ECONOMY

AI and Exports Drive China’s Widening Regional Economic Divide

Published: Jul. 29, 2026 2:02 p.m. GMT+8

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Workers produce automotive air conditioning compressors in Huzhou, Zhejiang province, on July 24. Photo: VCG

A stark economic divide is sweeping across China, with export-driven coastal powerhouses pulling ahead of provinces hobbled by their reliance on traditional industries.

The divergence unfolds against the backdrop of a broader economic cooling. Year-on-year growth in the first half slowed from the first quarter across nearly all Chinese mainland provinces.

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