China GDP: city in eastern Anhui province facing ‘win or die’ situation after economy failed to grow in 2021
- Bengbu city had set a gross domestic product (GDP) growth target of 8.5 per cent last year compared to the national goal of ‘around 6 per cent’
- But while China posted a full-year growth rate of 8.1 per cent, Bengbu’s economy did not grow last year as all its major indicators missed their targets by a large margin
A city of just over 3 million people in China’s eastern province of Anhui is facing a “win or die” situation after the former fishing village reported no economic growth in 2021 despite a strong push to transform its economy.
The pressure of a stalling economy, development dislocation, and structural imbalance, has become prominent, and it has reached the critical moment of to win or die
“Since last year, Bengbu city has made new achievements in promoting innovation and development, strengthening the city industry by industry and reforming and opening up,” said Anhui’s provincial party secretary Zheng Shanjie earlier this week after a meeting with local officials.
“However, the pressure of a stalling economy, development dislocation and structural imbalance, has become prominent, and it has reached the critical moment of to win or die.”
Bengbu had already warned earlier this month that an “unsustainable industrial transformation and upgrading” and problems of verifying statistics and poor data quality meant the growth rate of major economic indicators was lower than expected.
“Slow progress is no progress,” Zheng added in comments published by the Anhui Daily on Wednesday, while he also urged local government officials to urgently upgrade Bengbu’s old industries.
In its previous economic work reports, the Bengbu government cited a lack of large enterprises and mega projects to support high-quality development as among the key problems facing its economy.
Like many other Chinese cities, Bengbu’s economic growth has been slowing, falling from 5.1 per cent in 2019 to 3 per cent in 2020.
“Right now, we are facing a serious growth problem,” said Yu Yongding, a prominent Chinese economist and former central bank adviser in a virtual seminar organised by Peking University on Wednesday.
“If we don’t get a relatively high growth rate, it’s difficult to move forward [to tackle structural issues].”
After 2021 brought China record trade, what’s in store for 2022?
Premier Li Keqiang said on Thursday that China will roll out more steps to boost effective demand as the economy faces new downward pressure and increased uncertainties, according to state media.
On Friday, Zhu Guangyao, an adviser to China’s cabinet, said the country will be able to achieve an economic growth of around 5.5 per cent in 2022.
This is due to increasing pressure from sporadic coronavirus outbreaks, a property market downturn, supply shocks that have driven up the cost of raw materials and tensions with Western nations.
China has been looking to upgrade its industries amid strong competition from Southeast Asian countries, while facing increasing restrictions from the United States amid its push for a greater share of the hi-tech manufacturing sector.
This has left regional economies struggling to recover from the impact of the coronavirus, leading to growing divisions between regions.
Anhui is part of the Yangtze River Delta Economic Zone, but its economy has lagged behind its coastal neighbours of Jiangsu, Shanghai and Zhejiang.
The province’s per capita GDP was 63,426 yuan (US$9,994) in 2020, 12 per cent lower than the national average, according to a research report by US rating agency Moody’s.
In the past decade, Anhui has been moving away from traditional farming towards agro-processing, Moody’s said, as the share of agriculture in its economy declines.
