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).
Nanshan was the clear leader, with GDP of 269.839 billion in the first half, accounting for nearly one-fourth of Shenzhen’s total of RMB1.23 trillion. The district is not only home to Tencent, but many of the city’s best-known tech companies. It is where the Yuehai tech zone grew up (read our backgrounder). Moreover, it grew the fastest, too: up 8.6% YoY.
Longgang and Futian were not far behind, with Huawei’s home district chipping in RMB209.486 billion (up 8.1%) and Ping An’s home district doing a respectable RMB204.896 billion (up 7.2%). Baoan was nipping at their heels, rising 7.4% to RMB185 billion.
Nanshan is clearly going to take some catching, as it is the focus of some major investment projects. These include the Xilihu International Science and Education City and the Guangdong-Hong Kong Youth Innovation and Entrepreneurship Base. But the two biggest will eclipse these by a long way: the development of the Shenzhen Bay Super Headquarters Base, and the buildout of the Qianhaispecial economic zone. Unsurprisingly, fixed-asset investment in Nanshan rose 17.7% in the first half, to RMB57.092 billion yuan.
Longgang has its own major projects under way, too. These include the Xuegang Technology City, Apollo Future Industrial Cluster, Baolong Science and Technology City, International Low Carbon City, and Dayun New City. Most are focused on the all-important communications industry, led by Huawei, which will ramp up significantly in the coming years with the rollout of 5G. In fact, it is ramping already: in the first half, the district’s industrial output rose 9.5%.
Longgang, like Nanshan, has some major transport projects being built through it. With three subway projects and three major roads under construction, Longgang saw completed infrastructure investment of RMB14.634 billion yuan in the first half, up 54.8%.
An even greater transformation is happening in Baoan, around the airport, where fixed-asset investment of RMB58 billion yuan was up 32.5% in the first half. This marks 120 consecutive quarters of plus-25% growth in fixed-asset investment for the district. And it’s not only for aviation-related projects: the first exhibition of the newly opened International Convention and Exhibition Center will take place here next month.
Driving all of this is Shenzhen’s relentless determination to restructure its economy toward higher value-added industries. In Nanshan, industrial output surged 16.3% in the first half to RMB82.82 billion. In Longgang, electronic information manufacturing grew 12.5% to RMB116.78 billion yuan.