Explainer | China GDP: with the ‘pressure on’, what do local economic targets say about the 2022 national outlook?

All 31 of China’s provincial-level jurisdictions have released their economic growth targets for 2022, most of which are conservatively low. They do offer a clue about the national outlook with China expected to set its gross domestic product (GDP) growth target for 2022 in March. The targets also offer a perspective on the health and structure of the world’s second largest economy at a time when Beijing is warning about mounting headwinds. China’s better-than-expected economic growth last year of 8.1 per cent moved it a step closer to surpassing the United States as the world’s leading economy, although Beijing has reiterated that it is “not interested” in that. Who was China’s best economic performer last year? The economy of the central province of Hubei, where the coronavirus was first identified over two years ago, grew by 12.9 per cent in 2021. This was the largest growth rate among all regions, and exceeded the national level of 8.1 per cent. The province also beat its target of above 10 per cent growth for last year. China ‘not interested’ in becoming world’s No 1 economy, global hegemony Its growth rate last year would have put it top of all major economies in the world, according to the latest World Economic Outlook issued by the International Monetary Fund (IMF) last month, beating Turkey’s 11 per cent and Argentina’s 10 per cent. In value terms, Hubei’s GDP rose to 5 trillion yuan or US$775.2 billion based on the official annual average exchange rate. This would exceed Taiwan’s GDP of US$772.7 billion and would only be moderately lower than Turkey’s estimated GDP of US$795.95 billion. Hubei would have ranked as the 22nd largest economy in the world in 2021, according to the IMF database, although it was only the eighth largest economy in China last year. However, Hubei’s robust growth rate in 2021 followed a reading of minus 5 per cent in 2020 as it was hit hard by the impact of the coronavirus. Hubei last month set a 2022 GDP growth rate target at “above 7 per cent”, down from its target of 10 per cent growth for last year, which represents the largest drop of all the 31 provincial-level jurisdictions. Who was the worst economic performer in China last year? The northwestern province of Qinghai grew by only 5.7 per cent in 2021, which was the slowest growth rate among all jurisdictions. It failed to meet its target of above 6 per cent growth for 2021. Qinghai’s growth rate last year was slightly lower than Italy’s 6.2 per cent expansion, according to the IMF report. Chinese city facing ‘win or die’ situation after economy failed to grow in 2021 The province’s GDP last year was US$51.9 billion based on the official annual average exchange rate. This would put it below Azerbaijan’s estimated US$52.6 billion, but higher than Jordan’s estimate of US$45.3 billion. Qinghai would have been ranked as the 87th largest economy in the world last year. Which province has the highest per capita GDP in China? The capital city of Beijing saw its per capita GDP rise by 12 per cent last year from a year earlier to around 183,900 yuan, or US$28,505, based on local economic and census data. If it were a country, the reading would be higher than estimated US$27,927 of Kuwait but lower than Slovenia’s US$28,939, putting it 40th according to the IMF database. Beijing’s per capita GDP is dwarfed by the estimated US$49,485 of Hong Kong, but is above the high-income threshold of US$12,696 defined by the World Bank in 2020. IMF cuts China growth forecast amid pandemic, property sector pressure Of China’s 31 provincial-level regions, 11 reached the high-income economy standard last year, while the national average rose to US$12,551. The northwestern province of Gansu had the lowest per capita GDP last year at US$6,340, or just 22 per cent of Beijing’s. In terms of overall GDP, the province of Guangdong was the largest economy in China last year at US$1.92 trillion. This would see its economy pass South Korea for the first time and would see it ranked in the top 10 globally. But it is still only around 60 per cent of the size of California, which is the largest economy in the US, and it would be ranked as the third largest state in the US. Who has the most ambitious growth rate target for 2022 in China? The province of Hainan has set an economic growth rate target of “around 9 per cent” for this year. This is the highest target in the country, but still lower than its goal of above 10 per cent for 2021 and lower than its growth rate of 11.2 per cent last year. Compared with 2021, 25 provinces have set a lower GDP growth target for 2022, which is the highest ratio since 2015, according to analysts at Zhongtai Securities. The pressure on the economy is evident Zhongtai Securities “The pressure on the economy is evident,” they said last month. China’s national GDP growth rate target is expected to be announced during the “two sessions” in March, when Premier Li Keqiang delivers the annual government work report. China’s three largest economies of Guangdong, Jiangsu and Shandong, plus Shanghai, have all set GDP growth targets of “around 5.5 per cent” or “above 5.5 per cent” for this year, while Beijing has set a goal of “above 5 per cent”. “We’ve seen provinces and cities give their growth estimates for 2022 … I am confident that China’s growth rate will be around 5.5 per cent,” said former vice finance minister Zhu Guangyao last month.