Man­u­fac­tur­ing hubs show growth amid up­grades

More in­vest­ment goes to real econ­omy

Global Times US Edition - - BIZUPDATE - By Chen Qingqing

The in­dus­trial out­put of the Yangtze River Delta re­gion, the most ad­vanced man­u­fac­tur­ing hub in China, showed ac­cel­er­ated re­cov­ery in the first half of 2017, and more in­vest­ment has been rechan­neled to the real econ­omy.

Shang­hai, East China’s Jiangsu Prov­ince and Zhe­jiang Prov­ince all saw their man­u­fac­tur­ing sec­tors grow faster, the Xin­hua News Agency re­ported on Sun­day.

For ex­am­ple, the to­tal out­put of real es­tate in Shang­hai de­clined 17.5 per­cent year-on-year, which showed that the lo­cal econ­omy is less de­pen­dent on the hous­ing mar­ket, Tang Hui­hao, deputy bu­reau chief of the Shang­hai Mu­nic­i­pal Statis­tics Bu­reau, was quoted as say­ing. Shang­hai’s in­dus­trial out­put in­creased 7.3 per­cent year-onyear in the first six months, a sign of strong re­cov­ery in the sec­tor.

Mean­while, Jiangsu record- ed its in­dus­trial out­put growth at 7.4 per­cent year-on-year, while Zhe­jiang saw a 7.7 per­cent year-on-year surge, driven by up­graded pro­duc­tion lines that are equipped with au­to­ma­tion, Xin­hua noted.

“The re­cov­ery in man­u­fac­tur­ing was mainly thanks to stronger-than-an­tic­i­pated ex­ports in re­cent months,” Xia Dan, an ex­pert at the Bank of Com­mu­ni­ca­tions, told the Global Times on Sun­day.

In the first half of 2017, China’s to­tal ex­ports grew 15 per­cent year-on-year, to 7.21 tril­lion yuan ($1.1 tril­lion), showed data from the Gen­eral Ad­min­is­tra­tion of Cus­toms re­leased July 13.

In the past few years, the slug­gish trade out­look has driven more funds to the real es­tate sec­tor, which was con­sid­ered much more prof­itable than tra­di­tional in­dus­tries, ac­cord­ing to Xia.

“How­ever, a more se­vere crack­down on the hous­ing bub­ble since the be­gin­ning of this year has also lim­ited fi- nanc­ing tools for some com­pa­nies,” she said.

In the Yangtze River Delta re­gion, many com­pa­nies are ex­port-driven, ex­pos­ing them to a slug­gish global mar­ket, Yan Yue­jin, re­search di­rec­tor at E-house China R&D In­sti­tute, told the Global Times on Sun­day.

“When some com­pa­nies felt fi­nanc­ing pres­sures do­ing trade, they would find more prof­itable busi­nesses in­clud­ing prop­erty projects,” he said, not­ing that the re­cent curb on funds en­ter­ing the real es­tate sec­tor will help sta­bi­lize the mar­ket.

The im­bal­ance be­tween the real es­tate sec­tor and real econ­omy is one ma­jor is­sue that China faces to­day, He Lifeng, di­rec­tor of the Na­tional De­vel­op­ment and Re­form Com­mis­sion, was quoted as say­ing at the China De­vel­op­ment Fo­rum in March.

Mea­sures to tackle the hous­ing bub­ble in­cluded con­trol­ling loans flow­ing into the sec­tor, he noted.

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