IF THERE IS one thing that is consistently less than the sum of its parts, it is China’s GDP. At least, if you add up provincial GDPs they usually total more than the national figure — confirming long-standing suspicions about the variable quality of China’s statistics below the national level. Which makes it all the more surprising that every province save for Tibet missed its 2014 GDP target, and mostly by a much more handsome margin than the national government.
For this year, provinces are lowering their targets numerically and downplaying their importance. One, Shanghai, is scrapping its altogether, becoming the first provincial-level government to do so. Shanghai missed its 7.5% GDP growth target for last year by a full one-half a percentage point, coming in at 7%.
That though was a closer miss than in Guangdong, which came in at 7.8% against a target of 8.5%. That, in turn, was a better performance than achieved in the rust-bucket northeastern provinces caught between China’s industrial restructuring and a sluggish global economy. Shanxi, Heilongjiang, Jilin and Liaoning all fell short of their 8-9% targets, growing at just 5-6%.
In all provinces, though, unemployment is becoming the more closely watched indicator. This year, Guangdong is shooting for 7.5% GDP growth with an unemployment rate of 3.5% as its primary target.
Beijing needs to focus more on structural reform than GDP growth. The provinces look to be prologue as Beijing seeks to wriggle off the hook of high growth targets from which the career prospects of layers of officials have dangled for three decades.
The question now is not whether ‘around’ 7%, 6% or even 5% growth is the correct level for sustainable long-term growth. It is rather whether the economy is providing sufficient jobs to ensure that the Party’s bargain of delivering rising living standards in return for a monopoly on political power holds.
Beijing is expected to announce next month a GDP target for this year of around 7%, down from last year’s around 7.5%. And it could morph from a target to a forecast. However, the new GDP maths is how many points of old-school headline GDP growth can be replaced by drinkable water, breathable air — and a decent job.