- Key policy adviser says hitting national target of doubling GDP in 10 years does not mean every province has to double the size of its economy
- The country’s top-down policy system means officials will often cut corners or manipulate data to achieve their individual goals
A key economic policymaker in Beijing has warned local officials not to be overzealous in fulfilling their "political task" of becoming a well-off society next year.
Han Wenxiu, deputy director of the Office of the Central Economic and Financial Affairs Commission, warned that financially stretched local authorities should not overstretch themselves and undermine other policy goals.
"Taking the goal of doubling gross domestic product (GDP) from the 2010 level, for example, it's a requirement on the national level, not a demand that all the regions must double their GDP," Han told at an event in Beijing on Saturday.
"Every region has quite a different situation. They must strive for the targets according to their own needs and practices."
The comments of Han, a senior aide to the president's key economic adviser Liu He, came after the annual Central Economic Work Conference emphasised the importance of meeting growth, poverty reduction and environmental targets.
Such targets could place new pressures on local authorities, which must already grapple with a total debt of 21.4 trillion yuan (US$3 trillion), plus a potential 30 trillion yuan in further liabilities, coupled with falling tax and land revenues.
Under China's top-down policymaking system, central government hands a set of targets to each province, which then hands on specific goals to individual cities and counties.
Often the result is that officials who are desperate to meet their own targets will cut corners or cook the books.
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For example, several counties in Hebei province suffered large-scale blackouts in 2010 to meet energy use and environmental targets.
More recently, the authorities in Liaoning and Inner Mongolia admitted that economic figures had been manipulated to hit high growth targets.
The most recent examples involved the widespread closure of pig farms to hit environmental targets " only to see widespread shortages following the African swine fever epidemic that has seen pork prices more than double.
The definition of one of next year's key policy targets " becoming a well-off society " is doubling the size of the economy and per capita income compared with the 2010 figures.
" We are in the stage of crossing the middle-income trap and striving to become a high-income country," he said.
There are also other goals next year, including lifting the poorest 6 million people out of absolute poverty and reducing pollution levels significantly.
A majority of economists have estimated that, following the recent upwards revision to last year's GDP growth, needs growth of at least 5.8 per cent next year to hit the target of doubling the 2010 total.
The 2020 growth target is accordingly believed to be "around 6 per cent", but this will not be confirmed until March.
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The warning against local missteps may reflect Beijing's priority of ensuring stability, which, according to Han, "includes appropriate growth of the economy, basic stability of prices and relatively full employment".
The annual economic conference vowed to maintain the basic stability of macro leverage, which is usually defined as the debt to GDP ratio, and avoid systemic risk.
The world's second largest economy is widely believed to be able to hit its growth target without a major economic stimulus.
The recent "phase-one" trade agreement with the US, which will see some tariffs cut, should also help the situation and Han hailed the agreement as "good news" and a "mutually beneficial win-win".
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