China Towns Raise Growth Targets, Bucking Xi MandateBloomberg News
Three towns in China’s export hub of Guangdong province raised annual growth targets by as much as 5 percentage points as they seek to counter local weakness while other regions aim for slower, more-sustainable expansion.
Dalang, about 100 kilometers (62 miles) north of Hong Kong, will expand investment and pursue growth of 12 percent this year, compared with a 7 percent target set in January, the official Nanfang Daily reported on March 29. Neighboring Houjie boosted its goal to 7.5 percent from 6 percent, while Nancheng increased its target to 12 percent from 8.5 percent, the official Dongguan Times reported April 2.
The towns, all part of Dongguan city in the Pearl River Delta, are grappling with a local slowdown as labor costs rise and export orders slow. Their stepped-up expansion goals contrast with lower targets for the province as a whole and across the nation, reflecting new President Xi Jinping’s call to focus on “quality and efficiency” of growth.
“It shows the growth-above-all mindset of local Chinese government officials hasn’t fully changed, and the central government has to do more,” said Zhang Zhiwei, chief China economist at Nomura Holdings Inc. in Hong Kong and a former researcher for the International Monetary Fund.
Guangdong, the largest regional economy, set an 8 percent growth target for 2013, down from 8.5 percent in 2012 and the nation’s second-lowest goal this year after 7.5 percent in Shanghai.
Growth is still the key measurement in cadres’ performance reviews and it will take many years before China can change the system, Zhang said. Dongguan, which has set a 7 percent goal for gross domestic product growth in 2013, was among the slowest-expanding regions in China with a rate of 6.1 percent in 2012.
Fourteen provinces have set lower targets for GDP expansion this year than in 2012 and the other 17 left their goals unchanged, according to Nomura. The weighted average target has dropped to 9.9 percent from 10.3 percent, Citigroup Inc. calculates.
Last month, then-Premier Wen Jiabao set a 7.5 percent national growth target for 2013, unchanged from last year’s goal. Wen’s successor, Li Keqiang, said at a March 17 press briefing after taking office that China needs 7.5 percent annual expansion to achieve the country’s 2020 goals.
Chinese provinces are known for reporting growth rates that often exceed the national pace calculated by the central government. The combined GDP released by Chinese provinces for 2012 was 5.8 trillion yuan more than the countrywide figure published by the National Bureau of Statistics, according to the state-run China Daily.
China’s economy, the world’s second-largest, expanded 7.8 percent last year, compared with the average 10.6 percent rate over the previous 10 years. Economists surveyed by Bloomberg News forecast a pickup to 8.1 percent in 2013, based on the median estimate.
— With assistance by Xin Zhou