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Ed Zhang

Authorities last week released statistics on the economy's overall performance in 2011.
In the National Bureau of Statistics' (NBS) preliminary report, gross domestic product was 47.16 trillion yuan (HK$58.03 trillion), showing annualised growth of 9.2 per cent. 
By comparison, according to an NBS correction in September, the mainland's 2010 GDP was 40.1 trillion yuan, based on growth of 10.4 per cent from the previous year. 
The mainland press spotted a few trends in the economy in 2011. One to watch is inflation, according to a commentary on Ce.cn, a government-owned website focusing on economic policies. The year saw a rise in the consumer price index, a major measure of inflation, of 5.4 per cent, despite continuous good harvests of agricultural staples. 
That exceeded the government's overall price control target, made at the beginning of the year, by almost 1.5 percentage points. 
A second trend, noted by National Business Daily, was the possible decline in foreign direct investment (FDI), partly due to diminishing capital in developed countries and a rapid rise in China's own wages. FDI has long been a driving force for China's export-led business growth.  
But over the last two months of 2011, China saw a net decrease in FDI. There was a 9.76 per cent year-on-year decline in November, which the country had not seen for the previous 28 months. This was followed by an even bigger decrease of 12.73 per cent in December. 
The government needs to take stock of its policies, National Business Daily said. Causes of the drop in FDI might include excessive government intervention in the market, particularly when it favoured monopolies enjoyed by state-owned enterprises. This would only harm the fairness of competition, it said. 
A third trend, according to independent financial commentator Ye Tan , was that government revenues (mainly from business and income taxes) rose faster than GDP and net national income. 
For the first time, government revenue exceeded 10 trillion yuan last year, according to Ministry of Finance figures, an increase of almost 25  per cent from 2010. This boost in income did not just flow into the central government's coffers - many provinces, municipalities and autonomous regions reported similar gains. 
Ye, however, thinks that governments taking such a large cut from the economy may not be a good thing, and could be driving away many wealthy families, along with their assets. 
She noted that from 2001 to 2004, emigration by wealthy mainlanders grew roughly 10 per cent a year. It doubled in 2005-2006,  and may have grown by 50 per cent a year since 2007.  
The exodus of wealth is unfortunate for the mainland, Ye pointed out, because it does not help its domestic consumption, or industrial reinvestment.
A fourth trend, which may have a stronger long-term significance, was urbanisation.  In another first for the mainland, the number of urban residents (690.8 million) was greater than rural residents (656.6 million).  
The 1.3 per cent rise in the urban population may not have looked huge in percentage terms, but Ce.cn pointed out that the countryside lost 14.6 million residents while the cities gained 21 million - almost the population of Taiwan or Australia. This was 'a change too fast,' it said, which may translate into rising wages and greater pressure on resource conservation and environmental protection. 
As for 2012, many economists agreed that mainland GDP growth would be lower still. It is partly because the quarterly GDP pattern showed a downward trend throughout 2011, from 9.7 per cent year on year in the first quarter to 8.9 per cent in the last quarter. 
This year's GDP growth would probably be between 8.5 and 8.7 per cent, China National Radio quoted Zhang Jianping , an official with the National Development and Reform Commission.



Lower growth is on the cards, alongside other worrying trends