China's central and western provinces reported stronger economic growth than their eastern peers during the first three quarters, indicating easing measures may have began to take effect.
At least 27 provincial-level regions in China unveiled their gross domestic product (GDP) growth for the third quarter of this year on Thursday.A total of 17 reported faster GDP growth in the first three quarters than in the first half year, six of them stayed flat, and four regions slowed.
Many attributed stronger growth to a recovery in the property sector, resilient consumption, especially online, and continued growth of emerging industries. The landlocked western and central provinces have shown stronger growth than their more developed coastal counterparts, with southwestern Chongqing Municipality ranking at the top with 11 percent GDP growth in the first three quarters. Meanwhile, Beijing, Shanghai and eastern Zhejiang province reported slower growth in the first three quarters than the first half, amid what local officials say is an economic restructuring toward service and tech-intensive industries. Quarterly growth of the Chinese economy moderated to a six year low of 6.9 percent in the third quarter this year.
RISE OF THE WEST
Economic powerhouse Chongqing has retained the top spot for growth among all Chinese provincial-level regions for seven straight months. Chongqing was followed by Guizhou Province, also located in the southwest, with 10.8 percent year-on-year growth during the same period. Consumption-driven growth has been a major contributing factor for their economies, with retail sales in Chongqing and Guizhou growing by 12.3 and 11.5 percent in the first three quarters respectively, above the national average of 10.5 percent.
Zhang Fumin, vice director of the Chongqing Statistics Bureau, also attributed Chongqing's outstanding economic growth to the robust development of manufacturing and the high-tech industry. The city's manufacturing sector maintained relatively rapid growth, with auto and IT, its two backbone industries, growing 13.4 and 24.8 percent respectively for the first three quarters.
Zhang said the high-tech sector has become a new growth engine, offsetting the impact of slowing traditional industries. Guizhou's restructuring has proven a healthy source of growth for the province. The economy is reducing its reliance on coal mining and nurturing new areas such as tourism and a more competitive agriculture sector, according to Hu Xiaodeng, professor with Guizhou Academy of Social Sciences, a government think tank. At the same time, the province has seen a boom in the private economy thanks to the local government's effort in attracting investment, Hu added.
BEJING, SHANGHAI CHANGE GEARS
Both Beijing and Shanghai reported slower GDP growth for the first three quarters, but local officials say the two cities are instead pursuing higher-quality growth through economic restructuring. The Chinese capital reported a 6.7 percent GDP growth in the first three quarters, down 0.3 percentage points from the first half year.
Xin Zhihong, an official with Beijing branch of National Bureau of Statistics, said part of the slowdown is caused by Beijing's ongoing effort to relocate non-essential and polluting industries outside of the city. The city also closed down more than 300 polluting companies during the first nine months of this year, according to officials.
Shanghai's economy expanded 6.8 percent in the first three quarters, 0.2 percentage points lower than the first half year. Wang Jian, head of Shanghai Bureau of Statistics, said although the city's industrial added value dropped faster than expected, the municipality's economic structure has been optimized further. In the first three quarters, the share of tertiary industries rose to 67.6 percent of the city's total, up 0.5 percentage points than in the first half year.
NORTHEAST AT BOTTOM
Among the three provinces along China's northeast rustbelt, only Jilin reported its growth, coming in at 6.3 percent in the first three quarters, the lowest among all provinces. Once China's industrial base, the northeast region has been hit hard by lingering downward pressure. The three provinces were among the bottom of the list for GDP growth in the first half year, with Liaoning ranking last at 2.6 percent. The rustbelt has been a traditional hub for a number of pollution-spewing industries, producing everything from steel, petroleum to coal. As demand for such commodities remains weak both at home and abroad, the region is now saddled with overcapacity. Meanwhile, private enterprises that boomed elsewhere in China by leading with innovation and catering to China's rising consumer class have yet to take root in the region.
Sun Zhiming, researcher with Jilin Academy of Social Sciences, said economic restructuring will be the way out for the region and more policies to boost the local economy can be expected in the future. During an inspection tour to Jilin in July, Chinese President Xi Jinping called for further revitalization of the northeast region. Earlier this month, official with National Development and Reform Commission Yang Yinkai said, the strategy to revitalize the northeast will be part of China's 13th Five-Year Plan, an economic blueprint for the 2016-2020 period.
BOTTOM OUT IN Q4
Experts attribute the rebound to a set of easing measures launched by the country this year, and are expecting steady growth in the fourth quarter as government policies continue to take effect.
China's central bank has cut the interest rate five times and freed more cash that banks need to hold as reserves to stimulate the economy. Authorities have also reversed previous restrictions for home purchases, including lowering down payments, to support the sagging property market. China has also sought to provide a backstop for growth by launching more infrastructure projects. It has injected funding for such projects through policy banks.
Niu Bokun, researcher with Hua Chuang Securities company, forecasts China's economic growth at 7 percent in the last quarter. Rising unemployment in September may trigger further monetary easing measures. Meanwhile, a series of infrastructure construction projects approved recently will also help stabilize the economy.
Li Daokui, an economist at Tsinghua University, said the Chinese economy is likely to bottom out and pick up at the end of this year or in the first half of next year with the further recovery of the property market, the reform of state-owned enterprises and the continuous effect of government policies for stabilizing growth.
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