Chongqing/Guangzhou

The research bureau Trigger Trend analyses data on GDP per city in the first half of 2020. Out of the twenty largest cities (except Wuhan and Qingdao), eleven have recorded an increase, including Shenzhen, Chongqing, Suzhou, and Chengdu. In contrast, cities such as Beijing, Shanghai, and Guangzhou have a decrease. Wuhan, with the impact of COVID, recorded the biggest fall, estimated at 20%. Chongqing is ahead of Guangzhou, but we have to look at the numbers in detail.

Ranking of Chinese cities by GDP in the first half of 2020:

Chongqing in front of Canton

In the first quarter, Canton had a higher GDP of 24 billion yuan. In the end, Chongqing enjoyed an advance of 24.154 billion over the first six months, with 1120.983 billion GDP and a slight increase of 0.8% against 1096.829 billion and a decline of 2.7%.

Export-textile

The export sector is suffering much from the health crisis, especially the textile branch, which could not fully benefit from the high season of March-May. The Guangzhou-Foshan region has been hit hard by the effects of the pandemic both abroad and in China. Initially, factories could not resume production fully, as workers could not always return to the factories after the Chinese New Year. As the pandemic spread internationally, customers reduced orders.
As shown in the table below, retail sales, import-export, and investment were more resilient in Chongqing.

Although Chongqing has gained the upper hand in the first part of 2020, Guangzhou has built up many strengths so that the two cities are not comparable since the beginning of the reform policy.

Incomparable?

GDP per capita and disposable income are more than twice as high in Guangzhou and urbanization is more advanced. Chongqing has not been part of Sichuan province since the 1990s and depends directly on the central government. This “city-province”, which has an area close to that of Austria, is ten times larger than Guangzhou. The strategy is to make it a significant pole of China’s development from the interior. The 2000s saw robust growth with peaks in 2007 (+23.9%) and 2011 (+26.32%).

Is Chongqing losing importance?

The city may be weakening its position as a central hub in favour of Chengdu. Indeed, river transport is losing ground to air transport, Chongqing can no longer exploit its fundamental role in its domain. Moreover, for new technology products, the cost of transportation is not a determining factor.

For its part, Canton has already successfully begun its shift towards new technologies, which already generate a quarter of the local GDP. The downward trend is not expected to continue, the decline is undoubtedly cyclical. Chongqing benefits from its size effect, but the city is still far behind in terms of income and average per capita GDP.

Articles on the export sector in China :

Export rebound? Yes, but!

Export Reconversion

China-India, where to go?

Source:
重庆GDP首超广州!对不起,一线城市还是北上广深

1rst August 2020

Posted on Categories Economy

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