China GDP: provinces aim for higher growth as country looks to bounce back from economic impact of Covid
- So far 21 provincial governments have set a target of growing their economies between 5 and 6.5 per cent
- The country is expected to miss its target for last year as strict Covid controls weighed down the economy
Most Chinese provinces have set a 2023 growth target of between 5 and 6.5 per cent, indicating a relatively optimistic outlook as the country looks to rebound from Covid-19.
The targets come as the world’s second largest economy is seeking to stabilise its growth, employment and price levels, and policymakers have vowed to get the economy back on track after falling short of last year’s growth target.
Three of China’s top five economic provinces – Guangdong, Shandong and Zhejiang – aim for a gross domestic product growth rate of “above 5 per cent”, while Henan, the fifth largest, hopes to achieve around 6 per cent, according to their annual work reports.
Another economic powerhouse, Jiangsu, has not yet convened its local party congress or released its targets.
Many provinces said they aimed to boost consumption, the private economy and manufacturing investment as a way of boosting growth and a time when overseas orders are expected to fall as a result of the potential recession in developed markets.
While the central government is due to announce its national targets – for GDP, the fiscal deficit ratio, the consumer price index, energy intensity and technological input – during March’s parliamentary session, provincial targets provide a glimpse into Beijing’s development goals and policy priorities.
So far, 21 of the 26 provinces to announce growth targets aim for a rate of between 5 and 6.5 per cent.
At least 22 provinces suggested a consumer price control target of 3 per cent this year, while 17 of them aim to cap the urban jobless rate at 5.5 per cent. Both targets mirror last year’s national goals.
Tianjin, an old industrial base 120 kilometres southeast of Beijing, has the lowest target so far of around 4 per cent.
The southernmost island province of Hainan, which the central government wants to develop as a free-trade port, has the highest target of around 9.5 per cent.
GDP growth is the widely watched economic parameter, and the impact of Covid-19 has weighed on the economy for the past three years.
Markets largely anticipate a national growth rate of above 5 per cent this year, but some state researchers have predicted a faster rate.
A forecast from the Chinese Academy of Sciences published on Thursday said the annual growth rate may be around 6 per cent, but the figure for the first quarter could be as low as 4.2 per cent because of the current Covid outbreak.
While the recent lifting of pandemic controls will boost service sectors such as travel, catering and delivery services, the academy said consumption will ultimately be determined by incomes and jobs, and especially the confidence of private enterprises and market entities.
The Civil Aviation Administration of China said on Friday that air travel volume has recovered to 63 per cent of the figure for the same period in 2019. Meanwhile, the number of train passengers between January 7 and 12 totalled 221 million, or half the 2019 level.
“We believe that consumer sentiment will be weak in the first quarter. Consumers are more likely to be spending money on healthcare services than general shopping,” Iris Pang, ING’s chief Greater China economist, wrote in a note.
“There is a need for fiscal support, especially in the first three months of the year.”
The National Bureau of Statistics is due to release 2022 growth figures on Tuesday.
The country is estimated to have grown by around 3 per cent last year, missing its target of around 5.5 per cent.