Category Archives: GDP

China sees sharp drop in August; still waiting for Guangdong

The Chinese economy slowed sharply in August, preliminary data shows. Although trade data has not yet been released, output and investment are both down significantly, sending stocks lower on regional indices. (Trade is likely to be worse, if recent trends are a guide.)

Guangdong, meanwhile, has yet to release its full GDP data for July, let alone August. One can only presume that it is taking the National Bureau of Statistics a bit longer than normal to verify the provincial data from around the country. That, or there is growing sensitivity about their release that requires further internal debate and clarification. 

Continue reading China sees sharp drop in August; still waiting for Guangdong

Lam unmoved by Li’s ode to the downtrodden

Li Ka-shing, Hong Kong’s richest man, can’t seem to get an audience with the Chief Executive. How else is one to understand his public plea for the protesters to be “given a chance”? Unless, of course, the billionaire was aiming his comments at the public and had no need of a meeting with the person who has the power to to address #3 on the protesters’ list. That is possible. But why might the 91-year-old retiree feel the need to feel the protesters’ pain? Or rather, why now, rather than at any time over the past 22 years since the handover, a time in which he has, along with his fellow oligarchs, steadily reduced their living space, held their wages stagnant, and raised their cost of food?

In any case, the plea seems to have fallen on deaf ears. CE Carrie Lam chose today to focus on other more pressing issues. Read the SCMP’s wrap here.

Would Hong Kong be ‘destroyed’ by US bill?

After another weekend of mayhem in Hong Kong, during which the Central MTR station was set on fire, it was heartwarming to see schoolkids today lined up, holding hands, as a reminder that most of Hong Kong’s protesters are peaceful. Junius Ho, legislator and apparent supporter of the White Shirts, may not like it, but if this is the way all the protests can be held, Hong Kong has a better future ahead.

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Guangdong: It’s what comes next that counts

A closer look at data comparing the Greater Bay Area to the rest of the country might give cause for concern: although the economy here is growing faster than the national average, it is largely due to rising investment levels rather than industrial output (i.e., we are spending more than we are making). 

Guangdong’s manufacturing output saw a steep drop (well, steep by Chinese standards) in Q2 as the trade war began to bite.


It doesn’t take a rocket scientist to figure out why. The province’s industrial machine has for decades been heavily geared toward foreign trade. Now, exports and imports are falling here at a rate faster than the national average because Guangdong is more exposed to the loss of demand from its traditional trading partner. 

However, none of this should come as a surprise, and it should not be cause for alarm, either.

Continue reading Guangdong: It’s what comes next that counts

Key indicator plunges in HK; govt to help SMEs

The widely watched Production Managers Index (PMI) for Hong Kong, provided by Caixin and IHS Markit, has plunged to its lowest reading since the financial crisis of 2009. This indicates that the economy is on course for its first recession in a decade, as business activity is increasingly disrupted by “protest-related paralysis”. 

As the report says: “Worries that both the US-China trade dispute and the local political situation will worsen in coming months, meanwhile, saw sentiment about the outlook plunge to the lowest since data on expectations were first collected in 2012.”

Read more on HIS Markit’s website.

Meanwhile, the government is not waiting around for the criticism. It has launched a program to help SMEs get access to credit. China Daily has the patriotic details.

Shenzhen companies lock in profits

Shenzhen has 2,179 companies that disclosed semiannual reports for the half year up to August 31. And thanks to the beavers at the city’s statistical data office, we now know that 80% of them are in the black, and half are growing positively YoY.

Their combined revenues came to RMB5.953 trillion, which is up 9.36% in the first half, generating net profits of RMB407.961 billion, down 0.87%. 1892 companies, accounting for 87%, were profitable; the net profits of 1240 companies, which account for 57%, registered year-on-year growth; and the growth rate of 519 companies’ net profits was over 20%.

New industries like communication, electron and artificial intelligence are showing the fastest growth. Communication firms recorded net profits up 278.69%, with 23 companies achieving at least double-digit growth. 

According to the Shenzhen Stock Exchange, 989 companies are listed as “new strategic industrial companies”, of which 863 were profitable, with revenues of RMB2.323 trillion, making up 40% the total revenues in Shenzhen.

It is also notable that “new strategic industrial companies” in Shenzhen invested RMB130.132 billion in R&D, up 30.21% YoY.

GBA in numbers

We just updated our numbers for the 11 cities of the Greater Bay Area. Sorry it took so long to get around to it. We were reminded to do so today while attending a conference at which 2017 numbers were trotted out to show that the GBA was on track to overtake South Korea in the global economic rankings. In fact, at the end of last year, the GBA leaped ahead of that country into #11. By next year, it will surely be in the Top 10 once it vaults past Canada.

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Infrastructure, industries, keep Shenzhen humming

Shenzhen continues to weather the slowdown in foreign trade remarkably well, judging by data for July. Fixed-asset investment rose 16.2% YoY, powered by infrastructure investment (+46.9%). And, thanks to growth in the key industries of tech and pharmaceuticals, industrial output has held up (+6.1%), too. Only trade is showing weakness, and it’s far better than had been anticipated: exports were still up over the first seven months (+4.6%), while imports continued to struggle (-8.9%).

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Shenzhen’s ‘big four’ districts drive growth

Investors in China are wringing their hands after economic data for July showed declining indicators across the board. However, until we get detailed data for Guangdong, it is hard to know what that national data means for investors in the Greater Bay Area. What we do know is that in the first six months of the year, the nine GBA cities inside Guangdong mostly outperformed the national average, with particular strength seen in the province’s two Tier-1 cities of Guangzhou and Shenzhen. Not only did they grow at rates nearly a full percentage point higher than the national average (7.1% vs. 6.2%), but their growth was accelerating over January to June.

Last week we explained how two of Guangzhou’s districts, Tianhe and Nansha, were propelling the city’s industrial upgrading in finance and tech. Today, we take a closer look at Shenzhen’s leading districts. Here, we see four, also being driven by growth in finance and tech, plus the buildout of the aerotropolis. They are: Nanshan (home to Tencent and others), Longgang (home to Huawei), Futian (home to Ping An) and Baoan (home to the airport).

Continue reading Shenzhen’s ‘big four’ districts drive growth