A rival provincial powerhouse, with a GDP as big as some G7 nations, is becoming a hub for strategic emerging sectors while outpacing the national economic growth rate
The long-standing rivalry between China’s two largest economic heavyweights – with each boasting a gross domestic product comparable to Group of Seven members Italy and Canada – reflects the regional dynamism and shifting economic gravity within the world’s second-biggest economy.
Jiangsu has been threatening to end Guangdong’s uninterrupted reign as China’s largest provincial economy since the late 1980s, and the latest economic data reveals the gap between the two narrowed further in the first quarter of this year.
The quarterly disparity between the provinces has shrunk to just 40 billion yuan (US$5.85 billion).
Observers point to how tech and frontier industries are turbocharging Jiangsu’s rise, while a protracted property sector slump and weak consumption drag on Guangdong. The race is expected to lift China’s overall growth, as the two provinces combine to account for more than 20 per cent of national economic output.
“To put the competition between the two Chinese provinces into context, it’s like California, the largest economy among the 50 American states, is one day being surpassed by [second-largest] Texas, as the latter, quite like Jiangsu, has a big manufacturing sector,” said Zhu Lisheng, an analyst with the Jiangsu-based Langchao Finance and Industry Institute, a private consultancy.
“In both China and the US, the shift of economic gravity will affect business decisions about where to invest, and young people’s choice of where to pursue opportunities,” said Zhu, who expects that businesses and talent may be drawn to Jiangsu as it overtakes Guangdong in the coming years.
Source: News - South China Morning Post
