Chinese economic powerhouses set less ambitious GDP goals for 2023

Guangdong and Zhejiang provinces both predict their economic growths will be ‘above 5 per cent’ this year, after falling well short of last year’s targets amid zero-Covid
As China looks to bounce back from challenging 2022, authorities of the manufacturing hubs vow to step up support for private sector and create jobs

China GDP

Salina Li

Published: 11:00pm, 12 Jan 2023

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With the country as a whole setting out to heal its Covid-ravaged economy after a difficult year, two of China’s economic powerhouses have set less ambitious targets for their economies in 2023 while still vowing to create jobs and support the private sector.

The provinces of Guangdong and Zhejiang – big manufacturing hubs where private firms are hallmarks of the local economies – both put their growth targets at “above 5 per cent” for this year after missing last year’s goals due to China’s hardline zero-Covid policy, according to the two provinces’ parliamentary meetings on Thursday.

As export hubs and major engines powering China’s economy, their gross domestic product (GDP) growth targets could help shed light on this year’s national economic growth goal, which the central government will announce during the national legislative gatherings in March.

“The [Zhejiang] government will exhaust all measures to push for export growth and work with enterprises in expanding external markets and securing more orders,” provincial authorities said in their report on Thursday.

They projected that Zhejiang’s GDP, which accounts for about 7 per cent of the national economy, grew by 3 per cent last year – or half of the 6 per cent goal that it had set for last year.

And Guangdong, the country’s largest regional economy, which accounted for 10.9 per cent of the national economy in 2021, is expected to have grown by 2 per cent last year, missing its target of 5.5 per cent and marking its slowest growth rate since the pandemic began in 2020. That would put its 2022 GDP at 12.8 trillion yuan (US$1.89 trillion), equivalent to the GDPs of South Korea or Canada.

“We plan to introduce a new batch of billion-dollar-level programmes to attract foreign investment,” Guangdong authorities vowed on Thursday, adding that the security and resiliency of industrial and supply chains will be enhanced. “We will unveil guidelines to promote private economic development … We will support micro, small and medium-sized companies.

“The private economy is the main force supporting Guangdong’s economy. Local governments at all levels should proactively address difficulties for private companies and boost their confidence.”

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China is set to have missed its original GDP growth target of “around 5.5 per cent” for last year, as repeated coronavirus-induced lockdowns across the country took a heavy toll on manufacturing activities and business confidence in the Chinese market.

But having abandoned its zero-Covid policy, with a gradual reopening of its border, the economy is widely expected to recover this year.

And while analysts expect that the nation still has a bumpy road ahead of it amid the transition to living with Covid, policymakers are still expected to set another GDP growth target of around 5 per cent for 2023.

The similar targets set by Zhejiang and Guangdong seem to further reinforce such countrywide projections, but the provinces’ growth goals are lower than those set by Shanghai at 5.5 per cent and eastern China’s Jiangxi province at 7 per cent.

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Both Wang Weizhong, governor of Guangdong, and Wang Hao, governor of Zhejiang, said in their work reports to the regional People’s Congress on Thursday that their 2022 growths did not come easily. But looking forward, they vowed to restore exports, consolidate their footholds in hi-tech and supply chains, and revitalise confidence in their private sectors.

Home to the Pearl River Delta Economic Zone and the Guangdong-Hong Kong-Macau Greater Bay Area, Guangdong also pledged to bolster the city-cluster programmes this year, including by strengthening its transport links with Hong Kong and Macau.

Wang Weizhong said his province will “actively promote the construction of the Greater Bay Area”, while working more closely with Hong Kong and Macau in their development strategies.

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He said Guangdong will “join hands with Hong Kong and Macau to connect global high-end innovative talent”, while also striving to make it easier for talent to live in one of those areas while working in another.

Local officials are prioritising a post-coronavirus recovery this year after China pivoted away from its hardline zero-Covid policy and shifted the focus to bolstering the economy. And they intend to ramp up support for new energy and tech industries such as semiconductors, as the country is also aiming to climb up the industrial and supply chains.

Wang Weizhong also said Guangdong is aiming to consolidate the strengthening of hi-tech, manufacturing and exports, and will promote the relocation of industries from the Pearl River Delta region to less-developed parts of the province.