GDP miracle results in per capita myth

• Source: Global Times
• [02:08 December 09 2009]
• Comments

By Chen Chenchen

Ordos (or Erdos), to most Chinese, is a brand of high-quality cashmere sweater, and not the remote city in China's Inner Mongolia.

The sweater's TV advertisement, with the familiar pitch, "Warm the entire world," takes us to the lush grasslands that have inspired eclogues and is home to the Khatag scarves, milk tea and some of the finest wines. Few would compare Ordos with Hong Kong.

However, an official did make the surprising comparison. Lian Ji, vice-chairperson of the People's Government of Inner Mongolia Autonomous Region, said Tuesday that "China develops fastest in the world, Inner Mongolia grows fastest in China, and Ordos grows fastest in Inner Mongolia. The per capita income of Ordos will soon surpass that of Hong Kong."

Lian's expectation was not entirely without a basis. Statistics show that the GDP of Ordos soared from $2.2 billion in 2000 to more than $29.3 billion in 2009, thanks to the exploitation of the region's rich natural resources. With a thin population of 1.6 million, the city's per capita income is predicted to touch $18,500 this year. Given Hong Kong's estimated per capita income of $29,600 in 2009, Ordos may manage the miracle of surpassing Hong Kong in a few years at current growth speed.

Sadly, no one in Ordos is celebrating yet. In the past eight years, the disposable income of city dwellers in Ordos grew at a lazy annual rate of 10 percent while the government's fiscal revenue expanded by 30 percent every year. Last year, a commoner in Ordos had only $237 to spend each month, less than one-fifth of a typical Hongkonger's disposable income. It seems that local residents haven't tasted the benefits of Ordos' economic miracle.

That is because of the way Ordos achieved its economic miracle. The city is a typical example of living off the fat of the land.