Hebei to cut 2015 GDP growth target

More provincial govts may make similar moves

North China's Hebei Province announced Thursday it would cut its GDP growth target for 2015 to 7 percent, a move which analysts believe will be followed by more provincial-level governments.

Zhang Qingwei, governor of Hebei Province, said Thursday at a government work report during the province's annual legislative and advisory sessions that it would cut economic growth targets for the province to 7 percent in 2015 from 8 percent in 2014, financial news portal cnstock.com reported Thursday.

Due to pressures such as eliminating outdated production capacity, Hebei's economy declined sharply in 2014 and a less ambitious growth target would provide more leeway for the province to optimize economic structure and deepen reforms, Zhang said.

Hebei is the first Chinese provincial-level region to formally unveil its growth target for 2015.

Following Hebei's move, more Chinese provincial-level governments are expected to lower their economy growth targets for this year as current economic indicators show the country's economy still facing large downturn pressure, said Liu Xuezhi, an analyst at Bank of Communications in Shanghai.

Based on information revealed from the recent economic work conferences of Northwest China's Gansu Province and Ningxia Hui Autonomous Region, the two local governments have set an 8 percent growth target for 2015, down from the previous year's 11 percent and 10 percent respectively, news portal cs.com.cn reported Thursday.

In addition, East China's Zhejiang Province lowered its 2015 GDP growth target to 7.5 percent from the 8 percent in 2014 and Central China's Hunan Province also set a lower economic growth target of 8.5 percent in 2015 from the previous 10 percent, it said.

The growth target for these four provincial-level regions will be formally unveiled at their legislative and advisory sessions scheduled to be hosted this month and in February.

During China's annual agenda-setting economic conference concluded on December 11, 2014, the country's policymakers have made it clear that China needs to adapt to a "new normal" status, meaning an economic upgrade with slower growth.

Under the "new normal" status, experts forecast that China's GDP growth target for 2015 is likely to be lowered to around 7 percent from last year's 7.5 percent target.

North China's Shanxi Province and several other provinces whose economic growth largely relies on the energy industry is expected to see relatively large downward adjustment on their GDP growth targets for this year partly due to resources tax reform which have a negative effect on the energy industry, Liu said.

Provinces in Northeast China including Heilongjiang are also expected to lower their economic growth targets sharply from last year, Xu Hongcai, director of the Department of Information under the China Center for International Economic Exchanges, told the Global Times on Thursday.

Those provinces are still facing pressure to eliminate outdated capacity and adjust economic structure, Xu said.