Shanghai became the first of China’s 31 provinces and municipalities to not set a growth target for this year, underscoring the shift away from unfettered expansion.
The municipal government said its economy should “rise steadily, improve structure, enhance quality and efficiency” this year, according to its annual work report released on Sunday.
Out of 10 other regions that have so far announced growth targets for this year, nine have cut them.
Chinese Premier Li Keqiang (李克強) and People’s Bank of China Governor Zhou Xiaochuan (周小川) last week emphasized a focus on sustainable growth when meeting global business leaders and policy makers at Davos, Switzerland. Chinese President Xi Jinping (習近平) last year began referring to the “new normal” of a more moderate expansion.
“We believe that Chinese authorities will tolerate a relatively slower growth in the coming year,” economists led by Liu Li-gang (劉利剛) at Australia & New Zealand Banking Group Ltd in Hong Kong wrote in a report. “More importantly, China will focus on improving the quality of economic growth.”
He expects the government to pay more attention to social welfare, income gains commensurate to GDP growth and quality employment generation.
Ten out of the 11 provinces and municipalities that have announced last year’s growth figures missed their targets, with Tibet the exception. The mountainous region set a goal of 12 percent this year, the same as last year and the highest so far.
Shanghai’s regional GDP rose 7 percent last year from a year earlier, lower than its initial goal of 7.5 percent and slower than the nation’s 7.4 percent expansion.
“As part of its reforms, the government isn’t focusing on GDP alone,” said Hua Changchun (花長春), China economist at Nomura Holdings Inc in Hong Kong.
“The central government will increasingly focus on other factors, including the environment and debt” when assessing local officials’ performance, he said.
Hua expects a national target will still be announced in March at the National People’s Congress, which will be lower than last year’s goal of about 7.5 percent.
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