For politicians and peasants, China’s 7.4 percent GDP growth in 2014 is a happy outcome. Not so for the all-important demographic of middle-class city dwellers. The scene is set for a year of urban struggle.
China hasn’t missed a GDP target since 1998, according to ANZ, which makes the slight deviation from its 7.5 percent objective significant. The message accompanying the country’s slowest growth rate in 24 years is that fixed goals have become a little less binding. That’s enough to please reformists without frightening the Party faithful.
Urbanisation, another target, continues apace. A further 18 million people flocked to China’s sprawling cities in 2014. However, keeping them happy once they get there is getting harder. While rural disposable incomes grew at a real rate of 9.2 percent last year, the 6.8 percent increase for urbanites lagged behind the overall expansion in the economy for the second year running. Public transport price hikes in Beijing, and cab driver strikes in several big cities, point to a world where the rising cost of living is beginning to bite.
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