Tag Archives: economy

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%.

Shenzhen to build yacht hub in east

The Greater Bay Area is about to get another hub for yachts. Shenzhen is expected to start construction of its Nan’ao Wharf Project, at the Dapeng peninsula to the city’s east, by next year. It will be completed by 2022. As Shenzhen Economic Daily reports, the hub will be within a 40-minute sail to Hong Kong and Macau, opening up new routes for international leisure travel in the GBA.

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HK exports plunge again

Economic news today is not all about resilience in the GBA. Hong Kong’s exports are way down in July, despite those from its GBA counterparts being mostly up. We don’t know why; we need someone from the TDC to explain it. Anyway, here is the SCMP’s article on it.

The SCMP also has some interesting analysis today on economic conditions in Hong Kong, China and the US that are worth reading. Tom Holland’s column today is important for anyone who questions the dollar peg; Andy Xie, meanwhile, takes a hard look at the US, where he sees President Trump deciding policy based on what is good for the stock market, and little else; and David Brown argues that what the world needs more of is less neoliberalism. Which is  what China has been focused on over the past decade, we would argue, and is clearly prepared to continue doing for the foreseeable future.