China's economy ended tepid 2012 with uptick Dramatic shifts lie ahead for the world's second-largest economy, as China's economic growth slows, its working-age population decreases and an indicator warns of a dangerously high imbalance between rich and poor. An annual year-end recounting of major economic numbers showed that China's economy grew at its slowest rate in more than a decade last year, finishing the year at 7.8 per cent overall, though a greater than expected fourth-quarter surge of 7.9 per cent is thought to bode well for at least the first half of 2013. "The overall national economic performance [has been] stabilized," Ma Jiantang, commissioner for China's National Bureau of Statistics, told a press conference, after referring to an "increasingly complicated and severe international situation." The country's total value of imports and exports grew more slowly than in the previous year, up 6.2 per cent year on year, far missing an earlier government target of 10 per cent. But perhaps more significantly, the number of 15- to 59-year-olds in China dropped for the first time ever last year, by 0.6 per cent or 3.45 million people, an indication of a looming demographic crisis brought on by its three-decade-long, one-child policy. Economists and academics have warned that this shrinking, aging work force may limit China's ability to change itself from a developing to fully developed nation: in essence, becoming old before it becomes rich. Mr. Ma said China must focus on creating a higher-quality, more flexible work force as it prepares for the future. Officials also for the first time in a decade revealed an official measure of the country's Gini coefficient, an index that measures income inequality in which 0 is perfect equality and a reading of 0.4 or higher indicates risk of social unrest. China, after hitting a high of 0.491 during the 2008 economic crisis, now sits at 0.474, officials said. Though Chinese academics have previously warned the number is likely much higher, the admission is significant as formal acknowledgment of the large and growing gap between the rural poor and the urban middle class and wealthy in this country of 1.35 billion people. Though average incomes are growing overall, there remains a large gap between rural and urban families. The per capita income of urban households grew 12.5 per cent year-on-year to an average 26,959 yuan per year ($4,279 U.S.). Though rural households saw their income increase faster, by 13.5 per cent, it remains on average a fraction of their urban counterparts" earnings, at 7,917 yuan ($1,256) per year. Still, there are signs of life - industrial production was up 10 per cent, though that was slightly lower growth than the previous year, while retail sales grew 14.3 per cent year on year. Stock markets in Asia reacted positively to the news with Shenzhen, Shanghai and Hong Kong bourses all closing up; crude oil futures rose, as did copper prices on the London Metals Exchange. The upturn has a little bit more to run. Growth is likely to accelerate further in the first half of 2012 but slow mildly in the second half so that growth for 2013 as a whole will come close to 2012. This is due to the relatively restrained pace of stimulus as the government is keen to avoid a spike of lending and also inflation," wrote economist Alaistair Chan at Moody's Analytics. There were a numerous references to stability. A reference to improving the quality and efficiency of growth suggests increased emphasis on reducing pollution and wasteful investment.