Page 10 - TreasuryChinaTrust2011

Business Landscape
National GDP growth at 9.2% for 2011, whilst a slow-down in terms of that recorded for 2010 (10.4%), still represents
a very healthy outcome for China in a year in which the government exer ted considerable pressure through the
implementation of various policy initiatives to slow down the economy.6
With China having passed the 50% urban threshold for the first time in late 2011 (26% in 1990), government projected
GDP growth of 7.5% for 2012 will continue to feed the desire of the Chinese consumer. This is supported by income
growth, which in real terms rose 8.4% for the urban dweller during 2011 (>14% in nominal terms before the impact of
inflation), representing the 11th consecutive year that urban incomes rose more than 7% in real terms. Government
policies in recent years seeking to meaningfully impact the rural environment has translated into 5 consecutive years of
more than 8% p.a. income growth and 2011 witnessed growth of 11.4% in real terms.6
National Retail Sales
China’s Urban Disposable Income Growth China’s Rural Disposable Income Growth
Source: China National Bureau of Statistics
0
5,000
10,000
15,000
20,000
25,000
Q1 2006Q2 2006Q3 2006Q4 2006Q1 2007Q2 2007Q3 2007Q4 2007Q1 2008Q2 2008Q3 2008Q4 2008Q1 2009Q2 2009Q3 2009Q4 2009Q1 2010Q2
2010
Q3 20
10
Q4 2010Q1 2011Q2 2011Q3 2011Q4 2011
RMB
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Urban Disposable Income per capita Nominal Income YoY Growth
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Q1 2006Q2 2006Q3 2006Q4 2006Q1 2007Q2 2007Q3 2007Q4 2007Q1 2008Q2 2008Q3 2008Q4 2008Q1 2009Q2 2009Q3 2009Q4 2009Q1 2010Q2 2010Q3 2010Q4 2010Q1 2011Q2 2011Q3 2011Q4 2011
RMB
0%
5%
10%
15%
20%
25%
Rural Cash Income per capita Nominal Income YoY Growth
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Jul-06 Dec-06May-07Oct-07Mar-08Aug-08Jan-09Jun-09Nov-09Apr-10 Sep-10Feb-11Jul-11 Dec-11
RMB Billion
0%
5%
10%
15%
20%
25%
Monthly Retail Sales (RMB Billion) Monthly Nominal YoY Growth
Inflation, a real sticking point during much of 2011 ended the year recording a level of 4.1% in December well of f the high
of 6.5% in July 2011. Whilst it is likely to increase from this level in early 2012, which has been a common factor for many
years, primarily related to the impact of Chinese New Year and the winter months, it is not expected to reach the highs of
2011 during 2012 and accordingly the government has established a target of 4.0% for 2012.
With respect to the property market, the government by and large met its aims for the year with a substantial increase in
starts for social housing, whilst constraining price growth in the private housing market.
6 Source: China National Bureau of Statistics
08
Chairman’s Statement
SAR1112034_TCT_AR_().indb 08 3/23/2012