China’s Provinces Mostly Project Slowing Growth in 2020
(Bloomberg) — Most of China’s provinces are projecting slower economic growth in 2020, underlining a nationwide trend that is expected to result in a tweaking of the formal goal when the legislature meets in March.
Twenty-two of 31 major cities, provinces and autonomous regions have so far cut their 2020 targets for growth of gross domestic product, according to their work reports laying out plans for this year. Twelve provinces, accounting for 42% of China’s economic output through September last year, projected growth of around 6% or lower this year. An additional nine provinces forecast expansion this year of 6%-6.5%.
The nation’s economy is on a gradually slowing trajectory. The National People’s Congress is expected to approve a 2020 target of around 6% in March, lower than the 6.1% result for 2019 announced last week. Even with slowing growth, output grew 5 trillion yuan ($729 billion) last year, an increase bigger than Switzerland’s GDP.
However, there’s substantial regional variation, with less-developed Jiangxi growing around 8.5% last year and Tianjin, near Beijing, managing a 4.5% expansion. That beat only Jilin, in the struggling rust belt in the northeast of the country, which grew around 3.5% last year.
Tianjin, which has been plagued by debt problems, defaults and misstatement of economic data, expects its woes to continue. The province’s growth went from the fastest in China at the end of 2013 to the slowest in 2018. It’s forecasting growth of around 5% this year.
Even with lower targets, it isn’t assured that provinces will hit their numbers. At least nine provinces didn’t meet their goals in 2019, including Jiangsu, Jilin and neighboring Heilongjiang.
The overall growth target is usually delivered along with detailed economic plans at the annual legislative meeting. Sichuan and Yunnan haven’t yet announced their growth targets for 2020.
The government revised up the annual growth rates for 2014-2018. That means that the economy will need to expand only about 5.5% in 2020 to reach the long-term goal of doubling GDP and income from the 2010 level, according to a note from Founder Securities and Guanghua School of Management.
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