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Home » Opinion » Chinese Views
Local chiefs set GDP targets too high for nation's good
Source: Xinhua |
February 2, 2011, Wednesday
|
Print Edition
Print Edition
SOME local governments plan on doubling their Gross Domestic Product within five years as China ushers in its 12th Five-Year Program (2011-2015), raising concerns that the Chinese economy could overheat.
At the starting point of the 12th Five-Year Program, local governments have released their GDP targets for the next five years at the annual meeting of their local legislature.
Many set double-digit growth targets for the coming five years and some even proposed doubling their 2010 GDP by the end of 2015.
A rough calculation shows that to double the GDP in five years, an annual growth of 14.87 percent would be needed. That is even faster than China's 10.3 percent GDP growth in 2010, and 9.2 percent in 2009.
Chongqing City planned to reach an annual GDP growth rate of 12.5 percent and double local GDP per capita to US$8,000 by 2015. Jiangmen city of Guangdong Province has set its sights even higher. It eyes an average annual GDP growth of 15 percent, much higher than the 8 percent target for the whole province.
Only a few regions lowered their GDP targets. For example, Shenzhen lowered its growth target to 10 percent from 13.5 percent in the 11th Five-Year Program.
The local governments' enthusiasm about higher economic growth figures has heightened worry about economic overheating by economists and higher authorities. They also fear big GDP goals will put further pressure on inflation inflation management and economic restructuring.
Too fast
Most provinces set their 2011-2015 GDP targets too high and failed to take into consideration the constraints of environmental protection, energy and resources, said Zhang Ping, director of the National Development and Reform Commission (NDRC), China's top economic planning body. He addressed the national working conference on energy on January 7.
Yao Jingyuan, chief economist of the National Bureau of Statistics (NBS), said if the economy grows too fast, it would undermine both price stability and economic restructuring.
China is facing great inflationary pressures after CPI hit a 28-month high of 5.1 percent in November 2010. Though CPI slowed to 4.6 percent in December, it still poses a great challenge to the government to balance inflation controls and economic growth. "We should make every effort to put the brakes on our economy to maintain a moderate growth rate and avoid overheating the economy. I personally think a growth rate of 8 to 9 percent would be great," said Yao.
The high GDP targets set by local governments also show that the growth pattern adopted by local governments remains unchanged.
If they continue to emphasize larger economic scale instead of efficiency and technological progress, they are still on the traditional track of economic growth, according to Wang Yuanjing, a researcher with the NDRC.
Harmony
"Local governments should not emphasize only economic growth, but also stress people's livelihoods and harmonious development," said Wang.
The Proposal on Formulating the Twelfth Five-Year Program (2011-2015) on National Economic and Social Development, released in October, said that accelerating the transformation of China's economic development pattern would be the major task in the 12th Five-Year Program period.
However, some local governments usually ignore tasks assigned by the central government and focus mainly on GDP figures - largely because the official evaluation system of officials emphasizes GDP growth, not balanced growth, green growth, technology or a harmonious society.
Wang Yuanjing said evaluation of local officials should factor in the negative social, economic and environmental effects of blind pursuit of GDP, to reduce their addictions to GDP growth.
At the starting point of the 12th Five-Year Program, local governments have released their GDP targets for the next five years at the annual meeting of their local legislature.
Many set double-digit growth targets for the coming five years and some even proposed doubling their 2010 GDP by the end of 2015.
A rough calculation shows that to double the GDP in five years, an annual growth of 14.87 percent would be needed. That is even faster than China's 10.3 percent GDP growth in 2010, and 9.2 percent in 2009.
Chongqing City planned to reach an annual GDP growth rate of 12.5 percent and double local GDP per capita to US$8,000 by 2015. Jiangmen city of Guangdong Province has set its sights even higher. It eyes an average annual GDP growth of 15 percent, much higher than the 8 percent target for the whole province.
Only a few regions lowered their GDP targets. For example, Shenzhen lowered its growth target to 10 percent from 13.5 percent in the 11th Five-Year Program.
The local governments' enthusiasm about higher economic growth figures has heightened worry about economic overheating by economists and higher authorities. They also fear big GDP goals will put further pressure on inflation inflation management and economic restructuring.
Too fast
Most provinces set their 2011-2015 GDP targets too high and failed to take into consideration the constraints of environmental protection, energy and resources, said Zhang Ping, director of the National Development and Reform Commission (NDRC), China's top economic planning body. He addressed the national working conference on energy on January 7.
Yao Jingyuan, chief economist of the National Bureau of Statistics (NBS), said if the economy grows too fast, it would undermine both price stability and economic restructuring.
China is facing great inflationary pressures after CPI hit a 28-month high of 5.1 percent in November 2010. Though CPI slowed to 4.6 percent in December, it still poses a great challenge to the government to balance inflation controls and economic growth. "We should make every effort to put the brakes on our economy to maintain a moderate growth rate and avoid overheating the economy. I personally think a growth rate of 8 to 9 percent would be great," said Yao.
The high GDP targets set by local governments also show that the growth pattern adopted by local governments remains unchanged.
If they continue to emphasize larger economic scale instead of efficiency and technological progress, they are still on the traditional track of economic growth, according to Wang Yuanjing, a researcher with the NDRC.
Harmony
"Local governments should not emphasize only economic growth, but also stress people's livelihoods and harmonious development," said Wang.
The Proposal on Formulating the Twelfth Five-Year Program (2011-2015) on National Economic and Social Development, released in October, said that accelerating the transformation of China's economic development pattern would be the major task in the 12th Five-Year Program period.
However, some local governments usually ignore tasks assigned by the central government and focus mainly on GDP figures - largely because the official evaluation system of officials emphasizes GDP growth, not balanced growth, green growth, technology or a harmonious society.
Wang Yuanjing said evaluation of local officials should factor in the negative social, economic and environmental effects of blind pursuit of GDP, to reduce their addictions to GDP growth.
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