Provincial Growth Rates Pick Up At Bottom, But Still Off Target

This first chart shows the GDP growth rates for each province through the first half. The provinces way off, such as Gansu and Yunnan, are less important economically than Zhejiang, which is off by 10% (7.2% versus 8% target). Hebei province picked up considerably from it's first quarter growth rate of 4.2%——its first half growth rate climbed to 5.8%, which implies a roughly 7.4% growth rate in the second quarter. The second chart below has the first quarter GDP growth rate (right column) and the first half growth rate, but Hebei and Shanxi are cut off by the logo. Shanxi's Q1 GDP growth rate was 5.5%.

China eyes quality development despite slower growth
As China shifts its focus to a more balanced development model, gross domestic product (GDP) growth is decelerating in many parts of the country.

According to figures released by Hebei Provincial Bureau of Statistics (HPBS) on Wednesday, GDP growth of north China's Hebei Province in the first half of 2014 increased by 5.8 percent. But this was dwarfed by the 8.7 percent growth rate over the same period last year.

Hebei, which borders Beijing, has been trying to cut polluting facilities such as cement, steel and glass, the major powerhouses driving its economy, as the province is partly blamed for smog that has blanketed the Chinese capital.

"In the first six months, we have seen a 1.6 percent increase of the tertiary industry and a 1.5 percent decrease of the secondary industry in terms of GDP proportion," said Yang Jingxiang, deputy head of the HPBS.

A similar situation can be found in Beijing, which reported 7.2 percent GDP growth in the first two quarters, falling short of the 7.7 percent expansion recorded from January to June in 2013.

Beijing closed the Gaojing Thermal Power Plant, a subsidiary of the state-owned China Datang Corporation, on Wednesday, replacing it with a gas-fired facility to curb pollution. Three other coal-fired power plants are expected to be closed by the end of 2016.

Other provinces and regions, including Guangxi, Guangdong and Jiangxi, all reported slower GDP expansion in the first two quarters, as China drops the growth-at-all-costs economic development model that has tainted the country's air, water and soil.
The article goes on to note that GDP growth is not the sole criteria anymore, yet from the looks of things GDP growth is still the main focus. The 4.2% Q1 GDP growth rate in Hebei was low, but one could believe it was a quality number as they transitioned away from heavy polluting industry. This last quarter they managed to boost GDP to 7.4%. I doubt that was high quality investment, at best it was planned investment brought into the present, growth today at the expense of future growth. At worst, more capital destruction.

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