Yangtze River Provinces Are the Fastest Growing in China
Lin Xiaozhao
DATE:  Jul 31 2018
/ SOURCE:  Yicai
Yangtze River Provinces Are the Fastest Growing in China Yangtze River Provinces Are the Fastest Growing in China

(Yicai Global) July 31 -- Many of China's provincial governments have now published their major economic figures for the first six months, and most of the top performing regions are based along the middle and upper reaches of the Yangtze River.

Seven of the 29 provinces to submit data had an economic growth rate of more than 8 percent over the first six months, with six of them sitting along the middle and upper reaches of the Yangtze River, an area that has achieved robust development in recent years.

Guizhou, in the river's upper stretches, led provinces in the area with a growth rate of 10 percent, 3.2 points higher than the national average and the only region to mark a double-digit expansion. Its performance ranked it among the fastest-growing three provinces for the 30th straight quarter.

There are a number of factors behind Guizhou's fast-track economy, said Gou Yiyong, a researcher at the Guizhou Academy of Social Sciences. The local government has capitalized on the chance to take on industries transferred from the eastern coastal areas, actively improved transport infrastructure, birthed its own new economy companies and enjoyed success from local specialties, like tobacco, liquor and tea.

The southwestern province has also sought to attract unicorns from at home and abroad to set up shop in the remote region. Apple has built its China data center there, and domestic new economy giants like Alibaba, Tencent and Huawei have made investments to set up big data operation centers in the province.

Neighboring Yunnan was another top performer with its economy growing 9.2 percent in the first half. Yunnan and Guizhou both sit on plateaus and were once some of the poorest performing provinces, but have managed to turn that around with improved transport infrastructure playing a major role.

Other Power Players

Sichuan, Jiangxi and Anhui, all also based along the Yangtze, racked up growth of more than 8 percent while Hunan and Hubei expanded by 7.8 percent, ranking all five in the nationwide top 10.

Regions in the middle and upper reaches of the Yangtze enjoy abundant water resources, a moderate climate and a rich labor force, so they have been able to work on a lot of industries shifting from the Pearl River Delta and Yangtze River Delta, Ding Changfa, an associate professor of economics at Xiamen University, told Yicai Global. As a result, their economies are growing quicker than pretty much anywhere else in the country, he added.

In the east of the country, southern provinces performed much better than their peers further up the coast. Fujian and Zhejiang retained relatively high growth rates while Shandong and Tianjin saw a significant slowdown.

Fujian grew the fastest nationwide, thanks mostly to new high-speed railways and an improved network of expressways. While Zhejiang, China's new economy hub, shone with its tech giants.

Guangdong Strides Ahead

Guangdong, which has the biggest provincial gross domestic product in China, widened the gap over Jiangsu, the country's second-largest provincial economy. Over the first six months, the difference between the two was nearly CNY148 billion (USD21.7 billion), up CNY34 billion from the same period last year. Guangdong expects to expand the gap to CNY400 billion this year if the pair's growth rates remain unchanged.

Guangdong's ongoing top spot is mainly attributed to accelerated innovation and its economic structure, said Peng Peng, vice president of the Guangdong System Reform Research Society.

On the other hand, Shandong, a northern province once comparable to Guangdong and Jiangsu, fell further away from its southern rivals. Its provincial GDP was just under CNY4 trillion (USD585 billion) in the first half, compared with CNY4.6 trillion in Guangdong and CNY4.5 trillion in Jiangsu. Shandong's economy is heavily based on traditional industries like energy and heavy chemicals, and has been slow to adjust to the rise of the digital economy and high-tech sectors.

This proved a trend across the country. Many northern provinces -- whose strengths lie in energy and heavy chemicals -- filled up the lower spots on the rankings. Jilin, Tianjin and Inner Mongolia all logged less than 5 percent, while Gansu, Heilongjiang and Liaoning all came in below 6 percent.

Others have been more fortunate. Shanxi province, best known for its coal industry, racked up a GDP of around CNY750 billion in the first half after growing 6.8 percent to beat expectations. Shanxi has retained growth of more than 6 percent since last year and continued to expand faster.

The province derived most of its growth from non-coal industries, whose value added was up 10.5 percent, compared to 0.8 percent within the coal industry. During the first five months, profit at non-coal companies more than doubled while revenue from primary business increased 18.8 percent, 9.3 points more than at coal firms.

Editor: James Boynton

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Keywords:   Governments,Yangtze River