Local Chinese officials unveiled their priorities for 2024, with pledges by some rich provinces to take the lead in driving growth shedding light on how Beijing’s economic strategy will play out nationwide.
Almost all 31 mainland provinces held meetings to discuss next year’s priorities after the end of the Central Economic Work Conference in Beijing earlier this month. The country’s top leaders at that conclave conveyed their commitment to stimulating the economy and developing emerging sectors.
Wealthy provinces such as Zhejiang and Guangdong responded to the central government’s call for economically strong regions to play a “pivotal role” in supporting the national economy. They pledged to speed up infrastructure investment and outlined plans to grow in high value-added sectors.
Less-developed or debt-ridden provinces, while promising to increase efforts to help local economies recover, were less vocal about taking aggressive measures and stressed they will prevent risks from spiraling out of control. Guizhou and Yunnan said they will take “concrete steps” to resolve risks.
Tianjin, Liaoning, Heilongjiang and a few others stopped short of repeating the phrase “consolidating stability through progress,” a new slogan used by top leaders that fueled expectations for a more ambitious growth goal for 2024.
This isn’t the first time Beijing has asked regional powerhouses to bolster national growth. In July last year, then Premier Li Keqiang met with leaders of five coastal regions to urge them to introduce more supportive policies when the Covid-hit economy was on the brink of contraction.
Still, China’s post-pandemic recovery has struggled due to a property crisis, local government debt risks, faltering demand and geopolitical tensions. Beijing has stepped in with stimulus to secure this year’s growth target of about 5%.
Economists are expecting China to repeat that growth target next year, although it will be harder to achieve because of a higher base of comparison.
National Target
Local officials are now mulling their own targets for 2024, which are typically announced at the annual provincial legislative sessions starting mid-January.
The provincial figures will offer clues to the national target, which Beijing will reveal when the National People’s Congress meets in early March. The numbers will also indicate how much support the government will need to dish out.
“The growth targets to be set by the provinces will be meaningful because there may be consequences if officials fail to achieve the goals,” said Ding Shuang, chief economist for Greater China and North Asia at Standard Chartered Plc.
Ding expects most of the rich provinces to “avoid a lower target than 2023.” That would not be easy to achieve “because the favorable base effect is waning,” he added.
Authorities in Jiangsu, Shanghai, Sichuan and Anhui have also vowed to contribute more to national growth. The six regions, including Zhejiang and Guangdong, combined account for about 40% of China’s gross domestic product.
The wealthy coastal province of Fujian and Shandong, the country’s third-largest local economy, didn’t reference Beijing’s call.
Local authorities also vowed to address risks in the real estate sector, the single biggest threat to China’s economic recovery. Fujian said it will facilitate property investments and prevent new risks from emerging.
Yunnan said it will stabilize the property market while acknowledging the local economy is “at the most critical point” to transform and upgrade.
(Bloomberg)
