Chart of the Day: The Mixed Bag of China’s Local Economies

China’s provincial-level economies were a patchwork of promising growth, sluggish performance, and contraction in the first three quarters, as outbreaks of Covid-19 pummeled some regions, while resource-rich areas benefited from rising prices of raw materials.

All 31 provincial-level regions on the Chinese mainland have released their GDP data for January through September. Thirteen lagged the national year-on-year growth rate of 3% for the period, including three recording contractions.

The southern island province of Hainan, Shanghai municipality and the northeastern province of Jilin saw their economies shrink 0.5%, 1.4% and 1.6% year-on-year, respectively. Each has suffered severe Covid containment measures at some point this year, Hainan most recently.

The popular tourist destination’s GDP reversed from 1.6% growth in the first six months. The tropical island imposed a large-scale lockdown in August to contain a Covid outbreak, stranding tens of thousands of visitors.

That outbreak has had a wide and long-lasting impact on Hainan’s economy, which relies heavily on services industries such as tourism and retail, said Cheng Shaolin, chief statistician of the provincial statistical bureau, in a statement last month. The number of tourists who stayed overnight in Hainan dropped 23% year-on-year in the first three quarters, he said.

Shanghai and Jilin suffered outbreaks mainly in the first half of the year. Their GDPs appeared to be on the mend, with third-quarter data improving compared to the half-year.

In the first three quarters, eight regions recorded slower year-on-year growth than their half-year GDP data, partly due to Covid outbreaks and a power crunch that followed record heat waves.

The GDP of the Tibet autonomous region, which tackled a virus outbreak in the third quarter, grew by just 0.2% year-on-year in the nine months, 4.6 percentage points off growth for the first half. Sichuan province and the municipality of Chongqing saw GDP growth slow as the heat waves curtailed key hydropower supply in July and August, disrupting industrial production.

Extended growth

Some resource-rich regions, such as Shanxi and Shaanxi provinces, extended strong growth.

Shanxi’s GDP grew 5.3% year-on-year in the first three quarters. The value-added industrial production of the northern region grew 9.7% — 5.8 percentage points higher than the national growth rate.

In neighboring Shaanxi, value-added industrial production in the energy sector grew 10% year-on-year in the first three quarters, while the output of raw coal grew 7.1%, 0.8 percentage points faster than in the first half. Coal companies were supplying more high-quality coal to ensure national energy security, according to an official statement.

Some regions, such as Fujian, boosted GDP growth on expansive infrastructure investment fueled by government stimulus. The eastern province’s GDP grew 5.2% year-on-year in the first three quarters, 0.6 percentage points faster than half-year growth. Infrastructure investment during the period increased 14.4%, and contributed 37.2% to its total investment growth, compared with the 8.8% contribution in the same period last year, Xue Huizhen, a local statistics official, said in a statement last month.

Contact reporter Zhang Yukun (yukunzhang@caixin.com) and editor Jonathan Breen (jonathanbreen@caixin.com)

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