Six China provinces to have Russia-sized GDP by 2020
BEIJING, December 14 - The economies of six provinces in China will be as big as those of Russia or Canada by 2020, a study has shown, highlighting the challenges faced by Beijing as it tries to cool the red-hot economy.Describing its forecast as conservative, British banking giant HSBC said China would resemble a "collection of second-tier developed world and leading developing countries" by the end of the next decade.
"Sizzling growth should continue for at least another five years," analyst Zhang Zhiming said in a report titled "Inside the Growth Engine" and published this month.
Zhang forecast six provinces would have annual gross domestic product worth more than one trillion dollars by 2020 -- roughly equal to the economies of Russia, Canada, Australia, and South Korea.
The fast-growing provinces were the southern manufacturing hub of Guangdong, Hebei in the north, Shandong, Jiangsu and Zhejiang in the east and Henan in the centre.
The World Bank expects China's entire economy to grow 10 percent this year before slowing to 8.7 percent in 2011 -- well above the government's oft-stated full-year target of eight percent.
But provincial growth rates could be much higher as local officials seeking to improve their career prospects try to impress their bosses, Zhang said.
"Local governments have managed to beat Beijing's growth targets by a few percentage points every year since 1980," Zhang said.
"Provinces have far more ambitious plans for the expansion of their rail networks and clean energy activities than those stipulated by national targets. In some cases, the local target is double the national one."
Zhang said one of the reasons was "to get promoted in China, you have to outperform your peers."
Some local officials with "vested interests" resist orders from Beijing to implement policies, Zhang said, pointing to the central government's unsuccessful efforts to try to rein in soaring property prices.
"Beijing launched its fierce crackdown on property speculation in April -- and yet eight months on, not only have prices barely moved downwards, volumes actually rose again in September and October," Zhang said.
"Not a single city has rolled out the much-expected property tax."
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