All regions report low GDP growth

Traditional industrial areas struggle amid economic restructuring

All China's 31 provincial-level governments reported lower than expected local GDP growth in the first half of 2014, with regions reliant on heavy industry suffering the biggest blow amid economic restructuring and a cut to industrial overcapacity.

As of Thursday, China's 31 provinces, municipalities and autonomous regions had released local GDP growth rates for the first six months of the year. Although 22 of them had GDP growth higher than 7.4 percent, the nation's overall half-year growth rate, in only six was economic performance above 10 percent compared with the same period last year when up to 15 areas reported growth higher than 10 percent.

With mainly inland areas in the west leading the growth chart, traditional industrial provinces such as Shanxi and Hebei rank near the bottom, with Northeast China's Heilongjiang witnessing the slowest growth, at 4.8 percent, far short of its annual target of 8.5 percent.

It is not surprising to see that local governments failed to meet these over-optimistic targets, Tian Yun, editor-in-chief of economic research website macrochina.com.cn, told the Global Times. The 2014 targets, when set by local governments, were already adjusted to be lower than last year considering downturn pressures.

Yet slowing provincial growth is normal amid China's efforts to restructure its economy and attach more importance to the quality of economic development rather than speed, Chen Hufei, a researcher with the Bank of Communications, told the Global Times Thursday.

Most parts of eastern China saw a GDP growth rate of around 7 percent, with 7.1 percent for Shanghai. Beijing reported 7.2 percent growth.

Considering the large base data of East China, a growth rate around 7 percent is quite satisfactory, according to Tian.

East China is going through industrial restructuring and upgrading while manufacturing industries are moving from the eastern and coastal regions to central and western areas, driving up economic growth there, Chen said.

Several regions in Central and West China led the growth rankings. In Southwest China's Chongqing Municipality, the economic growth rate is 10.9 percent, second only to the Tibet Autonomous Region.

By making electronics and automobile manufacturing key industries, Chongqing is an example of successful industrial restructuring, Tian said, noting the two industries have great market potential.

Meanwhile, Chongqing's house prices rank low among China's major cities, which ensures local residents have higher consumption power for these two core industries, he noted.

Heilongjiang's GDP of 4.8 percent was much lower than its 8.5 percent whole year growth target, and its neighbor, Jilin Province, only saw 6.8 percent growth.

Heilongjiang provincial government said the province is facing huge challenges, especially reduction in output at Daqing Oilfield, local newspaper Heilongjiang Daily reported Tuesday.

As a traditional industrial heartland, Northeast China has advantages but it lacks the type of breakthrough reform Chongqing enacted, while it also faces a serious talent outflow, Tian said.

At a Cabinet meeting on July 31, Chinese Premier Li Keqiang said local governments in Northeast China must deepen reform, expand opening-up and be more innovative.

China's National Development and Reform Commission also said Monday that in the second half of this year, it will take more targeted measures to reverse the economic downturn in Northeast China.

Beijing's neighboring Hebei Province, a traditional iron and steel production base, grew only 5.8 percent, posting next-to-last figures, 2.2 percentage points off its yearly target. North China's Shanxi Province, a major coal production base, grew only 6.1 percent in the first half of 2014.

Both provinces suffered from overcapacity in traditional industries, with experts saying that they are affected by government efforts to cut energy consumption and high polluting manufacturing.

The GDP combination of the total 31 provinces reached 30.28 trillion yuan ($4.9 trillion), 12.56 percent higher than national GDP, according to the National Bureau of Statistics.