A number of key provinces and cities in China have announced their growth targets for this year, most of them above 5%, offering the first clues about the country’s economic path in 2023.
Local governments across China began to convene this week for annual legislative sessions laying out their respective policy goals for the year. The meetings will culminate in the national parliamentary session to be held in March, in which the premier is expected to disclose the nation’s GDP growth target.
Guangdong, the southern manufacturing and export giant, announced Thursday that it aims to grow its economy by 5% or more this year.
Wang Weizhong, the provincial governor, estimated that its economy only expanded about 2% in 2022, missing the target of 5.5% by a long shot.
“It was not easy to achieve that result,” Wang said in a speech. He added the economy had encountered difficulties not seen in “many years,” including shrinking demand, supply chain shocks and weakening expectations.
This year, Guangdong will focus on growing its economy, including supporting the manufacturing industry, accelerating economic integration with neighboring Hong Kong and Macao, and helping private businesses, Wang said.
Guangdong accounts for more than a tenth of China’s total economic output. In 2021, its GDP was slightly higher than South Korea’s, which is the world’s tenth largest economy.
China’s economy is in bad shape because of three years of Covid lockdowns and a persistent property market slump. Economists had generally expected growth to slump to a rate between 2.7% and 3.3% for 2022, lower than the government’s target of 5.5%.
Policymakers have recently turned their focus to boosting growth after rapidly dismantling the draconian zero-Covid policy in early December. They have also eased their stance on the embattled tech and property industries, which have been reeling from a sweeping regulatory crackdown since 2020.
The signs have boosted investor and analyst confidence about a significant rebound in China’s economy in 2023. So far, a group of government economists and international analysts have said they expect Beijing to set a growth target of above 5% in 2023.
On Thursday, Zhejiang province, another major economic powerhouse, announced it’s targeting an expansion of more than 5% in 2023. Last year, the economy grew by only around 3% amid “unexpected shocks and challenges,” its governor Wang Hao said.
He vowed to focus on boosting the digital economy to make it a bigger growth engine. The province is home to several of the country’s largest tech and manufacturing companies, including Alibaba (BABA) and Geely Auto (GELYF).
Earlier this week, the municipal government of Hangzhou, where Alibaba is based, signed a strategic cooperation agreement with the tech conglomerate. The city’s top officials praised Alibaba’s role in helping the local economy and pledged “unwavering support” for the firm, according to the government statement.
On Wednesday, Shanghai, the most affluent city in mainland China, announced it would aim for 5.5% growth this year. Last year, its economy increased by 3%, according to the city’s mayor, Gong Zheng.
Shanghai, which is the nation’s financial and shipping hub, was hit hard by a two-month long Covid lockdown in April and May. The city’s fiscal income contracted last year, missing its previous goal of a 6% growth, Gong said. By industry, the combined hotel and catering sector was the worst hit, recording a 63% plunge in revenue for the whole 2022.
Gong said the city will strengthen its role as the financial center and develop offshore yuan trading and cross-border trade settlement. It will also try to attract more international businesses.
On the same day, Fujian, Sichuan and Hebei provinces all disclosed growth targets of 6% for 2023. Jiangxi province, meanwhile, set a more ambitious goal of 7%.