The year of dragon is nearing its end as 2012 is concluding. What have we turned in in terms of economical performance in the year 2012?
The GDP growth of mainland China is going to reach 7.5% at least, a very coveted number by most countries. However, it reflects a slow down from previous years. The situation in Taiwan is even worse. The latest estimate of Academia Sinica of Taiwan is at 0.93%. Hong Kong is not doing much better. The current estimate is at 1.2%. The Macau economy is expected to see a growth of 9.8 percent this year thanks to gambling revenues. But it is still a slow down compared to the previous two years.
The decrease in growth is definitely a global phenomenon, not merely confined to Chinese communities. 2013 will certainly see some improvement as the numbers in a lot of countries have hit the bottom, like near zero growth. If the worst has not happened, we are in a recession with negative growth and shrinking economy.
Will this really happen? Although quite unlikely, not entirely impossible. If the overall consumption goes down, the economy will not grow. There are several factors that will lead to this shrinkage. Aging for one. As the population age, the wants and needs might decrease. Older people might need fewer fashionable clothing and might need fewer luxury items. Fewer births would put a dent on the needs from youngsters. Young people are usually more willing to buy stuff to satisfy their wants in addition to their needs. With the economic downturn, the unemployment rates are high for young adults around the world. This adds to the magnitude of decrease in consumption.
Maybe decrease in economic growth is inevitable as the population is aging. Nonetheless, it does not mean we cannot enjoy our living with happiness. The secret still lies in equity. So long as we all earn enough money to make a decent living, a smaller economy might be able to sustain a more aged population.
The problem right now is still the inequity in the distribution of wealth. As indicated in the ILO report, the labor wages go down even in the face of increasing productivities, which means the fruit of growth is predominantly enjoyed by the capitalists. As a result, the wealth concentrates on fewer and fewer people and the whole society suffers. In terms of GDP growth, the dragon year has poor performance. However, maybe this is the year the world started to pay more attention to the equity in the distribution of wealth and had risen up to do something. And in this sense, the dragon year is not that much a disappointment after all.