Bonus Issue: Estimating China's 2023 Official GDP Growth Target

Aggregating provincial GDP targets, we expect the official GDP target of China to be stated as "above 5.0%"

After the end of Zero-COVID policy in 2022, there are more mixed views about China's economy in 2023. Would it rebound strongly or would it climb slowly?

Many are paying attention to the official GDP growth target, which typically will be released in Report on the Work of the Government, to be announced on this Sunday morning. When the government considers its "Official GDP Target", it does not only take estimates of GDP, but also targets & back-and-forth from local governments, social morality, overall government strategy, the signaling effect it wants to create for the year into consideration. With that in mind, we calculate the weighted average of the provincial GDP growth targets, which was 5.6%, to help predict China's official 2023 GDP target.

In 2022, the official national GDP growth target was “around 5.5%", which was lower than the weighted average of 6.1% as targeted by the provinces, but equal to provincial targets of some of the largest provincial economies such as Jiangsu, Guangdong and Shandong. If this year follows the previous pattern, the national target would be 5% or slightly above 5%, which will be lower than what some of the international news agencies have claimed. For example, Reuters and Wall Street Journal both cited sources who claimed the national target could be “up to 6%”. If that’s true, it will be a full one percentage point higher than provincial targets of largest provinces such as Guangdong, Jiangsu, Shandong and Zhejiang, potentially leaving them in a difficult situation.

Targeting 5% would also be inline with the spirit of 2nd plenum of 20th Party Congress, which said "taking measures to push for stabilization of growth of the economy 着力推动经济稳步回升" while focused a lot on structural work of the economy. This could also be supported by the messaging during learning sessions of the 2nd plenum held by many provincial party committees, where effort to "reach” targets rather than "exceed” targets were being discussed about.

With that said, we also recognize that the central government is likely to boost morale by presenting a more upbeat message than a mere “5%”, especially since this is the first year of the new team at the State Council and many provincial governments. So in the end the final phrase could be something along the line of “5%以上 more than 5%“, similar with the phrasing of provincial targets of Guangdong and Shandong.

Below is a table containing the GDP, GDP target, and actual GDP of 2022-2023 by all the provinces.