's leaders have vowed to do just that.

Data released this week showing China's economy grew 7.7 percent last year suggested the imbalance is worsening, with consumption unchanged at just under 50 percent of GDP, but investment growing to slightly more than half.

A growing number of economists, however, say official statistics have got it wrong. To avoid taxes, consumers routinely get employers to buy things for them, resulting in a gross underestimation of how much consumers spend and exaggerating just how lopsided China's $9.4 trillion economy is.

"China's consumption is not low," said Zhu Tian, an economist at the China Europe International Business School in Shanghai, who co-authored a recent report on the subject. "It's actually desirable," he said.

Government estimates put household spending at roughly 36 percent of GDP, the result of a long decline from 49 percent in 1978. Household consumption in Thailand, which is slightly poorer than China in terms of GDP per citizen, is 56 percent of GDP, according to the World Bank. In the United States, households spend the equivalent of 69 percent of GDP.

But Zhu and other economists say government estimates overlook trillions of yuan in hidden household spending, particularly among China's increasingly affluent middle class. Add that and household spending amounts to about half of GDP, and more than 60 percent when combined with government spending, according to Zhu's study, which was published in September with Zhang Jun from Fudan University's China Center for Economic Studies.

The implications are far-reaching, at least statistically. If Zhu and Zhang are right, not only do consumers represent a larger part of China's economy than thought, but estimates of China's vaunted household savings rates may be inflated, investment's dominance may be overstated and China's economy may be larger than current estimates.

The government may also be due a lot of income tax.

Zhu and Zhang go even further, saying that their findings challenge the notion that consumption is inadequate, a problem analysts and policymakers, including the World Bank, have blamed on inadequate social safety nets such as unemployment and health insurance.

REFLEXOLOGY AND SING-ALONGS

Collecting data on consumption is challenging in any developing country because so many of the things people buy are informal services not captured by tax authorities, such as foot massages, karaoke sessions or food from street vendors.

"All of these issues with statistics are common to fast-growing economies," said Bert Hofman, chief economist for East Asia and the Pacific at the World Bank in Singapore.

China's statistics have drawn their fair share of brickbats from economists, who have resorted to a host of exotic alternatives - from consumption of salt to sales of imported Audis - to gauge the true health of the second-largest economy.

China's National Bureau of Statistics declined to comment, though it has in the past conceded it may be underestimating consumption. It plans to revise the way it calculates GDP as early as this year.

"After the correction," said Hofman, "China will look a lot more normal - more balanced, some would say."

In the meantime, economists say poor data collection paints an excessively bleak picture of consumption. One problem is sample size: China's statisticians base their estimates of household spending in this nation of 1.35 billion people, or 402 million households, on surveys of just 100,000 households.

Then there is the way they add up expenditures. Take housing costs. China tallies data on how much households pay in rent, but uses outdated values to calculate the value of housing to home owners.

PERQUISITE REPUBLIC

But the list does not end at rent. To compensate for lower wages, companies in China routinely lavish employees with gifts ranging from mobile phones and household appliances to luxury cars and vacations.

"This happens all the time, and of course it is not the right way," said Helen Qiao, an economist at Morgan Stanley in Hong Kong.

By taking part of their pay in undeclared perks, employees lower their taxable income and companies reduce their taxable profits. Perks are particularly popular among those Chinese with the biggest tax liabilities - its wealthy.

And while these items are for personal use, once a company pays for them instead of a private household, the expense is classified as a business cost and left out of consumption and GDP.

Omissions like that missed 7 trillion yuan ($1.2 trillion) worth of household spending in 2009, Zhu and Zhang estimate in their report. Morgan Stanley's economists calculated last year that government statisticians missed roughly $1.6 trillion in spending in 2012, meaning household consumption was actually equivalent to 46 percent of GDP.

But even at 50 percent of GDP, China still needs to get households to consume more domestic services if it wants to create a viable and growing middle class, said Kevin Lai, an economist at Daiwa Securities in Hong Kong.

"You can forever keep investing in new capacity, but where is the demand?" Lai said. "At the end of the day, you need to find demand to feed that capacity."

To Zhu, however, China's consumption levels are already healthy; it is Beijing's emphasis on boosting consumption that needs re-examination.

"All the talk about China investing too much and consuming too little is meaningless," he said. "The focus of change should be on improving equity and the efficiency of investment, not stimulating consumption."

 

[Ayush]

congrats guys.

 

[A Town]

Congrats, larger than Japan, India and South Korea combined!!

 

[Chinese-Dragon]

Congrats, larger than Japan, India and South Korea combined!!

Well, we have the number 1 biggest population on Earth, so we should have been the number 1 economy a long time ago.

Never too late to make up for past mistakes though.

Hopefully we will become the very first country in the world to become a developed country with a population of more than a billion. That will be an incredible record to achieve.

 

[jaunty]

we will become the very first country in the world to become a developed country with a population of more than a billion.

You don't have much of a competition there, do you?