Chart of the Day: China’s Provinces Show Caution in Setting More Ambitious GDP Targets
Provincial governments in China have showed caution about setting more ambitious GDP growth goals for 2021 despite the low baseline due to the Covid-19 pandemic, official data show.
The World Bank has forecast bullish 7.9% economic growth for China this year, significantly above the sluggish 2.3% level achieved in 2020, which nonetheless made it the only major economy to expand last year. In 2019, China’s GDP grew 6%.
As of Thursday, 29 of 31 provincial governments on the Chinese mainland have set this year’s GDP targets. The majority have set growth goals lower than the World Bank’s nationwide projection, let alone the International Monetary Fund’s (IMF) forecast for an 8.1% rise.
Nine regions, including wealthy Beijing, Shanghai and Guangdong, as well as poorer Liaoning and Inner Mongolia, aim to achieve around or above 6% GDP growth in 2021, the lowest targets among all provincial governments.
The government of the Inner Mongolia autonomous region cites lingering uncertainties stemming from both the pandemic and the external environment as challenges. The northeastern rust-belt province of Liaoning warns of weak links in its economy, such as corporate debt burdens and problems in the business environment that create obstacles to growth.
Another 11 regions’ targets fall between around 6.5% and above 7.5%. Liaoning’s neighboring Jilin province set a goal of a 6%-to-7% rise in GDP.
Only eight provincial governments set targets at 8%, around 8% or even higher. The highest target was set by the Hubei and Hainan governments as the two are aiming for GDP growth to surpass 10%.
Hubei province, the early epicenter of China’s domestic Covid-19 outbreak, is looking for a major bounce back after suffering a 5% drop in GDP in 2020, when it was the worst-performed region in economic terms. That extreme low base is key to the provincial government’s optimism.
High expectations for the southern island province of Hainan are driven by policymakers’ strategy to turn the island into a globally influential free trade port.
The Hebei and Heilongjiang governments have yet to announce GDP targets for 2021.
Contact reporter Guo Yingzhe (email@example.com)
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