SCIO briefing on China's economy in H1
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E-mail China.org.cn, July 16, 2019
China News Service:
According to a recent NBS report, China's per-capita GDP has surpassed $9,700. This had led some people to believe that China has escaped the middle-income trap. What's your view on this issue? Thank you.
Mao Shengyong:
Thank you for the question. First of all, the NBS is working on a series of reports that shows the achievements of China's economic and social development over the past 70 years. Three of the reports were recently released, and have won positive responses. There are still nearly 20 reports to be released. Please continue to follow us in this regard.
Second, the sum you mentioned in our first report was $9,732 to be accurate, and it was last year's per-capita gross national income (GNI). This index is different from GDP. GDP refers to the total added value produced by the permanent entities in a country or region in a period. It reflects economic growth from the perspective of production. In contrast, GNI was previously known as gross national product (GNP). The name was changed in 1993. It reflects the distribution of income among residents, government and enterprises. In 1993, the United Nations and some other international organizations adopted this name when revising statistics, because they found the name GNP not accurate for the concept. From then on, GNP has been gradually replaced by GNI.
Third, GNI and GDP are also related to each other. For instance, GNI is calculated on the basis of GDP. It is the sum of GDP plus the net income earned by foreign entities. Previous statistics show that there was no big difference between China's GDP and GNI, as the former was just a little higher than the latter. Please note that GNI is also different from resident disposable income, as the former consists of the net incomes of government, enterprises, residents and foreign entities. It is obviously much higher than the latter.
Fourth, you asked a question that many people are also eager to know the answer to. According to the standards of the UN, China is in the upper-middle income group. It must be admitted that after the rapid development over the past 40 years, China's economic situation and international status have improved remarkably, with the Chinese economy ranking second in the world. However, the per-capita income of the country has remained low. Figuring out when China will become a high-income country depends on many factors. Whether a country is a high-income country is decided by the status of other countries. When we will become a high-income country should be decided by our economic growth rate, price level, the development of other countries, as well as the exchange rates of the yuan, U.S. dollar and other currencies. Besides, international organizations may also change the methods of classification. Therefore, instead of discussing whether and when China can be ranked as a high-income country, we'd better focus on promoting economic development, improving people's livelihood and income, upgrading our economy and making it more efficient, so as to strive for high-quality development. Thank you.
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