China's No. 2 but it's not celebrating

Aug 18, 2010

It's a developing country with more than 40m poor people, says govt
BEIJING: China may have overtaken Japan as the world's No. 2 economy in the second quarter, but the Chinese government said yesterday that the country still has millions of poor people.
'China is a developing country,' Commerce Ministry spokesman Yao Jian told reporters. 'The quality of China's economic development still needs to be raised. It needs more effort to improve economic quality and people's lives.'
It was the government's first public reaction to news on Monday that China overtook Japan in economic output in the April to June quarter.
Many expect China to become the world's No. 2 economy this year, just behind the United States, taking the title Japan has held for 40 years and underscoring its emergence as an economic power.
While China has seen double-digit expansion in gross domestic product (GDP) for years, Japan's growth rates have been comparatively low.
On Monday, Japanese data showed that while Tokyo was ahead of its Asian rival in the first half, its second-quarter GDP was US$1.28 trillion, behind China's US$1.33 trillion reported earlier.
But in per capita terms, China lags far behind Japan. With a population of 1.3 billion, it had a per capita income of US$3,600 (S$4,900) last year, compared with Japan's US$37,800.
China also has more than 40 million people living below its official poverty line, Mr Yao said.
'We should care not only about the GDP data, but also about per capita GDP,' he said at a regular news briefing.
'We still have an enormous gap to make up.'
Chinese state media insisted that China, while contributing to global growth and helping to drive the world's recovery from the financial crisis, was still transforming itself into a world-class economic power.
'China's economic strength is still at the level of a developing nation. So the world's second-largest economy is not the equivalent of the second-largest economic power,' the People's Daily said in a commentary.
In just three decades, China has leapfrogged Britain, France and Germany on its economic ascent and has won developing countries a bigger say in the World Bank and International Monetary Fund.
However, the official China Daily said in an editorial: 'The Chinese economy still has a lot more room to grow and can contribute even more to the global recovery.
'But for those who expect China to assume greater international responsibilities just because of the size of its economy, they should take a hard look at the enormous development challenges that the country still faces.'
The Chinese government is in the midst of a marathon effort to spread prosperity from its thriving eastern cities to the poor countryside and the western region.
It is also trying to defuse tensions over a huge wealth gap between an elite group, which has benefited most from three decades of reform, and the poor majority.