Category Archives: GDP

Zhuhai grows 6.8%, upbeat on services

Zhuhai got a boost last year from the final stages of construction of the Hengqin Railway Station, which is due to open soon, but its economy has also been doing surprisingly well thanks to growth in tech manufacturing and services, latest preliminary data shows.

The city’s leadership announced this week GDP growth of 6.8%, putting Zhuhai tied with Foshan and behind only Dongguan and Shenzhen (+7% each) among the GBA’s fastest-growing cities.

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Shenzhen mayor says city just changing gears

Shenzhen’s mayor, Chen Rugui, sees no cause for concern in the city’s recent economic slowdown, pointing out that quality is more important than quantity. Industrial upgrading is causing some challenges as traditional industries either become more valuable through infusions of technology, or move out of the city, yet the mayor is upbeat about the future.

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Dongguan holds off Foshan atop GBA in 2019

We wrote last week about Foshan’s mayor being so excited at the story he had to tell regarding 2019 that he couldn’t wait for the official release of GDP data to announce Foshan had joined the trillion-yuan club. We didn’t know then just how excited he was, because he didn’t give a detailed figure. Over the weekend, he did: 1.08 trillion yuan, to be precise. That represents a sharp 8.6% growth in nominal GDP in 2019, which very nearly pushed Foshan past Dongguan for the title of fastest-growing GBA city in 2019.

Nearly, but not quite. Dongguan is estimated to have grown 7.0% in real terms, slightly faster than Foshan’s 6.8% real growth rate. So did Shenzhen – 7% – although neither city has released full details of their GDP data like Foshan’s mayor did.

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Huizhou targets 6% growth in 2020

This is the year when Huizhou realizes the goal of building a moderately well-off society and eliminates poverty, according to its mayor. It can achieve this by growing its economy by 6% YoY, which would be faster than the 4.8% it recorded in 2019.

He obviously has some cause for optimism. Despite GDP being less stellar than expected in 2019, due largely to a slowdown in traditional export-oriented industries, investment growth has been strong and the municipality is focused on tech upgrades in the coming year. Moreover, per-capita income growth was strong in 2019, coming in at above 9%.

Growth will be focused on quality improvements in livelihoods, the mayor said, with environmental protection being a high priority.

Read more (in Chinese)

Jiangmen bullish on economy in 2020

Jiangmen’s leadership, like its counterpart in Foshan, obviously can’t wait for the National Bureau of Statistics to collate its GDP data for 2019. The city put out a report via local media today saying that its economy was expected to have generated more than 300 billion yuan, once the full-year numbers for 2019 are released. 

If confirmed, this would not be something to crow about on its own. The report didn’t say what the growth rate would be. By our reckoning, 300 billion yuan would be only 3% up on 2018, second-slowest among the nine GBA cities in Guangdong.

However, what the report prefers to focus on is investment, which is usually a better indicator of future growth. In this, the city seems more confident, saying that in the first 11 months of 2019, its growth rate of utilized foreign investment ranked first in the region, while high-tech development had boosted industrial investment to fifth-highest in the province, with the number of high-tech enterprises exceeding 1,500 for the first time.

Looking forward, Jiangmen seems to be focused on establishing trans-regional state-owned enterprises with other cities. This will be one to watch in 2020. 

Hong Kong’s woes deepen as job cuts loom

With unemployment jumping to 3.2% by the end of November, and further job losses likely in the beleaguered airline industry, Hong Kong’s economic woes are starting to show up in official data as workers bear the brunt of the fallout from the city’s six-month-long protests.

Cathay Pacific, which employs 27,000, is putting on a brave face after announcing yesterday that passenger volumes were down nearly 50% in November. Several senior staff have just resigned, but no mass layoffs have yet been announced. Hong Kong Airlines, however, seems to be on life support, with planes impounded, and it seems highly unlikely the carrier will survive as passenger throughput in Hong Kong continues to nosedive.

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Huizhou slows further

Huizhou’s economy slowed further in October, with industrial output and retail sales both down, according to the latest official data. However, fixed-asset investment is kicking in.

From January to October, industrial output grew just 2.3% YoY, 0.4 percentage points down from the year to September. The traditional staple of the electronics industry grew by just 1%.

Fixed-asset investment surged by 15.5%, accelerating in October to grow 1.7 percentage points faster than the year to September, and 11.2 percentage points faster YoY. Industrial investment rose 21.8%, 3.4 percentage points up from the year to September; infrastructure investment grew by 19.3%, 0.1 percentage points up; and real estate investment increased by 21.1%, 1.1 percentage points up.

Total retail sales grew by 8.1%, 0.1 percentage points slower than the first three quarters. Among them, wholesale, lodging and catering industries have seen faster growth while retail industry has seen slower growth at 8.5%.

Prices kept rising, with CPI jumping 2.8% from January to October, 0.1 percentage point up from the first three quarters. All categories of products listed, except traffic and telecommunication products, rose.

Guangdong industrial profits outperform

As has been well-documented by now, the Greater Bay Area has been hit harder by the US-China trade war than the rest of China. This is simply because it was more exposed to external trade when the tariffs began to be imposed; the higher you are, the further you have to fall. However, the region has certain strengths that are holding up, and it looks increasingly like it will recover quicker and be in better shape once the inevitable upturn in the country’s credit cycle begins again. 

The most important of these strengths are Guangdong’s longer history of international trade, and its greater weighting toward private enterprise. These enable the province’s leadership, in politics and business, to pivot more quickly when external circumstances change. That is what seems to be happening now, as companies trim costs and refocus their sales teams on domestic consumers while exploring new overseas markets along the Belt and Road Initiative. 

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