Local govts set modest GDP growth targets

Local governments have set moderate economic growth targets this year amid an uncertain economic outlook to focus on quality, according to recent data released in the run-up to local legislative sessions.　

East China's Jiangsu Province set its GDP growth target for 2013 at 10 percent year on year, down from 10.1 percent in 2012 and 11 percent in 2011, data released Monday at the ongoing session of the Jiangsu legislative body showed.

Anhui Province dropped its growth target from 12 percent in 2012 t0 10 percent this year, while Shanghai, whose GDP growth fell from 8.2 percent in 2011 to 7.5 percent in 2012, aims to achieve year-on-year growth of between 7.5 and 7.7 percent in 2013, a report released by the Development Research Center of Shanghai Municipal Government Thursday showed.

Although the less developed central and western regions have seen strong momentum in recent years thanks to a flood of government infrastructure investment aimed at helping them catch up with the coastal areas, local governments in inland regions also set moderate growth targets this year.

Hubei Province downgraded its annual GDP growth target in 2013 to 10 percent from last year's 11.3 percent, while Northwest China's Gansu Province held its growth target in 2013 at 13.5 percent, slightly higher than the level of 13 percent growth in the previous year. Provincial growth targets and claimed numbers are consistently higher than central government figures.

More local governments will cut their GDP targets this year amid an uncertain economic outlook in the coming weeks, analysts said.

"External demand will continue to remain weak and consumption will not see a big jump in the year. The uncertain economic outlook forces local governments to be prudent in setting their growth targets for the year," Ni Pengfei, director of the City and Competitiveness Research Center under the Chinese Academy of Social Sciences (CASS), said Monday.

"To expect rocketing growth as in the past is no longer realistic. The downgrading of the GDP growth targets by local governments is in line with the central government's policy on economic restructuring to focus on quality," he said.

China released on Friday its GDP data for 2012, which showed that the country's economic expansion had slowed to 7.8 percent, the slowest pace since 1999.

The country's GDP target for 2013 is expected to be announced at the annual sessions of the national legislative and consultative bodies in March, but many economists and research institutes projected that it would be at 7.5 percent, the same as the 2012 target.　

While local governments cut their growth targets, analysts said they will still rely on investment to bolster growth as new local officials are eager to impress their supervisors.

Fixed-assets investment (FAI) has begun to speed up noticeably since September as project approvals quickened. "We anticipate a notable rebound beginning in the first quarter of 2013 as new leaders usually exhibit a pro-growth policy bias," Chris Leung, senior economist at DBS Bank told the Global Times in a research note.

Investment is expected to grow 24 percent in 2013, up from 21 percent in 2012, according to the Investment Association of China.　

"As external demand continues to be sluggish in 2013, local governments have to rely on investment and consumption to boost the economy. For the country's central and western region, investment is still the first engine powering growth," said Zhang Baotong, vice director of the academic committee of the Shaanxi Academy of Social Sciences.