Two of China economic powerhouses have set less ambitious goals for their economies in 2023 while remaining steadfast in their commitment to fostering job growth and assisting the private sector.
This comes as the nation as a whole works to rebuild its Covid-ravaged economy after a challenging year.
China Hopes For Economic Recovery
According to the two provinces’ parliamentary meetings on Thursday, Guangdong and Zhejiang, two major manufacturing hubs where private businesses are defining features of the local economies, both set their growth targets at “above 5%” for this year after falling short of expectations in 2017 as a result of China’s strict zero-COvid policy.
Their gross domestic product (GDP) growth targets could provide insight into this year’s national economic growth target, which the central government will publish during the national parliamentary sessions in March. These regions serve as significant export hubs and economic engines for China.
The provincial authorities stated in its report on Thursday that “the [Zhejiang] administration would exhaust all steps to push for export growth and work with firms in developing external markets and securing additional orders.”
They estimated that Zhejiang’s GDP, which makes up around 7% of the national economy, increased by only 3% last year, falling short of the 6% target it had set for itself.
Additionally, Guangdong, the largest regional economy in the nation, which was responsible for 10.9% of the national economy in 2021, is anticipated to have expanded by only 2% last year, falling short of its goal of 5.5% and representing the pandemic’s weakest growth rate since it started in 2020. With a GDP of 12.8 trillion yuan (US$1.89 trillion) in 2022, it would be comparable to South Korea’s or Canada’s GDP.
After swiftly eliminating the oppressive zero-Covid regime in early December, policymakers have recently shifted their attention to fostering growth. They have also softened their approach toward the troubled tech and real estate sectors, which have been suffering since 2020 as a result of a broad regulatory crackdown.
Investor and analyst optimism on a significant recovery in China’s economy in 2023 has increased as a result of the signs. The current consensus among government economists and international commentators is that Beijing will aim for growth of more than 5% in 2023.
Another significant economic powerhouse, Zhejiang province, declared on Thursday that it aims to grow by more than 5% in 2023. According to Wang Hao, the governor, the economy barely increased by about 3% last year because of “unexpected shocks and hurdles.”
To make the digital economy a stronger economic engine, he committed to concentrating on advancing it. Several of the major manufacturing and technology firms in the nation are based in the province, notably Geely Auto (GELYF) and Alibaba (BABA).
The Hangzhou city government, where Alibaba is headquartered, and the digital giant signed a strategic partnership deal earlier this week. According to a government statement, the city’s top officials acknowledged Alibaba’s contribution to the local economy and promised the company their “unwavering support.”
Shanghai, the wealthiest city on the Chinese mainland, declared on Wednesday that it will strive for 5.5% growth this year. Its economy expanded by 3% last year, according to Gong Zheng, the city’s mayor.
The nation’s financial and shipping center, Shanghai, was severely impacted by the Covid lockdown in April and May, which lasted two months. According to Gong, the city’s fiscal income decreased last year, falling short of its prior target of a 6% gain. The combined hotel and catering business was the worst affected by the industry, posting a 63% decline in revenue for the entire 2022.
According to Gong, the city will develop offshore yuan trading and cross-border trade settlement in addition to strengthening its position as a financial hub. Additionally, it will make an effort to draw in more foreign companies.
The provinces of Fujian, Sichuan, and Hebei all announced growth targets of 6% for 2023 on the same day. Jiangxi Province, on the other hand, set a more challenging target of 7%.