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China’s provinces vow to meet GDP targets despite growth slump

BEIJING (BLOOMBERG) – Several Chinese provinces pledged to meet their growth goals for the year, even as top leaders downplayed the national target of “around 5.5 per cent” after repeated Covid-19 outbreaks and a property market slump.

At least 10 local governments explicitly said they will strive to hit their gross domestic product targets, and at least another seven said they will keep the goals in mind and do their best, an analysis of official reports published by the provinces shows. Several others pledged efforts to stabilise the economy.

Economic powerhouse Guangdong province, which had the biggest GDP of China’s 31 regions last year, said it aims to expand its economy by around 5.5 per cent this year. Growth reached only 2 per cent in the first six months of the year, which implies the province’s economy will need to expand by around 9 per cent or more in the second half of the year to achieve the full-year goal, according to Bloomberg calculations.

The province said it will “earnestly shoulder the political responsibility of stabilising the macro economy”, according to a read-out of a regular provincial government meeting in July.

It will “go all out to push for a good economic growth in the third quarter and strive to achieve the annual economic development goals”, it added.

None of China’s provincial-level jurisdictions’ economic growth rates in the first half of the year surpassed their respective full-year targets. The national economy grew just 2.5 per cent during the period, well below the annual goal.

China’s senior leaders have been de-emphasising the significance of the GDP growth target in the face of mounting economic pressure. At a top-level Politburo meeting last month, they softened the tone on the growth target and concluded that the country should achieve “the best outcome” possible for economic growth.

In the same week as the Politburo meeting, leaders told government officials that the growth goal should serve as guidance rather than a hard target that must be hit, according to people familiar with the discussions.

Many provinces have not given up on hitting their full-year targets, even some of the smallest economies like Ningxia and Shaanxi. But they also rarely acknowledged how difficult it would be to hit their goals – one exception being the north-eastern province of Liaoning, which concluded at a July meeting that it “must be soberly aware that it is very arduous to complete the annual goals and tasks set by the provincial people’s congress”.