Assoc Prof Alfred Wu from the Lee Kuan Yew School of Public Policy (LKYSPP), highlighted that similar targets set across provinces reflect a top-down approach.
“Everyone just tries to keep it between 4.5 to 5 per cent,” he said.
“All local leaders now know the taste of central government, so they will not actually take any risk,” he added, noting that the “deviation is much smaller” in statistical terms.
Meanwhile, China’s highly centralised system enables it to achieve around 5 per cent GDP growth “if there is political will to do so”, said Dr Lim Tai Wei, a professor at Japan’s Soka University.
He cited the effectiveness of subsidies in the consumer goods trade-in programme and the “mobilisation of netizens” in promoting Nezha 2, which boosted cinema ticket sales and tourism, as examples of successful economic stimuli.
BOOSTING CONSUMPTION A TOP PRIORITY
China’s GDP grew 5 per cent last year, down from 5.2 per cent in 2023. This year, its economy faces a raft of external and internal pressures.
Domestic demand remains sluggish. On the foreign front, uncertainty is growing with US President Donald Trump stacking an extra 10 per cent duty on Chinese goods – effective Mar 4 – on top of the 10 per cent already levied on Feb 4, bringing total additional tariffs to 20 per cent.
“It is unsurprising that some provinces may choose to take a more cautious outlook,” said Song.
“It makes sense to hope for the best but prepare for the worst, so it would be good to set into motion policies that can help support domestic demand in the scenario where external demand weakens thanks to more trade protectionism abroad.”
It is obvious that boosting domestic demand will be critical in 2025, said Assoc Prof Wu.
“They are realistic about exports. So now, the only option is to boost domestic consumption,” he added.
China Galaxy Securities noted in its report how among the 31 provinces, 16 have explicitly listed promoting consumption or leveraging consumption as a key measure to expand domestic demand in their annual priority tasks.
For instance, Shanghai pledges to “vigorously boost consumption”, while Hebei focuses on “investment to promote consumption”.
Source: CNA
