Provincial data on public and private finances paint a picture of frugal, hardworking people who are also not afraid to spend. The US-China trade war might take a wrecking ball to the economy in the coming months, but if it does, there are good reasons to believe that Guangdong will have a better chance at getting through it than most other economies facing similar external pressure.
Indeed, despite having to turn on the infrastructure taps from January to April, which resulted in a 14.8% jump in government expenditures, Guangdong still saw government revenue grow 5.8% to RMB445 billion.
And while outstanding loan balances at the banks jumped in the same period, 16.4% to RMB15.4 trillion, deposits also grew 9.9% RMB 21.8 trillion. This was driven by household deposits, which increased 15.3%.
Savers are not panicking. Retail sales continue to grow at above-GDP rates. Meanwhile, consumer prices rose by 2.3%, an increase of 0.1 percentage points over the first quarter and just the kind of number policymakers like to see. Producer prices remain under pressure, rising by 1.0%, but that is at least an increase of 0.1 percentage points over the first quarter.