China bids farewell to GDP worship

BEIJING - China's shift from a GDP growth model to "quality" should become more obvious soon, as two thirds of provinces have  lowered their growth targets this year, if only very slightly.

Annual provincial legislative sessions were held between January and mid-February and so far, 22 provinces, including Beijing and Shanghai, have reined in their growth targets.

Seven others, including Guangdong, aspire to the same growth as last year. Only Hainan in the deep south and Heilongjiang in the far north have set targets higher than 2013. Beijing and Shanghai are both aiming for 7.5 percent, the lowest at the provincial level, compared with their 7.7 percent rate last year. The southwestern province of Guizhou is still hoping for 12.5 percent, the highest. With an economic volume of only 800 billion yuan (about 131 billion U.S. dollars) last year, inland Guizhou is among the few provinces whose GDP volume is less than one trillion yuan. With expected growth of 8.5 percent, manufacturing hub Guangdong's economic volume exceeded six trillion yuan in 2013, the most of any province.

"It is an inevitable reaction of local governments to the decision to improve the economic evaluation system with more emphasis on growth quality," said Wang Yiyang, head of Guangdong's development research center.

Local authorities can give more attention to the change of mode and economic restructuring, Wang said.

China's economy has shifted from high growth to a new phase of medium to high growth, with quality, efficiency and sustainability the watchwords.

The economy grew 7.7 percent in 2013, the same as 2012, overshooting the government target of 7.5 percent, according to the National Bureau of Statistics.

Assessment of local officials will be based on new criteria, including resource consumption, environmental cost, work safety and local debt,putting more emphasis on employment, residents' income, social security and health.

As ways to improve growth quality and efficiency, cutting excess industrial capacity and dealing with smog have been highlighted.

"We will adhere to the changing economic growth model," said Beijing Mayor Wang Anshun in January, vowing an "all-out effort" to tackle air pollution, a great concern to the capital's 20 million residents.

Seriously polluted Hebei, which neighbors Beijing, set its growth rate at 8 percent, the lowest in recent years. Hebei produces one fourth of the country's iron and steel.

"Current development is not sustainable. We must put the environment first," said Zhou Benshun, Communist Party chief of Hebei. "Polluters  will no longer gain approval for their projects and backward capacities  will be eliminated."

Hebei will slash capacities by 15 million tonnes of steel, 10 million tonnes of cement and use 15 million fewer tonnes of coal this year. It is a critical period of restructuring for Hebei, which must pursue a course of "green development", said Zhao Yong, another senior Hebei official.

The falling growth targets give local governments space and time to reform and to liberate themselves from GDP fatigue, which will be good for long-term development, according to Zhao Hong, vice president of Beijing Academy of Social Sciences.

Continued global recovery in 2014 will be a good environment for adjusting the national economic structure, said Wang.

China mapped out a package of comprehensive reforms in November at the third plenum of the 18th Communist Party of China Central Committee. The country is marching toward medium growth with a general projection of seven to eight percent, said Chi Fulin, head of the China Institute for Reform and Development, a Hainan think tank.

"Despite the reduction of goals in 22 provinces, we can still realize 7.5 percent this year," Chi told Xinhua in an exclusive interview on Tuesday.

He cited increasing domestic consumption, space for a 10 to 15 percent increase in the service sector's portion of the economy, urbanization and investment growth of about 20 percent.

Chi said the forecast high growth in Hainan is supported by domestic tourism.

Development of the tertiary sector should be speeded up to stabilize employment after cutting capacity, and to build a market environment with fair competition, added the analyst.