Economy Feb 05

China’s provinces aim for over 6% GDP growth this year

Aside from Hebei and Heilongjiang – which have been hit by re-emergence of Covid-19 – and yet to release economic targets, 29 of the 31 provinces, regions and municipalities on the Chinese mainland are targeting GDP growth higher than 6%

China’s provinces aim for over 6% GDP growth this year
Hubei, which was ravaged by the coronavirus last year, is hoping to see 10% economic growth this year. File photo: AFP.

(ATF) Most of China’s provinces are targeting economic growth of at least 6% this year, with Hubei, epicenter of the coronavirus outbreak last year, and Hainan free-trade port, expecting to hit double digits.

Aside from Hebei and Heilongjiang provinces – which have been hit by sporadic re-emergence of Covid-19 – and are yet to release their economic targets, 29 of the 31 provinces, autonomous regions and municipalities on the Chinese mainland are targeting GDP growth higher than 6%, according to local government work reports.

These give an indication of what could emerge when the National People’s Congress meets in March, when economists will be watching closely for a growth target after Beijing failed to set one last year amid the pandemic. An adviser to the central bank also said recently the practice should be dropped.

HUBEI WANTS 10%

Hubei province, the first Chinese province hit by the Covid-19 pandemic and hit by a strict lockdown of more than 70 days early last year, suffered economic falls of 39%, 19%, and over 10% in the first three quarters and ended 2020 with full-year GDP contracting by 5%.

Based on a relatively low GDP figure, Hubei is aiming for at least 10% GDP growth in 2021, Governor Wang Xiaodong said in its local government’s work report. The former Covid-19 epicenter wants to add more than 700,000 jobs and reduce its unemployment rate to about 6%, he said.

Meanwhile, Hainan, the tropical island province dubbed “China’s Hawaii”, is also targeted to grow by over 10% in 2021, after growth of 3.5% last year.

Last June, China released a master plan to make the island province a global duty-free trading centre by 2050, to give the province a chance to enjoy extra growth. 

Leveraging its strategic position, Hainan will strive to exceed 60 billion yuan ($9.3 billion) in tax-free sales this year, a rise of more than 80% year-on-year, Acting Governor Feng Fei said last month during the fourth meeting of the Sixth People’s Congress in Hainan.

The 2021 offshore duty-free sector is expected to be boosted by a continuing recovery from the pandemic, plus more offshore duty-free licence holders, and the impending introduction of a new policy allowing Hainan residents to buy certain items duty- and tax-free without leaving the island.

The province will also open 160 new domestic and international air routes bringing the total to 646 within five years. That will increase the number of accessible cities to 200 and the passenger throughput to 60 million.

THREE FASTEST-GROWING PROVINCES

Tibet led the 2020 growth rate among the 31 provincial-level regions, with growth of 7.8%, followed by southwestern provinces Guizhou and Yunnan, which recorded rises of 4.5% and 4%, respectively. 

The three regions have set upbeat outlooks for 2021 - Tibet's GDP growth target is over 9%, while Guizhou and Yunnan are aiming for around 8%. 

The world's second largest economy grew 2.3% in 2020, when the country decided not to set an annual growth target due to the repercussions from the pandemic. 

Last year, Guangdong, Jiangsu and Shandong were China’s top economic performers, with GDP volumes of 11.08 trillion ($1.7 trillion), 10.27 trillion ($1.6 trillion) and 7.31 trillion ($1.1 trillion), respectively, and growth rates equal to or above the average.

CONSERVATIVE TARGETS

Last week, the International Monetary Fund (IMF) said China's economy is likely to expand by 8.1% in 2021 while the global economy was forecast to expand by 5.5%.

Only eight out of 29 Chinese provinces have set their GDP growth targets at 8% or above, which seems conservative compared with the IMF’s forecast. 

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China's opportunities and challenges in 2021 and beyond

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