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China’s economic imbalances laid bare by new figures showing the rich get richer, as poor provinces lag
- Exporting powerhouse of Guangdong absorbed more funds than any other province in China last year, cementing its status as most dynamic economy
- Disparity in regional funding partly due to shift in focus by China’s Communist Party, which now funnels money towards best performing economies
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Cash from China’s financial system flowed mainly to the affluent Pearl River and Yangtze River Deltas in 2019, while funding for hard hit rust-belt provinces dried up, according to new figures published by its central bank.
The figures offered fresh evidence of an increasing unequal financial landscape in the world’s second biggest economy.
Rich areas continue to absorb more funds and talent to become richer, while poor areas lag behind. This imbalance presents a significant challenge for Beijing, as it attempts to navigate the wider issues that come with slowing economic growth.
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Guangdong, the economic powerhouse adjoining Hong Kong, topped the list of provincial funding compiled by the People’s Bank of China, receiving 2.92 trillion yuan (US$417 billion) in the form of bank loans, bond issuance, and trust investments. This was 11.4 per cent of the national total. Guangdong accounts for 8.1 per cent of China’s population and 10.9 per cent of economic output.
In second place was Jiangsu, China’s second largest provincial economy, which received 2.41 trillion yuan, followed by Zhejiang, another economic heavyweight, on 2.22 trillion. China’s capital of Beijing was the only northern region to feature high up in the rankings, absorbing 1.46 trillion yuan in financial flows.
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Hubei, meanwhile, the epicentre of the coronavirus, was in 10th position, with funding of 873.4 billion yuan (US$125 billion) last year.
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