China's provin­cial GDP data points to re­cov­ery

Viet Nam News - - Asia Business -

BEI­JING -— China ’ s re­gional economies en­joyed a re­vival in growth in the sec­ond quar­ter, data from provin­cial gov­ern­ments showed, chim­ing with ear­lier fig­ures that sug­gest a burst of govern­ment stim­u­lus mea­sures is re-in­vig­o­rat­ing ac­tiv­ity.

Of the 30 re­gions and prov­inces that re­leased their lo­cal gross do­mes­tic prod­uct (GDP) data, 23 re­ported first-half eco­nomic growth ac­cel­er­ated from the first quar­ter.

About three-quar­ters posted growth that was higher than the na­tional av­er­age of 7.4 per cent in the first six months.

Growth also di­verged sharply be­tween eastern and western China. The coastal and north­east­ern re­gions fared the worst, while ac­tiv­ity was most buoy­ant in the cen­tral and western ar­eas, where dou­ble-digit growth rates were con­cen­trated.

An­a­lysts said this sug­gested China ’ s bid to re­bal­ance its econ­omy is pay­ing off.

From re­defin­ing job tar­gets to shift­ing in­vest­ment to in­land ar­eas and cut­ting ob­so­lete ca­pac­ity in en­ergy- guz­zling sec­tors in the north, China wants to over­haul the world’s sec­ond-largest econ­omy and en­cour­age more sus­tain­able and higher-qual­ity growth.

“ The growth gap is an ex­pected re­sult of Bei­jing’s ef­forts to re­bal­ance re­gional economies and let the fruits of growth be more evenly shared by the poorer in­land re­gions,” said Nie Wen, an an­a­lyst at Hwabao Trust in Shang­hai.

In He­bei – China’s top steel pro­ducer – for in­stance, GDP growth stayed slug­gish in the first six months, even though ac­tiv­ity picked up slightly to 5.8 per cent com­pared with 4.2 per cent in the first quar­ter.

He­bei’'s drowsy per­for­mance is in part due to its ef­forts re­make it­self. He­bei wants to slash to­tal steel ca­pac­ity by 60 mil­lion tonnes by 2017 and to shut more out­dated steel mills this year to cut air pol­lu­tion in north­ern China.

Sim­i­larly in the north­east­ern Hei­longjiang province, the only province that has not re­leased its GDP data, a lo­cal statis­ti­cian who de­clined to be iden­ti­fied said firsthalf GDP growth was likely to be the low­est in China at un­der 5 per cent.

A hub for China’s heavy in­dus­try and a ma­jor coal pro­ducer, Hei­longjiang was also the weak- est per­former in the first quar­ter, when its GDP growth fell to 4.1 per cent.

In con­trast, economies in the west such as Chongqing, Guizhou and Qing­hai all posted dou­bledigit GDP growth be­tween Jan­uary and June, helped by pol­icy sup­port. Just last month, Pre­mier Li Ke­qiang had vowed to sink more cash into the in­dus­tries and in­fra­struc­ture in western China.

“ Most of Bei­jing ’ s re­cent piece­meal pro-growth mea­sures have tar­geted the cen­tral and western prov­inces,” Nie said. —

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