Shenzhen keeps engines humming

Like its big brother to the north, Shenzhen has used investment to keep the economy zipping along amid a challenging external environment. But unlike Guangzhou, its economy is already far along the path to restructuring, which is why its industrial output numbers are relatively better. And although retail sales lagged Guangzhou’s, shoppers were nevertheless not restrained, either. Overall, the economy is in good shape.

Official data shows that in the first five months, Shenzhen’s fixed-asset investment grew by a strong 18.3% YoY. This was largely due to some major projects on the western side of the city, including the reconstruction of the Dameisha Waterfront Park (a must-visit beach area); the Yantian Intelligent Supply Chain Logistics Park: the Fashion industry Park: and the construction of a permanent campus of the Shenzhen Foreign Language School. 

The city has set aside RMB1.89 trillion for no fewer than 471 major projects this year: 174 are early-stage projects with a total investment of RMB557.04 billion, while the remainder are major ongoing projects with RMB185.29 billion allocated. 

Infrastructure takes the lion’s share of the investment pie, up 53.2%. But most interestingly, foreign investment also surged, up 56.3%.  

Shoppers were not as aggressive as the women of Guangzhou, yet retail sales were still respectable, up 6.7% to RMB249.1 billion. Sales of household appliances and audio-visual equipment were the strongest, rising 9.8%.

It is the city’s industrial machine that is the most reassuring. From January to May, industrial output rose 6.9%, despite the ongoing effects of the US-China trade war. Given that exports have been sluggish, this is a remarkable performance and suggests domestic demand from within China is keeping the lights on in Shenzhen’s tech parks. Advanced manufacturing rose 10.4%, while high-tech manufacturing rose 11.0%.

The standouts were electronic equipment (+11.0%), pharmaceuticals (+19.3%) and – get this – the “culture, education, sports and entertainment-related manufacturing industry”, which was up 9.0%.

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