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Economy

West leads others in growth stakes

1
2015-07-29 13:57China Daily Editor: Si Huan

A handful western and central provinces led China's economic uptick in the second quarter of the year, while the "rust belt" region still lagged in economic expansion.

All the 31 regional governments in the Chinese mainland have released their GDP data for the first six months of 2015. Among them, 27 regions posted faster growth in the first half compared with the first quarter while two provinces (Anhui and Shandong) saw flat growth over the first quarter, China Daily's compilation of each region's statistics bureau data showed.

The growth "star" was the southwestern metropolis Chongqing, which led the nation with an 11 percent growth, followed by Guizhou province with 10.7 percent growth. Central provinces also performed strongly, taking up 4 of the top 10 fastest-growing regions nationwide.

Not surprisingly, the three northeastern provinces, or the old industrial base referred to as the "rust belt", and Shanxi province, the latest regions to release their data, took up the bottom positions, as they did in the first quarter.

Liaoning province, a steel and equipment manufacturing hub, reported the slowest GDP growth among 31 regions, though the 2.6 percent year-on-year growth in the first half was better than the 1.9 percent growth in the first quarter.

Fixed-asset investment in Liaoning, a pillar of the economy, fell 13.3 percent from a year earlier, an improvement over the whopping 18.5 percent contraction in the first quarter.

Coal-reliant Shanxi province ranked the second-slowest, with a growth rate of just 2.7 percent, compared with 2.5 percent in the first quarter. Another coal-rich region, Inner Mongolia autonomous region, was also among the few regions that grew below the national GDP of 7 percent.

Another two northeastern provinces, Heilongjiang and Jilin, also were among the laggards. President Xi Jinping's visit to the heartland of Northeast China earlier this month underscored the immense downward pressure there.

In contrast, major economic powerhouses along the eastern seaboard showed resilience during the downturn.

Guangdong, an economic powerhouse, grew by 7.7 percent, up from 7.2 percent in the first quarter, while Jiangsu province grew by 8.5 percent, marginally faster than the 8.4 percent in the first quarter. Zhejiang grew by 8.3 percent, up from 8.2 percent.

Improvement in external demand might have played a role in the growth of these provinces, as many of them are traditionally export-oriented. China's exports grew by 0.9 percent in the first half, better than the 1.2 percent decline in the first half of 2014.

But analysts said internal restructuring of the economy, particularly robust consumption and the services sector, contributed a larger role.

"If you look at the industrial output growth, an indicator of the secondary industry, more than half of the regions saw slow or flat growth over the first quarter, rather than acceleration. The acceleration of the broader economy could only be explained by the larger role of the services sector," said Chen Yao, secretary-general of the Chinese Association for Regional Economics.

He said the comparison between the resources-reliant provinces and eastern regions underpinned the urgency of the growth model transition.

A greater government role would also help.

Chongqing, an export-oriented hinterland city, was hit hard by the sluggish demand from Europe and the United States. But China International Capital Corp said that the municipality was able to navigate the downturn and become a growth champion thanks to the regional government's proactive role.

Chongqing has been relentless in attracting industries from the more developed, and more expensive eastern regions, not only in its established industrial cluster of electronics and automobiles, but also in nurturing strategic emerging industries. The city now produces one-third of the world's laptops.

"The case of Chongqing illustrates regional governments in China can play a critical role in local economic growth and industrial upgrading," CICC said.

  

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