China | Provinces slash growth goals as slowdown hits home

Chinese provinces are downgrading their targets for economic growth in 2019 as exports and consumption slow, pointing to a lower national goal likely to be agreed in March.

Of the 30 provinces which have released their 2019 growth targets, 23 lowered their goals from those set for 2018, according to local government work reports. Guangdong – the nation’s manufacturing heartland – is seeking growth between 6 percent and 6.5 percent, while coastal Jiangsu is aiming for expansion above 6.5 percent, compared with about 7 percent targeted by both for last year. The regions have the two highest gross domestic product totals in the country.

China plans to set a target range for national economic growth of 6 to 6.5 percent for 2019, Reuters reported earlier this month, compared with the 2018 target of “about 6.5 percent,” signaling policy makers are embedding the ongoing economic slowdown into their goals for the year. Data for December hint that while a slump may for now be avoided, the government’s preference for drip-feed stimulus means a rebound is unlikely as well.

China’s economy slowed for an eighth straight month in January, as weaker global demand and decelerating factory inflation combined to undercut growth, according to a Bloomberg Economics gauge aggregating the earliest-available indicators on business conditions and market sentiment. The data suggests Beijing’s stimulus efforts have yet to translate into more business activity so far in the first quarter.

The overall growth target is usually delivered along with detailed economic plans at the National People’s Congress in March.

Sixteen out of the 30 regions met their targets for 2018, including Beijing and Shanghai, which both grew around 6.6 percent and pledged to exercise fiscal restraint in 2019. Tianjin and Chongqing missed, expanding 3.6 percent and 6 percent respectively. All four provincial- level municipalities have lower targets for this year.

Xinjiang, the nation’s largest province by size, lowered its GDP target to around 5.5 percent from around 7 percent. The detention and “re-education” of up to 1 million minority Muslim Uighurs in the far western region has attracted global outcry.

There are 31 administrative regions in China, not including the Special Administrative Regions of Hong Kong and Macau. Only Shandong, the third-largest by GDP, hasn’t set its growth target for 2019 as officials plan to hold their annual legislative meetings after the Chinese New Year holidays. Bloomberg

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