According to the National Bureau of Statistics, 92.3% – or 8 percentage points – of China’s 8.7% GDP growth in 2009 came from investment. Consumption contributed 52.5%, or 4.6 percentage points, and net exports brought growth down 44.8%, or 3.9 percentage points. The data are not surprising, following from the last year’s huge stimulus-led rise in fixed-asset investment, but they do contain a few interesting points. In particular, the ability of China’s economy to grow despite the negative contribution of net exports illustrates that while exports are important, the country is more than the sum of its exporters.
Still, the data also indicate clearly that Beijing will need to engineer an exit from stimulus spending; the ratio of investment to GDP in 2008 was 41.1%. The government’s goal has long been to encourage economic growth based on strong domestic consumption; officials including Vice Premier Li Keqiang have reiterated this in recent weeks. However, as with its attempt to gradually slow bank lending, it will need to do so in a way that doesn’t hold back economic growth overall, especially as exports, though recovering, remain weak. Infrastructure firms and others that benefited greatly from stimulus funds will not see a major impact on existing projects, but new project approvals may slow.