China Provinces Target Sizzling Growth, Challenging Beijing

Chinese provinces, from northeastern Heilongjiang to southwestern Yunnan, have set ambitious growth targets for this year and into the future, challenging the central government's goal of reshaping the economy along more sustainable lines.

Officials in Beijing are trying to cut the economy's reliance on pollution-belching, energy-guzzling factories and to put the brakes on a housing construction boom that could turn into a potentially destabilizing asset bubble.

That desire for moderation is expected to be expressed in target of 7 percent annual growth in the government's five-year plan for the 2011-15 period, well down from the 11 percent average pace of the past five years.

But local cadres are not showing similar restraint. They are still chasing high-octane growth.

According to published proposals, the provinces of Anhui, Fujian, Chongqing, Guizhou, Heilongjiang, Guangxi and Yunnan would like to double local gross domestic product (GDP) in the next five years, which would translate into an annual growth of about 15 percent.

Inner Mongolia, which led all Chinese regions with annual average GDP expansion of 18.7 percent from 2002 to 2009, said it was aiming to "maintain faster growth in major economic indicators than the national average".

"The biggest issue in China's economy may be the conflict between the central government and local ones," Long Guoqiang, a researcher with a think-tank under the State Council, told the China Economic Times on Tuesday.

"Local governments never worry about economic imbalances or over-heating. Over-heating is not in their dictionary. Eighty percent growth in GDP would still be okay for them," Long said.

Rebalancing?

In part, faster growth for places such as Guizhou and Guangxi, two of China's poorer provinces, fits into the government's objective of fuelling the rural interior to catch up with the long-booming coastal areas.

The problem is that some of the wealthier provinces of the world's second-largest economy are still setting their sights on big numbers. The eastern province of Jiangsu has proposed aiming for an annual average of 10 percent growth over the next five years.

Hu Angang, a professor with Tsinghua University and an adviser to China's top leadership, said that the rate of growth, not the quality of growth, was still the biggest pursuit of many local Chinese officials, even though they pay lip service to slogans about 'green development'.

"It is a typical practice of flashing your left-turn indicators but turning to the right," Hu wrote.

"If it continues, China will fail to achieve its goal of changing its economic growth model," he added.

Career prospects of local officials are determined by performance reviews that place much more emphasis on growth figures in their jurisdictions rather than the quality of public services they deliver.

Many scholars, including Hu from Tsinghua, have proposed that China should change the assessment system to steer the economy in a healthier direction.