Overall GDP Growth Not Enough: Experts
    2011-02-15 13:56:59     CRIENGLISH.com      Web Editor: Xu
 

Japan's Economics Minister Kaoru Yosano speaks at a press conference in Tokyo, on Feb. 14, 2011. Japan's economy shrank an annualized real 1.1 percent in the fourth quarter of 2010, marking the first contraction in five quarters, the Cabinet Office said Monday. [Photo: Xinhua/AFP]

" The (rural-urban income) gap will continue to widen in coming years, if effective measures narrowing it are not implemented, such as tax increases on the rich which should be put in force. I think it is one of the most urgent and toughest social problems in China. "

" Hu Jintao has made comments on this. And the government had pledged a package of measures to improve income distribution including increasing farmers' income. "

... ... ... ...

China surpassed Japan to become the world's second largest economy last year, according to Japanese figures released Monday.

However, the country has a long way to go in terms of per capita income and narrowing the income gap, experts warned.

Japan's nominal gross domestic product hit 5.474 trillion U.S. dollars in 2010, which only secured a third spot in the world, behind the United States and China.

China's nominal GDP for last year has come in at around 5.9-trillion U.S. dollars, previous media reports said.

Japan's Economics Minister, Kaoru Yosano, said he welcomed China's advancement as the world's second-biggest economy.

This is the first time that Japan slipped to the world's third largest economy since 1968. In the past two decades, Japan has been stuck in stagnation and deflation.

According to official figures released by Japan's cabinet office, Japan's economy did grow in the calendar year of 2010, but only by 3.9 percent, which is its first annual growth in three years, while China's economy is expected to grow more than 10 percent.
 
However, because of China's massive population, the country's per capita income still lags far behind Japan's per capita GDP when purchasing power differences between each country are taken into account.

"Our economy surpassed the Japanese economy, but our average GDP per capita is only one eleventh of the Japanese economy. So we cannot be satisfied only with the total GDP. China's economic prosperity is still relatively smaller", said Sang Baichuan, professor and director of World Economy Institute at Beijing-based University of International Business and Economics.

Economists and observers also noticed and warned that the income gap keeps expanding in China.
Mark Huges, executive business editor of China Daily, said China has seen a widening rural-urban income gap since the country launched reforms and opening policy in 1978.

"The (rural-urban income) gap will continue to widen in coming years if effective measures narrowing it are not implemented such as tax increases on the rich which should be put in force. " he made the remarks during an interview with China Radio International on Tuesday, "I think it is one of the most urgent and toughest social problems in China."

The Chinese government has realized that not everyone has benefited from GDP growth and the income gap has the potential to cause instability.

Mark Huges noted, "Hu Jintao has made comments on this. And the government had pledged a package of measures to improve income distribution including increasing farmers' income."

China surpassed Germany to become the world's third largest economy four years ago.

by Xu Leiying

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