The 31 Provincial level regions of China recorded steady economic performances in the first half of 2019, despite downward pressure and the impact of the US-China Trade War.
Ongoing opening-up and reform measures improved the business climate and corporate sentiment, experts said. As more local governments move to boost growth, the overall economy is expected to be stable in the second half, said the experts.
The fast growth shows that opening-up and the Belt & Road Initiative have injected new momentum into western and central regions, according to experts.
South China’s Guangdong Province led the economic performances of Chinese provincial regions in the first half of 2019 with a total GDP of more than 5 trillion yuan ($710 billion), followed by East China’s Jiangsu and Shandong Provinces, each of which reported GDP of more than 4 trillion yuan, according to the National Bureau of Statistics (NBS).
This was the first time that Guangdong’s GDP exceeded 5 trillion yuan in the first half of the year, and its full-year GDP is expected to exceed 10 trillion yuan, another first, as growth momentum persists.
In terms of growth rates, of the 16 provincial regions that surpassed the country’s 6.3 percent average growth rate, Guangdong and Jiangsu have borne the brunt of the escalating trade war’s impacts on manufacturing and exports. Both, however, reported growth rates of 6.5 percent.
The steady performances and momentum of developed provinces like Guangdong, Jiangsu and Zhejiang, show the power of industry upgrading, tax and fee cuts, and ongoing opening-up, Tian Yun, Vice Director of the Beijing Economic Operation Association said.
“A closer look at these provinces’ trade data shows that the exports of private companies remained steady,” Tian said.
Although the first-half GDP of East China’s Shandong Province was more than 4 trillion yuan, the province only reported 5.4 percent growth, seeing an expanding gap with Guangdong and Jiangsu.
After making inspection and learning trips to southern provinces, local officials in Shandong pledged in July to improve services and reduce intervention in economic activities to improve local business environment, according to articles posted on the official website of Shandong provincial government.
“If Shandong can turn its sense of crisis into concrete measures and implementation, the province is expected to see a positive outcome in coming years,” Tian said.
The total GDP ranking of the regions remained similar to last year, but the ranking of GDP growth rates have seen some changes. Southwest China’s Yunnan Province led all provinces with 9.2 percent growth in the first half of the year, while Guizhou Province and the Tibet Autonomous Region shared second place with growth rates of 9 percent.
At the bottom of the list, Northeast China’s Jilin and Heilongjiang provinces and North China’s Tianjin Municipality held the bottom three places. Jilin reported a growth rate of 2 percent, Heilongjiang reported 4.3 percent and Tianjin reported 4.6 percent.
The steady performances of provinces bearing the brunt of external risks and the significant growth speeds of some western regions both show that there is much room for local governments to stabilise and boost economic growth, said Zheng Chaoyu, professor of macroeconomic analysis and monetary policy at the School of Economics, Renmin University of China.
Local governments need positive measures and optimistic prospects. The pressure of a broader downturn and outside risks warrant caution but should not be overrated, Zheng said.