CHINA, you may have heard, announced its latest growth figures on Thursday. The speed of growth attracted most of the attention, but the source of growth is perhaps more striking. At a press conference (in Chinese; see an FT report here), the
National Bureau of Statistics pointed out that in the first three
quarters of this year consumption* contributed over half (55%) of
China's growth, exceeding the contribution from investment. If that
pattern holds, China's growth this year will not be investment-led (let
alone export-led), but consumption-led.
So far, this revision seems to have passed largely unnoticed by
China-watchers. (Andy Rothman of CLSA is one notable exception. See also
the FT's Lex
column.) People are accustomed to the idea that investment is the
principal engine of China's extraordinary expansion. That notion is one
of the most familiar "stylised facts" about its economy. But this
revision of the figures suggests a restyling of the facts is now due.
That hasn't happened for over a decade. Or so I thought. Until recently,
the official statistics showed that investment made the biggest
contribution to China's growth in every year since 2001. But earlier
this week the new edition of the China Statistical Yearbook arrived on
my desk with a thud. Its revised figures show that consumption
contributed 55.5% of China's growth in 2011; investment contributed only
48.8%. (Net exports subtracted 4.3%.) In other words, China's growth
was consumption-led last year as well.
.
* Consumption includes government consumption as well as household consumption.
** These calculations refer not to consumption's share of GDP (C/GDP), but to its share of GDP growth (ΔC
/ ΔGDP). Consumption is still unusually low (and investment unusually
high) as a share of China's GDP. But as long as consumption's
contribution to growth exceeds its share of GDP, that share will rise.