Every Chinese province and region except Tibet missed its annual gross domestic product target last year as growth in the economy as a whole fell to its slowest pace in a quarter of a century.
China’s economy is slowing thanks to a stalling property and construction sector that remains highly leveraged and afflicted by chronic oversupply and the slowdown is expected to continue for at least the next two years.
Last week, the IMF cut its 2015 growth forecast for China from 7.1 per cent to 6.8 per cent growth, and predicted the country would grow at a slower pace than India next year for the first time in decades.
In light of the grim outlook, every province, municipality or autonomous region in China, apart from Tibet and Shanghai, has lowered their GDP growth target for 2015.
For the first time since the mid-1980s, Shanghai has declined to name a growth target at all, becoming the first provincial-level government to abandon a metric that China’s leaders increasingly see as outdated.
The city’s economy grew 7 per cent last year, below its 7.5 per cent target and the slowest pace since 1991.
Growth of gross domestic product has long been one of the most important performance indicators for Communist party officials, but critics argue this has led to distorted statistics and contributed to environmental destruction and massive over-investment, particularly in property.
In the midst of the slowdown, the ruling party has said it wants to focus on the quality rather than just the quantity of economic growth.
“We can no longer simply use GDP growth rates to decide who the [Communist party] heroes are,” President Xi Jinping said last year.
Thirty of China’s 31 provincial-level governments have revealed their 2014 economic performances so far, and almost all have cut their growth target this year by at least one percentage point, with some lowering the target by up to 3 percentage points.
In March, the central government is expected to reveal an annual growth target for the national economy of “around 7 per cent”, down from last year’s goal of “around 7.5 per cent”.
The overall economy expanded 7.4 per cent last year, the first time since the Asian financial crisis in 1998 that it has come in slower than the official growth target.
In Tibet, where the economy consists almost entirely of government-controlled investment and resource extraction, the provincial government set a target of 12 per cent growth this year, unchanged from 2014.
Tibet’s economy is by far the country’s smallest and it hit its target last year, growing exactly 12 per cent, according to local government figures.
Every other province, city or autonomous region in the country missed its mark.
China’s industrial northern and northeastern regions, where heavy industries such as steel and coal mining are concentrated, undershot their growth goals by the widest margin last year.
The northern coal-rich province of Shanxi recorded the lowest growth rate in the country last year, with expansion of 4.9 per cent coming in far below its target of 9 per cent growth. It has lowered its growth target this year to “around 6 per cent”.
The province has been hit hard by a huge anti-corruption campaign targeting party officials at all levels of the government and was also hurt by slumping heavy industrial output and falling coal prices.
Chinese coal production fell for the first time since 2000 last year, while power output grew at its slowest pace since 1998 and steel production grew the slowest since 1981.
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