Quality of growth put ahead of speed, experts say
Chinese provinces that have released their GDP growth targets for 2018 so far have either lowered their economic growth goals compared with 2017, or have set the same targets.
This shows a trend in which local governments are more inclined to focus on the quality of economic growth than the speed, experts told the Global Times on Thursday.
Fourteen provinces and regions have revealed their GDP growth targets for 2018 in their government work reports released during provincial "two sessions" meetings.
The local "two sessions" - annual meetings of provincial lawmakers and political advisors - discuss local economic and social development in the past year and make plans for the year to come.
Nine provinces and regions have lowered their economic growth targets for 2018. For example, North China's Tianjin Municipality set a 5 percent GDP growth goal for this year, compared with 8 percent in 2017.
Northwest China's Gansu Province set a target of about 6 percent in 2018, down from the 7.5 percent growth goal in 2017.
Central China's Hubei Province also lowered its GDP growth target slightly from about 8 percent in 2017 to 7.5 percent for 2018.
There are also provinces that plan to maintain the same economic growth speed in 2018. East China's Jiangxi Province has targeted GDP growth of about 8.5 percent in 2018, the same as the goal for 2017.
Can't be like the past
Liu Xuezhi, a senior expert in macroeconomics at Bank of Communications, said that as the domestic economy is slowly transforming from an investment-driven model to a consumption-driven model, it will be very hard for the Chinese economy to maintain the high growth momentum seen in the past.
"The major characteristic of an investment-fueled economy is fast but volatile economic growth, while growth in a consumption-driven economy will be more mild but stable," Liu told the Global Times on Thursday.
China's fixed-asset investment grew by 7.2 percent on a yearly basis in 2017, compared with 8.1 percent growth in 2016, data from the National Bureau of Statistics (NBS) showed on January 18.
Liu said that the real estate sector in China has reached a point where it's likely to slow down after years of strong growth, which will also put pressure on domestic economic growth in 2018.
Opting for quality
Liu Dongliang, an analyst with China Merchants Bank, said that the lowering of GDP growth targets also shows that local governments are now focusing more on quality of economic growth.
"If quality and speed clash, now local governments would go for quality," he told the Global Times on Thursday.
And such "clashes" do exist, according to Xu Hongcai, an economist with the China Center for International Economic Exchanges.
"For example, many local governments are shutting down small plants that pollute the environment, but that means they have to lose the potential contribution those companies make to the local GDP," he told the Global Times on Thursday.
"Also, when the central government reduces its requirement for economic growth speed, local governments want to 'de-stress' by setting an easier goal," Xu said.
The experts also noted that the change of the central government mind-set has prompted local governments to pursue more genuine GDP growth. In early 2018, two provincial regions, North China's Inner Mongolia Autonomous Region and Binhai New Area, a State-level development zone in Tianjin, admitted to having falsified economic data and said they would have to revise down their 2016 GDP figures.
"The two regions might have set an example for other provinces to be more pragmatic in setting their own economic growth goals," Liu Xuezhi said.
But Liu Xuezhi also said that China's overall target of 6.5 percent growth set by the central government for 2016-20 will not be hard to achieve given China's GDP performance in 2016 and 2017, and that will make the economy more resilient amid a possible slowdown.