A number of Chinese provinces have lowered gross domestic product (GDP) growth targets for 2022, as well as expectations for consumption and trade, in the latest sign that Beijing may resort to its old playbook of state-led investment to maintain economic stability.
After the National Bureau of Statistics on Monday revealed China's GDP grew 8.1 per cent in 2021, and warned about growing economic headwinds, five provinces - Zhejiang, Anhui, Chongqing, Sichuan and Hunan - lowered their growth targets for the year.
China's economy faces a host of challenges, including sporadic coronavirus outbreaks that continue to weigh on consumption, a property market downturn, supply shocks that have driven up the cost of raw materials, and tensions with Western nations.
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The country is also hosting the Winter Olympics and the Communist Party's 20th National Congress this year.
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That some provinces have begun revising down their growth targets underscores the difficulties ahead for the world's No 2 economy, which saw the pace of growth slip in the fourth quarter of last year.
Zhejiang, the country's fourth largest provincial economy, which is home to tech giant Alibaba, set a GDP growth target on Monday of "around 6 per cent" this year, compared to last year's 6.5 per cent and an actual growth rate of 8.5 per cent.
"We'll expand effective investment by pushing forward key projects to provide adequate growth momentum for high-quality development," its acting governor Wang Hao told the province's top legislative body on Monday.
The government is eyeing an investment growth rate of 6 per cent, including 10 per cent for manufacturing and above 12 per cent in hi-tech industries, he said.
The southwestern province of Sichuan, the country's sixth largest provincial economy, announced on Tuesday a 2022 growth target of 6.5 per cent, down from 7 per cent last year, and an actual growth of 8.2 per cent.
Hunan, the ninth largest economy in China, is aiming for a 6.5 per cent increase in GDP this year, compared to its 2021 target of "above 10 per cent" and actual growth rate of 7.8 per cent.
Meanwhile, southeast China's Chongqing municipality lowered its 2022 growth target by 0.5 percentage points to 5.5 per cent, and the central province of Anhui set this year's growth target 1 percentage point lower than last year at 7 per cent.
Gansu and Hebei provinces kept their targets unchanged at 6.5 per cent.
At the central economic work conference late last year, China's top policymakers emphasised economic stability for 2022, pledging to maintain GDP growth within a reasonable range.
A specific target will be announced at the annual parliamentary convention on March 5, with many analysts predicting it to be above 5 per cent.
Beijing, which has set its GDP targets in line with national levels over the past four years, announced a week ago it would aim for growth of "above 5 per cent", down from last year's "above 6 per cent" and an actual rise of 8.5 per cent.
The challenges facing China's economy at large are already starting to be felt at a local level.
One of China's most populous provinces, Henan, which is grappling with Omicron outbreaks, lowered this year's growth target for retail sales to 8 per cent from 9 per cent last year.
Dongguan, an export-oriented city in the southern province of Guangdong, set its 2022 foreign trade growth target at 3 per cent, compared to a 15 per cent growth last year.
Achieving the growth target will be a lot more challenging this year, even if it is lowered to 5 per cent
Julian Evans-Pritchard, a senior China economist of Capital Economics, said the downturn in property construction is set to deepen and last year's boost from surging exports would not be repeated.
"Achieving the growth target will be a lot more challenging this year, even if it is lowered to 5 per cent," he wrote in a note on Monday.
Credit rating agency Fitch Ratings estimated on Tuesday that China would see growth of 4.8 per cent while faced with such strong headwinds.
Domestic analysts, however, are more optimistic, encouraged by the central bank's surprise decision to cut its two major policy rates by 10 basis points on Monday.
To defend economic growth, the central government has also promised to "front load" some policies, such as key construction projects outlined in the 14th five-year plan for 2021-25.
Local authorities were allocated a quota of 1.46 trillion yuan (US$230 billion) in special purpose bonds in December. The National Development and Reform Commission (NDRC), China's top economic planner, is now pushing local governments to issue them earlier to fund construction projects.
"We'll go through various approval procedures as soon as possible, promptly implement construction conditions such as land acquisition and demolition ... and promote the timely start of construction of new projects," Yuan Da, director of the NDRC's national economy department, told a media briefing on Tuesday.
Some local authorities have raised their investment targets. For instance, Henan boosted its investment growth target to 10 per cent from last year's 6 per cent, while Anhui is eying double-digit investment growth, higher than last year's target of 9 per cent.
Most provinces set their consumer inflation target at 3 per cent this year, in line with last year's national goal.
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