Economists sceptical of 9pc growth target for Guangdong

PUBLISHED : Saturday, 23 December, 2006, 12:00am
UPDATED : Saturday, 23 December, 2006, 12:00am

They say lower predicted GDP figure is just window dressing

Guangdong officials say they hope to keep the province's gross domestic product growth at 9 per cent next year, but local economists say they are paying lip service to state efforts to slow the mainland's economy.

Provincial Governor Huang Huahua revealed the 9 per cent target on Thursday during an address to provincial and municipal chiefs at a party congress in Guangzhou, according to yesterday's Nanfang Daily.

Guangdong's GDP has been growing by at least 12.5 per cent annually since 2003 and, according to Mr Huang, this year's growth rate is expected to be 14 per cent, with GDP totalling 2.58 trillion yuan.

Mr Huang said the lower target could prompt governments to concentrate more on economic restructuring in the interests of sustainable development rather than just impressive figures, the report said. He was also quoted as saying the low target could ease pressure on resources and the environment.

Guangdong's economic development has mainly been fuelled by processing and fixed-asset investment. Analysts have warned in recent years that various factors including resource shortages and the appreciating yuan mean the economic model must be fine-tuned.

But Cheng Jiansan , deputy head of the Guangdong Academy of Social Sciences' Institute of Economics, said the target was only for appearances.

'I don't think the provincial government really plans to slow its economic growth given that every province is competing to produce higher growth numbers.'

He said Guangdong had set a 9 per cent goal at least four times in the past five years, but that its actual growth rates had always far outstripped the target.

Mr Cheng agreed Guangdong's export trade would be squeezed by the higher yuan and changes to state policy on export tax rebates, but he said the factors would cut the province's GDP growth only by about 1 percentage point.

He estimated Guangdong's GDP would continue to grow by an average of 12 per cent in the coming few years. 'I hope the government can really plan to slow down the [economic] growth to create room for economic restructuring,' he said.

Ding Li , another academy economist, expressed a similar hope but said it would be impossible to shift to the lower rate in one year. 'I hope this will be different from the 9 per cent [targets] of the past several years.'

In Thursday's speech, Mr Huang also said Guangdong had reduced emissions of sulfur dioxide, a major pollutant, by 1.9 per cent in the past year and cut the chemical oxygen demand, an index reflecting water pollution, by 1.2 per cent.

He also said the province had cut energy consumption per unit of GDP growth by 3 per cent this year and the administration was aiming for a similar reduction next year.

He said the province would cancel all compulsory education charges from next September.