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A Turning Point in China's Development
Tao Wang
Managing Director
Head of China Economic Research
May 2012
Relatively weak household consumption
Share in GDP (%)
Household consumption plus housing purchase
75
Household consumption
Household disposable income
70
65
60
55
50
45
40
35
30
25
1992
Source: CEIC, UBS estimates
2
1995
1998
2001
2004
2007
2010
Why is China’s saving rate so high?
Gross saving (% of GDP)
60
Government
50
Corporate
Household
40
30
20
10
0
1992
Source: CEIC, UBS estimates
3
1996
2000
2004
2008
The results of heavy industrialization
Industrial sales (% of GDP)
200
180
Heavy industry
160
Light industry
140
120
100
%
14
80
60
Industrial profits margin (% of sales)
12
Industrial profits as % of GDP
40
10
20
0
8
1990
1995
2000
2005
2010
6
4
2
0
Source: CEIC, UBS estimates
4
1990
1995
2000
2005
2010
Wage growth and labor productivity
Grow th rate of industrial sector（%）
30
25
20
15
10
5
0
-5
Unit labor cost
Nominal w age
-10
Productivity
-15
2001
Source: CEIC, UBS estimates
2003
2005
2007
2009
2011
China’s next decade: labor transfer incomplete
Share in total (%)
Share in total employment (%)
90
Urbanization ratio
90
80
Non farming share in employment
80
70
70
60
60
50
50
40
40
30
30
20
20
10
10
1980 1985 1990 1995 2000 2005 2010 2015 2020
Source: CEIC, UBS estimates
6
China’s potential for capital deepening
Real Capital Stock per capita (in 2000 USD)
200,000
Japan
180,000
160,000
140,000
120,000
US
100,000
80,000
Korea
60,000
40,000
Taiw an
20,000
China
0
0
10
20
30
40
Agriculture as % of total employment (%)
Source: CEIC, Haver, UBS estimates
7