the provincial government leaked Shenzhen’s GDP headline number for the first
three quarters yesterday, causing a rush of commentary by bloggers and
real-estate analysts, the city government decided today to clarify the reasons
why its economy slowed so sharply, to 6.6% from 7.4% in the first six months.
the report was full of numbers that the
Shenzhen Daily tried to portray in a positive light.
the heart of the data was an unmistakeable weakness: a sharp slowdown in
industrial output and input, as we had expected in our report published
Continue reading Shenzhen confirms 6.6% growth, blames nothing
More detail is dribbling out in
local media after Guangzhou reported strong GDP numbers last week. One of the
clear standouts was growth in the services sector, especially the so-called
“modern services industry”, which is dominated by software and other IT-related
Although the city is often
thought of as a bastion of heavy industry and manufacturing, while Shenzhen is
usually described as the “tech hub”, Guangzhou’s economy is increasingly being
driven by software and other IT-related services. According to official data, this
sector accounted for 68.6% of Guangzhou’s GDP in the first three quarters, an
increase of 0.1% over the first half of the year. Its added-value was up 15.5%
Continue reading Services pumping in hi-tech Guangzhou
is going on in Shenzhen. The city has not yet released any reports on its
economic performance in the first three quarters, yet provincial data show that
the city’s GDP growth dropped sharply in Q3.
commentators have been reporting the provincial data today, many with alarmist
analysis. This is rightly so: the 6.6% growth number recorded by Shenzhen for
the first three quarters of this year follows 7.4% reported for the first six
months. If accurate, that is an unprecedented quarterly slowdown.
Continue reading Shenzhen sees sharp slowdown in Q3
The Greater Bay
Area’s fastest-growing economy is not Guangzhou or Shenzhen, but Dongguan,
which saw its GDP rise 7.2% in the first three quarters of this year – an
acceleration from 6.9% recorded in the first half.
Driving this growth
was the city’s staple of manufacturing – both in terms of output and input. In
the year to end-September, the added value of industrial enterprises above
designated size rose by 8.0%, while fixed-asset investment surged by 18.1%.
September seems to
have been a particularly strong month. Industrial production was up 15.9% over
August, which was a clear departure from a steadily slowing month-on-month
trend up to that point.
Continue reading Dongguan tops GBA growth charts
As we reported earlier this week, Guangzhou is putting in a relatively strong economic performance this year, despite the worst effects of the US-China trade war weighing on trade, the city’s traditional engine of growth. This is largely because it has new growth nodes, not only in certain industries or sectors, but also in its key districts. It is made more evident by a breakdown of the sum of its parts, which shows some of those parts are doing incredibly well, while others are lagging.
Continue reading Guangzhou: the sum of some parts
Retail sales continue to be a pillar of strength for the Guangzhou economy. In the first three quarters, they rose 8.2% to RMB 734.695 billion. This was well above the 7% target set for the year, and 0.6 percentage points higher than the same period last year. After a blip in the early part of the year, it has stabilized at more than 8% for five consecutive months.
This is music to local officials’ ears, of course. Against the backdrop of the difficult external trade environment, local demand has had to fill the gap. This it appears to be doing, as consumers, businesses and government all opened their wallets to spend on consumption, not just investment.
Two key drivers of consumption have been cross-border e-commerce, and the booming “night economy”.
Continue reading Retail sales keep growing
Industrial upgrading is paying off for Guangzhou. In the first three quarters, high-tech manufacturing grew 20.9%, 0.3 percentage points faster than that of the first half of the year. It now accounts for nearly two-thirds of total industrial output.
A key driver of this (pardon the unavoidable cliché) is the New Energy Vehicles industry, in which output soared (+81.9%) as Guangzhou Auto Corp ramped up new production lines. Next year, the city’s NEV annual production capacity will reach 300,000 units.
Guangzhou has been focused on creating clusters of innovation in a few key areas. It has heavily ecouraged R&D investment with various incentives, which has led to the establishment of 495 enterprise technology centers, including 326 provincial-level enterprise technology centers.
Continue reading Industrial upgrading clicks in Guangzhou
Economic data from the first three quarters of the year shows Zhuhai’s tourism industry continuing to grow strongly, while the construction industry is taking off – also an indicator of the city’s potential in tourism as major projects are being built.
GDP of RMB 228 billion for the first three quarters was up 6.4% YoY, in line with the provincial average. The construction industry, which saw output soar 30% to RMB62 billion, accounted for 5.5% of the entire province’s total. For a city of under 3 million people, that is remarkable. Its value-added contribution to the city’s overall GDP was 8.5%.
It is not surprising, however, as Zhuhai’s construction industry is focused on major projects designed not so much for local needs as for bringing in significantly larger headcounts of tourists. This is especially in the special economic zone of Hengqin, facing Macau’s Cotai Strip, where the country’s second-biggest train station is being built. When it opens on December 20, the Hengqin Railway Station will have a throughput capacity of 80 million passengers annually. It will be second only to Shenzhen’s Futian Station.
Continue reading Zhuhai’s tourism future comes into focus
Foshan’s economy is gaining steam, with GDP bouncing back over the course of this year after a slowdown in 2018. The GBA’s fourth-biggest economy clocked up a strong 7.1% growth in GDP during the first three quarters of the year, with its major industries driving the recovery while output in financial services continues to surge. This was up on Q2’s 6.9% and Q1’s 6.7%.
GDP of RMB 793.179 billion was held up by manufacturing, at RMB 460.593 billion, up 6.7% YoY. Financial services jumped 11%.
Trade was relatively stable, although still weighed down by the US-China trade war. Exports came in at RMB 280.77 billion, up 4.9%; imports were RMB 81.83 billion, up 4.6%. September was particularly strong, with total trade up 21.5% YoY to RMB 44.48 billion. Like its similarly sized neighbour across the Bay, Dongguan, Foshan is seeing strong growth in cross-border e-commerce, albeit from a small base of RMB 5.02 billion, up 88% in the first three quarters.
Trade with the US continues to languish, up only 0.4% YoY. But growth in trade with ASEAN (+12.1%) and the European Union (+11.2%) was good.
Guangdong’s economy showed resilience in Q3, outperforming the national average, as it has done all year. GDP of RMB 771.192 billion for the year to end-September was up 6.4% YoY, only 0.1 percentage points slower than the first six months of the year. The Q3 number of 6.3% was well above the national 6.0%.
Driving this growth was the services industry. Manufacturing (+4.6%) and agriculture/mining (+3.8%) were stable, but tertiary output (services) was up a strong 7.9%.
Even better was the outperformance in manufacturing of the private sector, which grew by 7.1%. This was primarily driven by consumer electronics, up 7.5%, and the electrical machinery and equipment manufacturing industry, up 8.2%. Smaller but more promising industries stood out for surging growth: new energy vehicles jumped 76.0%; EMUs (trains) were up 66.7%; and 3D printing equipment soared by 270.8%
Fixed-asset investment continued to grow strongly, up 11.3% in the first three quarters, with infrastructure investment leading at +23.7%. The Guangzhou-Shenzhen-Dongguan Intercity Railway, which opens on November 1, was a key part of this growth.
Retail sales were up 7.8%, the highest growth rate since the beginning of this year. Sales of consumer upgraded goods grew rapidly.
Trade continued to soften. Exports stayed in positive territory, but slower, at +2.1% YoY growth. Imports fell, but the -4.7% number was slightly better than the previous -5.1%.
Unemployment was 2.16%, down 0.26 percentage points YoY, while per capita disposable income rose 8.7% to RMB 30,755.