Some of China’s provincial governments have just released new GDP growth targets that mark a significant decline compare to 2017.
The third week of January saw many of China’s provincial governments hold congressional representative meetings and release their government work reports, including Anhui, Jiangxi and Shanghai.
The meetings and reports have held consistent with the theme of “high-quality growth” set by China’s central government toward the end of last year, with a number of provincial governments dialling down their GDP targets.
The Anhui province government work report sets an economic growth target of 8% for 2018, for a year-on-year decline of 0.5 percentage points.
Xinjiang province has changed its economic growth target from “at least 7%” in 2017 to “around 7%” for the current year, with the phrasing reflecting a considerable loosening in the official stance towards GDP expansion.
In eastern China Shanghai and Jiangxi province have set growth targets of 6.5% and 8.5% for 2018, which remain unchanged from last year.
Shanghai mayor Ying hong said in the municipality’s government work report that the emphasis this year would be on further raising the “quality” and benefits of economic growth.”
Zhang Peng (张鹏), an economic researcher with the China Academy of Social Sciences, said to Shanghai Securities News that the dialling down of economic growth targets by local governments was a clear indication that they were gradually easing the pace of GDP growth, and would focus more energy on adjustments to the economic structure.
Observers including the IMF and former PBOC officials have recently made calls for China to abandon its GDP targets completely, due to the distortionary effect they can have on the economy by incentivising the country’s’ regions to pursue credit-fuelled growth.
While the GDP growth figures for China’s provinces have traditionally exceeded the nationwide figure due to tinkering on the part of local governments, in 2017 local data evinced a growth slowdown in regional economies compared to 2016.
Tianjin province saw its GDP growth drop by 5.4 percentage points to 3.6% in 2017 from 9% in 2016, hitting its lowest level since 1989.
Guizhou province – which has been one of China’s fastest growing regions for the past seven years, saw its growth ease by 0.3 percentage points to 10.2% in 2017, in a year when China’s national GDP growth posted its first uptick since the turn of the decade.