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11.1 Percent Growth in Beijing for 2005

Beijing's gross domestic product (GDP) grew 11.1 percent to 681 billion yuan (US$85 billion) in 2005, according to figures from the Beijing Municipal Statistics Breau (BMSB).

Yu Xiuqin, deputy head of the BMSB, said the capital city's 2005 per capita GDP rose to 44,969 yuan (US$5,457), up by 8.1 percent over 2004. This indicates that Beijing residents' incomes have grown to levels seen in moderately developed countries such as Malaysia or Thailand. Primary (agriculture), secondary (manufacturing) and tertiary (service) industries contributed to 1.4 percent, 30.9 percent and 67.7 percent of Beijing's GDP in 2005, compared to 2.5 percent, 32.7 percent and 64.8 percent in 2004. The rise of the tertiary sector suggests that the structure of Beijing's economy now resembles that of a developed country. Since the city won the bid to host the Olympic Games five years ago, fixed-assets investment has risen to 1.1 trillion yuan  (US$137 billion), double that of the previous five-year plan period (1995-2000). Investment in the property market contributed to more than half the total at 597 billion yuan (US$74.1 billion), three times more than in the previous plan.

There were 15.38 million permanent residents in the capital city in 2005, 453,000 more than in 2004. Beijing added an average of 349,000 new permanent residents each year. Vrban residents of the Chinese capital saw their disposable incomes increase by an average of 11.2 percent in real terms to 17,653 yuan (US$2,191) per capita. Farmers' net incomes per capita grew by 8.1 percent to 7,860 yuan (US$975.8).

In 2005, total retail sales of consumer goods rose to 290.28 billion yuan (US$36.04 billion), a 10.5 percent increase over 2004.

Beijing's consumption of energy resources last year was equal to 55 million tons of standard coal, down by 3.9 percent year-on-year.

In 2005, the Engle Coefficient, the proportion taken by expenses on food to families total living expenses, fell by 4.5 percentage points and 3.9 percentage points to 31.8 percent and 32.8 percent in urban and rural areas. Song said that according to the UN Food and Agriculture Organization (FAO) an Engle Coefficient above 59 percent denotes poverty, 50 percent-59 percent means people have adequate food and clothing, 40 percent-50 percent indicates that people are well-off, while people living within an area with a 30 percent-40 percent Engle Coefficient are considered rich and those below 30 percent are the richest of all.

A Beijing citizen spent about 500 yuan (US$62.1) on food every month, which is considered normal.

The real estate sector boomed, growing at a speed of 19.7 percent annually during the past five years, which was 7.4 percentage points faster than the average increase for the tertiary industry. Real estate activity accounted for 7.2 percent of the local GDP in 2005, compared with 4.6 percent in 2000. Investment in real estate development slowed by 19 percentage points to 3.5 percent and its share of total fixed-asset investment in the city shrank to 53.9 percent in 2005 from 58.3 percent in 2000.

Yu attributed the cooling in real estate investment to Beijing's strict implementation of the Chinese Government's macrocontrol policy governing the use of funds and land. In 2004, 58 percent of the investment in Beijing went to the property sector and that was the highest in the country.

Yu believes that the national policy of the real estate industry for the future is very clear. The purpose of the adjustment, or the control, Yu said, is to make sure that the industry will develop steadily and moderately; the housing sector is still one of the pillars of the urban economy.