To help you better understand the whole picture of Chinese economy, now let us start with a little background information about our GDP target first. From historical data source, China 2010 GDP was RMB 39.798 trillion. Primary sector contributed a reduced percentage of 10.2% in 2010 (was 10.3% in 2009), secondary sector still contributed the most significant percentage of 46.9% in 2010 (was 46.3% in 2009) and tertiary sector contributed the rest 43% in 2010 (was 43.4% in 2009).
Although China GDP value of RMB 39.798 trillion stated above already surpassed Japan since 2010 Q2 and has become the world number two after the U.S., related datum showed that Chinese economic growth formula was still unbalanced, too heavily depended on its strong secondary sector (mainly manufacturing industry), and thus should develop more on tertiary sector (services industry).
How We Predict This 2012 GDP Target (or Economic Growth Target)?
In 2011, China GDP growth rate was +9.2% YoY, better than our original target of +8% YoY. Since Chinese GDP could successfully 'keep +8%' at least, it appeared that Fear of Economic Hard Landing could be temporarily eased.
However, if you look more closely at the latest trend, China GDP growth rate was +8.9% in 2011 Q4 and had indicated fourth consecutive quarter of slowdown in economic growth. Just like the previous year, our independent economic expert team has predicted the fair values of 2012 final goods and services should produce within PRC (People's Republic of China) and put them into the GDP formula. Based on our calculations, China 2012 GDP will grow by +8%. Such 2012 calculated target can be regarded as an extension to our GDP target last year because all the fundamentals can apply towards 2012 and it just happened that the rate of economic slowdown in 2011 was slower than we expected. Our calculated target also shows that we should expect a slower economic growth in 2012 than that in 2011.
Key assumptions in 2012 are:
(1) Europe (Germany, France, Italy, U.K. etc) and America (USA and Canada) developed economies will remain weak for 2012.
(2) It is our expectation that 2012 Chinese domestic economy will experience a slowdown. Similar shall apply to other emerging BRICS (Brazil, Russia, India and South Africa) economies as well, while other Asian (Japan, South Korea, Singapore, Indonesia etc) economies shall remain relatively stable.
(3) China State Council finalized the Annual Central Financial Conference on 7 January 2012 already and has showed determination to keep economic growth fast in PRC.
This +8% should of course be our initial release of target value for 2012 China GDP (Gross Domestic Product) economic growth, we may downgrade/upgrade this 2012 target shall the related domestic or even the worldwide economic environment may suddenly change later.
More China Economic Target(s):
Table of All Our Published Targets for China