Provinces set high GDP goals

▶ 2021 a ‘ big year’ for China’s economy to rebound

Despite wide speculation that China has not so far set a national target for GDP growth in 2021, most of China’s provinces and regions have set their own targets above 6 percent this year, signaling confidence to achieve further economic rebound from the coronavirus bite in a “big year” for the Chinese economy.

Among the 31 provinces and regions that have announced economic growth targets for 2021, Central China’s Hubei Province, which was hit hardest by the coronavirus last year, and South China’s Hainan Province where China is building a high- level free trade port, have both banked on goals “above 10 percent,” the highest among all provinces and regions in China.

Shanghai, Beijing and China’s Guangdong Province set growth targets of “above 6 percent” for 2021, up from a goal of “about 6 percent” for the previous year.

The top three provinces and regions achieving highest economic growth rates in 2020 – Tibet Autonomous Region and Guizhou and Yunnan provinces in Southwest China – vowed to continue growth at 8 to 9 percent this year.

China usually reveals its national GDP growth target at the annual two sessions, the country’s main legislative meetings, but some analysts said they do not expect a target to be revealed at this year’s two sessions that will convene on March 4 in Beijing.

Wu Chaoming, chief economist at Chasing Securities, said it should be certain that all Chinese provinces can achieve an above 6 percent growth this year based on the low growth base last year and that 2021 will be a “big year” for China’s economy.

“The targets have been conservative, and I believe they can be achieved for certain,” he said, predicting that China could achieve GDP growth of about 8.5 percent this year.

According to Wu, domestic GDP growth should surge, particularly in the first half of the year, as China’s manufacturing can still benefit from rising overseas demand as a result of a pandemic- triggered production standstill in overseas countries.

China’s official manufacturing Purchasing Managers Index ( PMI) in January stood at 51.3 – the 11th consecutive expansion, indicating vibrancy in China’s factories which have been churning goods that are needed by the world.

In addition, the country’s “stay put” policy which asked people not to travel during the past weeklong Spring Festival holidays will also boost manufacturing and exports as many continued to work to earn extra bonus, Tian Yun, vice director of the Beijing Economic Operation Association, told the Global Times.

For instance, a stock factory in Yiwu, Zhejiang Province, a city known as the world’s capital of small commodities, rewarded each worker who stayed a bonus of 12,000 yuan ($ 1,850), media reported.

But Tian noted China’s export goods may shift this year from the boom due to heavy demand for ventilators and masks in 2020 to COVID- 19 vaccines this year, which will become a mainstay of China’s exports.

Analysts pointed out that the heat of economic rise may cool slightly in the third quarter, as overseas supplies are climbing with help of pandemic control, and the effects of China’s policy support are mostly in place and will start to lose steam. Tian expects rebounding consumption could offset that loss.