Tag Archives: economy

Shenzhen sets 6% annual growth target for 5 years

Shenzhen’s latest Five Year Plan envisages annual GDP growth of 6% from 2020-25. The plan, which was only formally released yesterday, sets a target of the city’s economy reaching 4 trillion yuan by 2025 – which is roughly 3.5 years from now. By that date, per-capita GDP is expected to have grown by a similar rate – 6% per year – which suggests the city government does not anticipate enlarging its official population (i.e., those with a Shenzhen hukou). The supply of public housing units, however, will be enlarged by 280,000 units.

(GBI comment: Shenzhen has been the country’s fastest-growing major city – in terms of population – together with Guangzhou for many years. It blew past its population growth predictions in the last Five-Year-Plan, as noted by the SCMP, but now apparently is doing away with incentives designed to attract talent to the city.)

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Guangdong GDP up 18%

Latest data from the provincial government show that Guangdong’s economic recovery continued to set a strong pace the first four months of the year, with GDP rising 18.6% YoY, driven by surging industrial output and foreign trade.

Growth in industry came in at 25.1%, with the construction sector sizzling at 29.5%, while total foreign trade was up 30.3%. Exports shot up by 36.2%.

Investment came in at 28% growth, and although the services sector lagged behind overall at 15.6% growth, there was a surge in accommodation and catering, which was up 43%. Retail sales clocked 27.8% growth.

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Shenzhen sees sharp slowdown in Q3

Something 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.

Private 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.

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Dongguan tops GBA growth charts

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.

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Biomeds, appliances keep Zhuhai growing

Zhuhai’s economy kept growing in August, despite a slowdown in its traditional industries, as the twin pillars of biomedicine and home appliances continued their recent surge.

From January to August, according to official data, industrial production (above designated size) was up 4% to RMB 71.713 billion, flat over the Jan-Jul period. The biomedical industry and the household electrical appliance industry maintained double-digit growth, at 18.3% and 16.0%, respectively. City leaders are likely thankful: the petrochemical industry and the power and energy industry, by contrast, barely grew, by 2.6% and 1.5%, respectively. A bright spot was high-tech enterprises, which rose 5.8%.

Fixed-asset investment is proving anemic. In January to August, at RMB120.474 billion, it was up just 2.2%, probably because the Hengqin Railway Line is nearing completion and there are few other major infrastructure projects with shovels in the ground. Industrial investment, however, shone: at RMB 17.653 billion, it was up 18.0%, a jump of 12 percentage points. 

Retail sales held up, though they weren’t stellar, at RMB 81.737 billion, up 5.7%. Sales related to tourism rose fastest, with accommodation up 7.7% and catering up 10.7%.

Hong Kong gets reform agenda rolling

American scholar Andrew Nathan has an interesting piece in Foreign Affairs summarizing what “insiders” say is Beijing’s approach to the crisis in Hong Kong. Though the presentation of this analysis fits too neatly into a US-centric worldview, it helps explain why the Hong Kong government is moving quickly to address the city’s dire shortage of housing: Because the central government believes the protests are being driven primarily by intolerable socio-economic conditions. Fix those, and the rest will take care of itself.

The logic has appeal. While Nathan’s sources are almost certainly wrong to suggest that the country’s senior leadership isn’t worried about addressing the political dimension of the protests, it makes sense to train attention and resources on fixing first what can be fixed easiest. Any capable government would be taking this approach.

This doesn’t necessarily mean that Beijing misunderstands where the protesters’ rage is coming from. The country’s leadership probably knows all too well that the crisis is not going to be fixed with bread alone. But it also likely understands that without a commitment to deep socio-economic reform, no other grievances can be addressed in a sustainable way. Fixing the land issue is about much more than bringing down the cost of living. It’s about changing the way people live.

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Guangzhou: upgrading continues

The provincial capital is continuing to restructure its economy amid a slowdown in foreign trade, which is having a knock-on effect on the manufacturing sector. Services are growing robustly, investment is surging, and retail sales are holding steady, latest official economic data shows.

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EU boosts Shenzhen exports, up 11%

The US-China trade war appears to be a diminishing concern for city leaders in Shenzhen, judging by the latest data from the city’s Customs department.

According to the Shenzhen Daily, in August, Shenzhen’s exports shot up 11.1% YoY, bringing its total for the first eight months to RMB 1.4 trillion, up 5.5%. Driving this was trade with the EU and countries along the Belt and Road Initiative. Although it is now standard practice in mainland media reports to not mention trade with the US, the data shows trade with the EU came in at RMB 28.93 billion in August, up a healthy 25.2% YoY. Countries along the Belt and Road Initiative were RMB 58.37 billion, up 9.2% YoY.

Export tax rebates appear to have helped, as exports of Christmas products and ceramic products increased by more than 80%, while household electrical appliances rose by more than 20%.

Private enterprises continued to take market share from SOEs. In August, the split went to 60/40, up 3.6 percentage points from July.

Food held up the import numbers. In August, agricultural products rose 17.1%. Fresh fruits and nuts, meat and chop, seawater products and other consumer products increased by more than 20%.