We’ve received a pretty disappointing set of Chinese economic data today. GDP grew at the slowest pace in six years while industrial production, retail sales and urban fixed asset investment all came in far below market expectations. More can be found here.
There was some good news to come from the data if you’re a Chinese policymaker, however.
It’s no secret that authorities are attempting to change the composition of the Chinese economy. They’re looking to move away from a reliance on heavy industry and infrastructure spending, to an economy with greater levels of household consumption. Generally, amongst other things, people having extra money in the back pocket can only assist in this transition.
On household disposable income the NBS said this:
Based on the integrated household survey, in the first quarter of 2015, the national per capita disposable income was 6,087 yuan, a nominal growth of 9.4 percent, or a real increase of 8.1 percent after deducting price factors. In terms of permanent residence, the per capita disposable income of urban households was 8,572 yuan, a nominal growth of 8.3 percent, or a real growth of 7.0 percent. The per capita disposable income of rural residents was 3,279 yuan, up by 10.0 percent nominally, or 8.9 percent in real terms. The median of national per capita disposable income was 5,216 yuan, a nominal increase of 11.1 percent. By the end of February, the number of rural migrant workers was 163.31 million, decreased by 6.02 million, down by 3.6 percent. The average monthly income of migrant workers was 3,000 yuan, up by 11.9 percent year-on-year.
In other words urban households saw their disposable income grow by 8.3% in the past year, even higher in rural areas. While low by Western standards – 8,572 yuan equates to a tick over A$1,800 – for a nation of over 1.3 billion people, such levels of growth, if sustained, will help the shift to an economy driven more by consumption.