Shoots of growth in rust-belt Chinese province but little to entice investors
A northern Chinese rust-belt province bounded into growth in 2017 as it reversed a long-running decline and confirmed that some officials had made up economic data.
Liaoning governor Tang Yijun said on Saturday that the province’s economy grew 4.2 per cent to 2.39 trillion yuan (US$378 billion) last year, reversing continued falls since 2011.
In his annual work report to the provincial legislature, Tang also said Liaoning’s fiscal revenue rose by 9.4 per cent to 419.8 billion yuan during the period.
Liaoning trailed national growth of 6.9 per cent in 2017 but it was the province’s best performance in two years mainly because of a low base. In 2016, Liaoning reported unprecedented negative growth of 2.5 per cent.
Once a thriving industrial base, Liaoning has struggled with a population exodus and ailing state-owned enterprises, and had little to entice private and foreign investors. Only a quarter of companies in northeast China were profitable in 2016, compared to a third in central and eastern China, according to the China Society of Market Supervision.
Economic growth has been key factor in political promotions and the authorities confirmed in 2017 that officials in cities and counties across the province had repeatedly inflated economic figures.
The doctoring reached a peak in 2014, when some local authorities inflated their fiscal incomes by as much as 23 per cent.
Then, in 2015, Liaoning reported a shocking double-digit decline in government income and 3 per cent growth, the lowest since 1993 and the slowest of any province.
Tang said the province still faced many obstacles, including weak fixed-asset investment, a lack of innovation, a small private economy, government and corporate debt risks, and corruption.
In the first 11 months of 2017, fixed-asset investment fell by 3.6 per cent to 614.5 billion yuan, according to the Liaoning Statistics Bureau.
The province is aiming for 6.5 per cent growth this year, the same target it set for last year.
Tang said this year’s top priorities were clearing housing inventory in some counties, involvement in the “Belt and Road Initiative” to foster foreign investment, and raising spending on research and development to 2 per cent of provincial GDP to encourage innovation.
Also in the northeast, Heilongjiang reported 6.4 per cent growth for the year and Jilin 5.3 per cent.
Eight of the country’s 31 provincial-level authorities reported growth below the national average in 2017, with Gansu and Tianjin the worst performers on 3.6 per cent.
Tianjin, a major part of China’s Beijing-Tianjin-Hebei urban integration plan, is the latest region to come clean about cooking the books.
Binhai New Area, the city’s economic zone, admitted this month that it inflated its GDP figure by a third in 2016. After excluding the figures for companies that were registered but not operating in the area, Binhai’s GDP was only 665.4 billion yuan in 2016, instead of the 1 trillion yuan it previously stated.