November 3, 2023
BEIJING – Over half of the 31 provincial-level regions in the country saw their year-on-year GDP growth outperform the national average in the first three quarters, indicating that China’s economic recovery is gaining a firm footing across regions.
Considering the continued recovery trend and supportive policy measures taking effect gradually, analysts believe the fourth-quarter GDP and the full-year GDP will likely expand by over 5 percent, higher than the 2023 annual growth target of around 5 percent.
They expect more policy easing in the near term to expand effective demand and boost market expectations. Possible moves include a further easing of homebuying restrictions, further cuts across key policy rates and another reduction in the reserve requirement ratio, they said.
As of Thursday, 31 provincial-level regions had released their economic growth results for the first nine months. Seventeen areas outperformed the national growth rate of 5.2 percent year-on-year in the first three quarters, with the Tibet autonomous region, Hainan province and the Inner Mongolia autonomous region registering 9.8 percent, 9.5 percent and 7.2 percent, respectively.
During the January-September period, 11 regions including Sichuan and Hubei provinces and Chongqing reported higher GDP growth rate than in the first half of the year.
A total of 13 provinces and regions saw their GDP exceed 3 trillion yuan ($411 billion) in the first nine months, with GDP of Guangdong and Jiangsu surpassing 9 trillion yuan in the first three quarters.
“Several provincial-level governments have already announced incentive measures to encourage growth in the current quarter and meet their annual growth targets,” said Feng Jianlin, chief economist at Beijing FOST Economic Consulting Co.
Citing steps announced by the regions such as upgrading of traditional industries and creating new growth drivers, he said these will not only stabilize growth but also help promote the transformation and upgrading of economic structure.
He said he believes the regions will focus on unleashing consumption potential and expanding effective investment in the coming months.
“We expect the Chinese economy to grow 5.1 percent to 5.4 percent in the fourth quarter, with an anticipated full-year growth rate of around 5.2 percent in 2023,” Feng said.
“To achieve the annual growth target, growth should be more than 4.4 percent in the fourth quarter,” said Yang Jinghao, chief economist at Concat Data Technology (Hangzhou) Co. “Thus, I have a rosy view of China’s economic growth this year.”
Yang added that the six provinces that account for nearly half of China’s economy — Guangdong, Jiangsu, Shandong, Zhejiang, Henan and Sichuan — will strive to meet the objectives set for economic development this year.
The regions that have not been able to record growth higher than the national average should focus on consolidating the foundation for economic recovery, he said.
“Several regions have disclosed plans to issue special refinancing bonds, which will help alleviate fiscal pressure on local governments and resolve debt risks tied to local authorities,” Yang said. “Those new moves alongside favorable base effects in the fourth quarter mean China will likely report better economic results in the fourth quarter.”
Given a series of policy measures taking effect gradually and the anticipated steps by policymakers to further bolster the economy, Ye Yindan, a researcher at the Bank of China Research Institute, said he expects China’s GDP to grow around 5.7 percent in the fourth quarter, with an anticipated full-year GDP growth of around 5.3 percent in 2023.
However, Feng from Beijing FOST Economic Consulting warned of pressures from the still-weak demand and stress in the property sector.