Around 60 percent of Chinese provincial-level regions have lowered growth targets for 2016. At an annual legislative meeting that opened Wednesday, Tibet targeted 10-percent growth this year, 2 percentage points lower than that for 2015. By Wednesday, 30 of 31 provinces, autonomous regions and municipalities agreed new growth targets at their annual legislative meetings. Anhui will announce its target in February.
Of the 30 regions, 17 lowered GDP targets and 10 kept them at last year's level. Only two, Heilongjiang and Jilin in the northeastern industrial base, have slightly raised their targets. Shanghai resumed setting a target this year after skipping last year. Only Tibet, Guizhou and Chongqing have targeted a double-digit growth.
The lowering of targets is a result of both internal and external factors, said Zhang Weiguo, head of Shandong Academy of Social Sciences economics institute. Investment is losing momentum as China struggles to reduce excess capacity and restructure its economy, Zhang said. Consumption, however, takes time to make up the lost steam.
Externally, the fragile world's economy continues to dent demand for Chinese exports, said Zhang. Liu Bing, president of Shandong macroeconomics institute, said the economy is under tremendous downward pressure as many regions must face cutting excess capacity while destocking high inventories this year.
The cut in capacity will put enormous pressure on traditional industries, said Lian Ping, chief economist with the Bank of Communications. Shanxi, hard-hit by a struggling coal industry, maintained a 6-percent target despite growth of only 3.1 percent last year.
Nine regions set ranges instead of specific rates, tolerating slower growth and leaving room for capacity reduction and restructuring, Lian said. Jin Xuejun, a professor with Zhejiang University, said despite uncertainties and painful restructuring, many bright spots, like the service sector and new industries, keep emerging.
With strong consumer demand, businesses still have plenty of opportunities, said Zhong Xiaoxiao, an executive with bottled water producer Nongfu Spring Co. Ltd. "We hope the government can further reduce the burdens on businesses to help us through these hard times," Zhong said.
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