Fresh evidence of China moving away from a growth-at-all-costs strategy is emerging in the annual targets of the nation’s regional authorities.
With new metrics like debt sustainability and cleaning up the environment rising in focus, 11 of 31 provinces have lowered their growth goals for 2016. Nine have moved away from a pinpoint figure, and now present a range of growth to shoot for -- an approach some economists anticipate the national government will adopt when it unveils its objective in March.
The more modest goals are a departure from the days when provincial governments led stimulus binges, creating a debt pile that hangs over today’s growth prospects. While President Xi Jinping and Premier Li Keqiang have signaled they’ll tolerate a slower expansion, they’ve set a line in the sand at an average of 6.5 percent through to 2020 -- the pace needed to achieve long-term goals to double incomes and the economy’s size from 2010 levels.
"The government seems to be lowering the importance of GDP targets and prioritizing things like cleaning up the environment," said Zhu Qibing, a Beijing-based analyst at China Minzu Securities Co. "The other reason for targeting a range is the increasing difficulty in reaching targets as the economy slows. It’s embarrassing to set a low target, but a high target is too difficult to meet. So a range provides some flexibility."
Whether the central government follows suit will be known early in March, when the nation’s leaders gather in Beijing for the annual National People’s Congress. The majority of economists surveyed by Bloomberg News in September forecast the central government will set its GDP growth target for 2016 as a range of 6.5-to-7 percent.