China GDP: headwinds from coronavirus, property market slump see provinces lower economic growth targets for 2022

The provinces of Zhejiang, Anhui, Chongqing, Sichuan and Hunan this week lowered their economic growth targets for 2022

The less ambitious goals underscore the challenges facing China’s economy, including the coronavirus and a property market downturn

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China’s economy is facing pressure from coronavirus outbreaks and a property market downturn, among other challenges. Photo: Xinhua

Published: 3:16pm, 19 Jan 2022

A number of Chinese provinces have lowered gross domestic product (GDP) growth targets for 2022, as well as expectations for consumption and trade, in the latest sign that Beijing may resort to its old playbook of state-led investment to maintain economic stability.

After the National Bureau of Statistics on Monday revealed China’s GDP grew 8.1 per cent in 2021, and warned about growing economic headwinds, five provinces – Zhejiang, Anhui, Chongqing, Sichuan and Hunan – lowered their growth targets for the year.

China’s economy faces a host of challenges, including sporadic coronavirus outbreaks that continue to weigh on consumption, a property market downturn, supply shocks that have driven up the cost of raw materials, and tensions with Western nations.

The country is also hosting the Winter Olympics and the Communist Party’s 20th National Congress this year.

That some provinces have begun revising down their growth targets underscores the difficulties ahead for the world’s No 2 economy, which saw the pace of growth slip in the fourth quarter of last year.

Zhejiang, the country’s fourth largest provincial economy, which is home to tech giant Alibaba, set a GDP growth target on Monday of “around 6 per cent” this year, compared to last year’s 6.5 per cent and an actual growth rate of 8.5 per cent.

“We’ll expand effective investment by pushing forward key projects to provide adequate growth momentum for high-quality development,” its acting governor Wang Hao told the province’s top legislative body on Monday.