Sadly, in the financial markets, there is little room for sentiment. While Hong Kong struggles to get its airport back into smooth operation after days of chaos caused by protesters, investors have been pumping up the shares of regional competitors likely to gain from an overflow of demand.Continue reading HK airport woes focus attention on regional rivals
Guangzhou’s first-half performance this year was remarkable indeed, as the trillion-yuan economy was up 7.1%, nearly a percentage point above the national average. However, within the city were two astonishing growth stories, in the Nansha and Tianhe districts, which grew at a sizzling 9.4% each.Continue reading Tianhe, Nansha lead Guangzhou’s growth
Zhuhai’s economy grew 7.0% in the first half. Looking closer at the details, it would appear that a construction boom has helped, and it would not take a genius to guess that this means Hengqin Island’s massive buildout is getting up to speed.
According to the Zhuhai Statistic Bureau, the city’s construction industry was worth RMB38.807 billion, up 32.4% year on year. That is out of a total GDP of RMB148 billion.Continue reading Zhuhai boosted by construction
Shenzhen’s financial industry had a strong first half, with growth across every major sector posting double-digit gains.
The only area that didn’t see strong growth was the one that the government didn’t want to see grow strongly: its own. The city’s tax revenue from the financial industry rose just 2% to reach RMB89.4 billion, thanks to a series of tax reforms that reduced tax bills across the city. Still, finance accounted for 24.8% of the city’s total tax revenues and is still the leading contributor to the city’s coffers.Continue reading Shenzhen’s financial industry surges
Shenzhen’s GDP in the first half grew 7.4% YoY to RMB1.213 trillion, driven by three main trends:
1) A robust services industry, especially in the internet sector;
2) Resilient consumers, especially online, with total retail sales up by 8.3%; and
3) A dollop of government cash put into infrastructure.
The official data is in: Shenzhen grew the fastest (in real terms) in the first half of the year among the main cities of Guangdong. Despite being a trading-reliant economy, its GDP swelled 7.4%, after adjusting for inflation.
Chinese media were awash with glowing reports yesterday trumpeting a milestone in the Fortune 500 global rankings. For the first time, there are more Chinese companies on the list than American: 129 to 121. What we find most interesting on the list is the presence of 20 companies from the Greater Bay Area.
Below is a snapshot of how Chinese companies grew on the Fortune 500 over the past 20 years.Continue reading 20 GBA firms in Fortune 500
Zhuhai’s industrial output rose 4.2% in the first five months, with hi-tech enterprises leading the way, up 8.3% YoY. According to Zhuhai’s Statistics Bureau, between January and May, Zhuhai’s industrial output hit RMB42.199 billion, with around one-fourth of this coming from the city’s pillar industry of household electrical appliances, which grew strongly, up 23.3% YoY at more than RMB8 billion. Gree Electric boss Dong Mingzhu must be smiling.
Biomedical was another fast-growing sector, pulling in RMB2.237 billion, up 27.3% YoY. Electrical machinery and equipment manufacturing and pharmaceutical manufacturing both also grew by more than 10.0%.
Dongguan’s private sector has become the backbone of the economy, now accounting for more than 50% of GDP, 60% of fixed-asset investment, and 70% of tax revenue.
According to the local government, private industries have seen double-digit growth for the 12 months until March, when a slowdown induced by the drop in external trade kicked in. At the end of Q1, however, the number of newly registered private firms was continuing to grow, up 12.5% YoY to 1.14 million.
They are being attracted by incentives, of course. Data shows that Dongguan cut RMB50 billion of the tax burden for private enterprises in 2018. The local government is also investing heavily in infrastructure buildout under the GBA masterplan.
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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%.