Shenzhen’s economy pushed back closer to its pre-pandemic growth in the first half of this year, despite a blip in June caused by a Covid-19 outbreak in Guangdong. With GDP rising 9.7% over the first half of 2020, that equated to a 4.8% rise on two-year comparison with the same period in 2019. It’s not yet the 6% mark that Shenzhen had been comfortable with pre-pandemic, but the bright spot appears to be the development of new strategic industries and the services sector.
According to the Shenzhen Municipal Bureau of Statistics, 20 strategic emerging industrial clusters grew 13% to generate output of 563.086 billion yuan in the first half, accounting for 39.3% of the city’s GDP. The star was high-end equipment manufacturing, up 44.1%, while the marine economy rose 30.9%. A broad category called “digital and fashion” rose 23.9%, while new materials was up 22.5%. Good news on the green front was low-carbon industries jumped by 19.9%.
Industrial robots had a good boost, up 79.5%, an average increase of 61.5% in two years; the output of new energy vehicles and charging piles increased by 3.28 times and 1.21 times, respectively, with an average increase of 30.4% and 66.8% in two years; the output of 3D printing equipment increased by 32.4%, an average increase of 1.38 times in the two years.
In services, from January to May, the operating income of the city’s for-profit service industry increased by 26.1%, an average increase of 15.1% in the two years, which was 1 percentage point higher than the growth rate of the same period in 2019.
While Guangdong’s leading economic indicators mostly slowed in May, along with the rest of the country’s, investment into “new infrastructure” continued to grow strongly, official data shows. Overall investment in fixed assets slowed to a year-on-year growth rate of 22% in the January-May period, down from 28% in January-April, and infrastructure investment in the province grew just 10.3% year-on-year. But among that, investment in Internet and related services rose 218.5% year-on-year, giving a two-year average growth rate of 62.9%. No total amount was provided.
Although industrial production continued to hum along, with growth among larger enterprises coming in up 21% year-on-year, this too was slightly down, from 23.9% growth in January-April. Consumption continued its relatively sluggish post-pandemic recovery. From January to May, retail sales hit 1.80 trillion yuan, up 23.9% year-on-year, but just 2.3% on a two-year basis. Exports also continued to slow, growing by 30% year-on-year, down from 36% in the January-April period.
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.)
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.
Guangzhou’s fiercely competitive districts are one reason why the provincial capital was able to remain so resilient in a tough external environment last year. Every year the city publishes its rankings of them, based on GDP, both in absolute terms and growth. In 2019, the southernmost district, Nansha, came out tops in growth but still had some distance to catch Tianhe, according to official data.
Shenzhen’s GDP in 2019 officially came in at 2.69 trillion yuan, a rise of 6.7% over 2018, the city’s statistics bureau announced yesterday, according to local media. This was lower than the preliminary estimate released by the government two weeks ago during its annual Work Report, when it said 7% was expected.
Zhuhai got a boost last year from the final stages of construction of the Hengqin Railway Station, which is due to open soon, but its economy has also been doing surprisingly well thanks to growth in tech manufacturing and services, latest preliminary data shows.
The city’s leadership announced this week GDP growth of 6.8%, putting Zhuhai tied with Foshan and behind only Dongguan and Shenzhen (+7% each) among the GBA’s fastest-growing cities.
Shenzhen’s mayor, Chen Rugui, sees no cause for concern in the city’s recent economic slowdown, pointing out that quality is more important than quantity. Industrial upgrading is causing some challenges as traditional industries either become more valuable through infusions of technology, or move out of the city, yet the mayor is upbeat about the future.
Guangdong Governor Ma Xingrui has declared the province broke through the 10 trillion yuan GDP mark in 2019, equating to growth of roughly 6.3%. However, he clearly sees challenges in the year ahead, as growth is forecast to subside further to 6.0% in 2020.
We wrote last week about Foshan’s mayor being so excited at the story he had to tell regarding 2019 that he couldn’t wait for the official release of GDP data to announce Foshan had joined the trillion-yuan club. We didn’t know then just how excited he was, because he didn’t give a detailed figure. Over the weekend, he did: 1.08 trillion yuan, to be precise. That represents a sharp 8.6% growth in nominal GDP in 2019, which very nearly pushed Foshan past Dongguan for the title of fastest-growing GBA city in 2019.
Nearly, but not quite. Dongguan is estimated to have grown 7.0% in real terms, slightly faster than Foshan’s 6.8% real growth rate. So did Shenzhen – 7% – although neither city has released full details of their GDP data like Foshan’s mayor did.