The annual economic growth targets of China’s regional authorities provide fresh evidence that the country is abandoning the growth-at-all-costs mindset that has resulted in severe problems that will take a long time to solve.
As new objectives like debt sustainability and cleaning up the environment come to the fore, 11 of 31 provinces have lowered their goals for economic growth this year, Bloomberg reported.
Nine have moved away from a specific figure and now present a range of growth to shoot for — an approach some economists expect the national government to adopt when it unveils its own target in March.
The more modest goals are a departure from the days when provincial governments led stimulus binges, creating a debt pile that hangs over today’s growth prospects.
While President Xi Jinping and Premier Li Keqiang have signaled they’ll tolerate a slower expansion of gross domestic product, they’ve set a line in the sand at an annual average of 6.5 percent until 2020 — the pace needed to achieve long-term goals to double incomes and the economy’s size from the levels in 2010.
“The government seems to be lowering the importance of GDP targets and prioritizing things like cleaning up the environment,” said Zhu Qibing, a Beijing-based analyst at China Minzu Securities Co.
“The other reason for targeting a range is the increasing difficulty in reaching targets as the economy slows. It’s embarrassing to set a low target, but a high target is too difficult to meet. So a range provides some flexibility.”
Last year, 22 provinces decelerated from the previous year as China’s expansion slowed to the weakest pace in 25 years.
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