Although China's economy only needs to grow about 7 percent yearly to fulfill its goal for the 11th Five-Year Program, almost all provincial governments plan to make their local economy run at an annual rate above 9 percent, The Economic Observer reported early this week.

According to the central government's plan, China should put more focus on balanced economic and social development, environmental protection and income distribution, rather than pure economic growth in a mathematical sense.

The higher GDP (gross domestic product) goal set by local governments, however, may still shift local budget emphasis to fixed asset investment and infrastructure construction, instead of the social service sectors that are vital for building a harmonious socialist society, the newspaper said.

The GDP goals planned by the central government are usually more conservative than local ones. The central government set its GDP growth goal in 2005 at only 8 percent, though it turned out to be 9.9 percent on the back of improved efficiency, mild inflation and enhanced vitality.

The central government wants to cool down the overheated investment enthusiasm of local governments through lowering GDP goals, said the newspaper.

According to publicized materials, coastal Shanghai, Zhejiang, Fujian, Guangdong and Hainan planed an annual 9-percent GDP growth from 2006 to 2010, while Hubei, Henan, Anhui, Gansu, Qinghai and Shandong set their goal at 10 percent.

Liaoning, Hebei, Tianjin and Jilin all targeted a GDP growth above 10 percent in the next five years, and north China's Inner Mongolia Autonomous Region even set its goal as high as 13 percent.

During the 11th Five-Year Program period, fixed asset investment in northeast China's Jilin Province is expected to grow about 20 percent yearly, and in 2006 and 2007, the growth rate will exceed 35 percent and hit a new high, said Jiao Haikun, director of the Development and Reform Commission in Jilin.

Not only Jilin, but many other provincial areas have also base their economic boom on rocketing investment.

In the next five years, fixed asset investment in northwest Gansu Province is expected to hit 670 billion yuan (83.75 billion U.S. dollars), exceeding the total volume in the past 50 years.

Although China is facing a series of grievous problems such as shortage of energy and raw materials, environmental pollution, oversupply and transportation bottlenecks, no local governments regard their region as overdeveloped or are willing to quit the high-speed economic growth.

The central government is trying to restructure the official achievement evaluation system by introducing the new concept of green GDP, which would calculate environmental and ecological costs along with economic growth.

Local officials' achievements may be offset if costs are too great.

"But as the most important index reflecting regional economic growth, GDP growth is no doubt still the goal pursued by local governments," the newspaper said.

Source: Xinhua