“Later on I learned my peers also received calls and were asked if they needed goal-setting help,” he said. “We were told to ‘get bolder’ with a ‘moderate to high’ growth target next year.”
02:39
China’s economy sees a resurgence in the third quarter, beating forecasts
China’s economy sees a resurgence in the third quarter, beating forecasts
These powerhouses usually refer to Guangdong, Jiangsu, Zhejiang, city of Beijing, Shanghai, Shandong and Fujian, with each having a gross domestic product exceeding 3 trillion yuan (US$421 billion) in the first three quarters of this year, representing 46 per cent of the national total.
“It is not always counterproductive as long as growth goals [being negotiated and assigned] are realistic,” Zhu said. “The key is if exporters will be ‘set free’ to chase goals, and if they feel confident to invest.”
A customs official in the coastal city of Ningbo told local media earlier this month that a recent survey of firms had pointed to “recovering optimism on the ground,” with more exporters indicating increases in orders.
Hong, who also lives in Ningbo, said he anticipates more shipments to Walmart in America and Tesco in Britain next year to claw back some lost orders. His company’s exports began to plateau in mid-2022 and then this year plunged 20 per cent to US$7 million.
He was interested in the hint of “appropriate help” from the local government as he was urged to be bolder in goal-setting and strive to achieve those targets next year.
A higher export growth target is vital for Ningbo, with its sprawling manufacturing sectors and one of the world’s largest container ports, in order to cross the GDP mark of 2 trillion yuan and enter the nation’s top 10 elite league.
The city’s GDP is on track to hit 1.7 trillion yuan in 2023, ranking 12th nationally. That means if the target is set with one year to complete, it implies a 17.6 per cent nominal growth.
“It’s like Beijing assigns higher goals to Zhejiang, then the province passes that to trade hubs like Ningbo, and then the city is rushing to urge businesses at the coalface of the export economy to do more,” said Chi Qiaoyu, a deputy director with Ningbo Foreign Trade Services Centre under the city’s bureau of commerce.
Ex-Beijing official urges foreign investors’ return, hails US-China trade
Ex-Beijing official urges foreign investors’ return, hails US-China trade
For places like Zhejiang, which has jurisdiction over Ningbo, it has to fire up trade to lead growth. The province’s trade dependence ratio – the proportion of trade in GDP – was 60 per cent last year while Ningbo’s figure was 80 per cent. The nationwide average was 34 per cent.
Both Zhejiang and Ningbo, like elsewhere across the country, will convene their annual People’s Congress sessions early next year, in which they will announce economic targets for things such as GDP growth.
The goal to reach 2 trillion yuan GDP or become a top 10 city was actually handed down by Zhejiang party chief Yi Lianhong this month as provincial leaders discussed implementing the host of pro-growth mandates from the central economic work conference, according to a source.
Cadres of the province, well-known for its thriving private sector, have been told to “sink down to the ground” and doorknock businesses to learn their needs. They are also trying to come up with new supportive policies.
Ningbo and other cities, like Taizhou and Yiwu, are vowing to crank up support like easier, cheaper loans, even though orders are expected to trickle back next year, according to documents viewed.
Alex Ma, an associate professor of public administration at Peking University, said fostering such positive interactions between local officials and enterprises could help improve the regional business environment.
But the province’s business dynamics could be affected by such an allocation of growth targets, he noted, as businesses there were used to minimal interventions and Zhejiang cadres would normally “keep their noses out”.
“Entrepreneurs should be left to their own decisions,” he said.
Hong, after phone calls back and forth, finally agreed to aim for a 15-20 per cent growth for 2024, on the condition that he could secure more support from the local authorities.
There are still doubts among private entrepreneurs about how much local governments can help, either via funding or policies, as external uncertainties and China’s waning ties with the West continue to cast a pall over future prospects.
Chen Yi, general manager of Ningbo Dijia VIDA Trading Co, said she was happy that the government would foot a bigger share of her travel expenses as she attended business expos abroad.
In July 2022, she was among a planeload of lucky factory owners and business executives who were granted special permits to fly to Europe on China’s first special flight chartered by a local government to meet foreign clients, long before China abolished its zero-Covid policy at the end of last year.
But more than a year on, a turnaround is yet to come and she finds big orders are getting harder and harder to come by.
“[Western buyers] have either found backup suppliers in Southeast Asia in the past three years [of China’s Covid control] and the long trade war or are requesting us to slash prices further due to Europe’s inflation,” she said.
14:45
An unwinnable conflict? The US-China trade war, 5 years on
An unwinnable conflict? The US-China trade war, 5 years on
Ying Xiuzhen, general manager of China-Base Foreign Trade Co Ltd, was quoted as saying in a Ningbo media report that much of China’s supply chains were built to suit the need of foreign trade, mainly with the US and the EU.
“If production and orders are shifted elsewhere, together with technologies and investments, the world’s factory may repeat the fate of deserted US auto cities like Detroit,” she warned.
China-Base is one of the largest private exporting conglomerates in Zhejiang with a number of downstream micro-exporters and OEM (original equipment manufacturing) factories.
Justin Xu, owner of a lighting equipment company in another city in Zhejiang, has been enduring slack sales since July 2022. His business’s exports plunged 30 per cent this year, for which he blamed the West’s decoupling and “involuted” competition.
“The government now tells us to export more next year and shift focus to Southeast Asia and the Middle East, but if new markets can be that easily tapped, we would have gone there already,” he said.
He added that it took time and money to change design and manufacturing that catered to Western customers to suit new markets.
When asked what the government should do to really help, Xu said, “No more wolf warriors and restore good ties with America and Europe so we could continue to trade with them.”