Finance & Economics

China’s Richest Provinces to Take Lead in Driving Economic Growth

In China, local officials have released information on their priorities for next year, which includes, among other things, promises from some of the country’s most financially secure provinces to become a driving force in stimulating the growth of the state’s economy.

China’s Richest Provinces to Take Lead in Driving Economic Growth

The specified data is evidence that Beijing’s current economic strategy will be implemented on the widest possible scale. This means that the relevant measures and decisions will affect the whole country.

Almost all 31 mainland provinces held meetings during which work priorities in 2024 were discussed. These discussions took place after the conclusion of the Central Economic Work Conference in Beijing in early December. During this conference, representatives of China’s top leadership declared their commitment to stimulating economic growth and developing new sectors of this system.

Wealthy provinces such as Zhejiang and Guangdong have responded to government calls to become a major force in supporting the national economy. The leaders of these regions promised to increase the level of intensity of investment in infrastructure projects. The authorities of the wealthy provinces have also stated that they have plans for growth in high-value-added sectors.

Regions of China with a lower level of development or facing a debt burden have promised to step up efforts to help the local economy. However, these provinces are very restrained in taking aggressive measures. These regions also promised that next year actions will be taken to ensure that the risks are not out of control.

Guizhou and Yunnan have announced plans for specific steps to eliminate risks. Tianjin, Liaoning, Heilongjiang, and some other provinces refrained from declaring their commitment to strengthening stability through progress. This formulation has already become a kind of slogan in China, which is used by the country’s top leadership to verbally indicate ambitious economic growth goals for 2024.

Beijing is currently appealing to the regional authorities to contribute to ensuring positive economic dynamics. This is not the first time this practice has been used by the Chinese authorities. In July 2022, Premier Li Keqiang met with the heads of the five coastal regions to urge them to make adjustments to political strategies to maintain the economic system, which was on the verge of a downturn amid the coronavirus pandemic.

China’s recovery from Covid-19 has proved to be a very difficult process. The country’s economic system cannot generate and implement a positive impulse due to several factors, including the crisis in the sphere of real estate, debt risks of local authorities, and the tense situation in the geopolitical arena.

Beijing has introduced stimulus measures to bring the economic growth rate to about 5% this year. Experts believe that China will be able to repeat this result next year. At the same time, they note that in 2024, the process of achieving the economic growth target will be more difficult.

Currently, local officials in China are considering their targets for next year, which are expected to be outlined in mid-January during sessions of provincial legislatures. The provincial data will help to understand Beijing’s national economic development goal, which will be officially approved at the beginning of March at a meeting of the National People’s Congress.

Ding Shuang, chief economist for Greater China and North Asia at Standard Chartered Plc, says that the targets to be set by local authorities will be significant since officials will face serious consequences if there is no result. According to the expert, most of the rich provinces avoid a lower target than 2023. Ding Shuang notes that this will not be easy to achieve, as the beneficial base effect is waning.

The authorities of the provinces of Jiangsu, Shanghai, Sichuan, and Anhui also promised to make a greater contribution to national economic growth. The total share of six regions, including Zhejiang and Guangdong, in the structure of China’s gross domestic product is about 40%.

The wealthy coastal provinces of Fujian and Shandong did not respond to the call of the central government to join the general declaration of efforts to stimulate economic growth.

Local authorities also have promised to eliminate risks in the real estate sector. Fujian plans to facilitate investment in this sphere. Yunnan intends to stabilize the situation in the real estate market. The authorities of this province recognized that the local economy is at the most critical point for transformation and modernization.

As we have reported earlier, China’s Biggest Banks Lower Deposit Rates.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.