As Guangdong GDP growth lags, is Jiangsu on track for No 1 spot in China?

The eastern Chinese province of Jiangsu, which topped the national economic growth table in the first quarter of this year, is edging closer to Guangdong’s position as the country’s largest provincial economy.

Jiangsu’s quarterly gross domestic product rose 5.9 per cent, year on year, to 3.309 trillion yuan (US$453 billion), narrowing the gap with Guangdong – which has ranked No 1 for over four decades – to around 44 billion yuan, according to data released by the provincial authorities.

Guangdong, which neighbours Hong Kong and Macau and pioneered China’s reform and opening up, saw its economic output grow 4.1 per cent to 3.353 trillion yuan in the same period. Its growth was lower than the national average of 5.3 per cent.

Analysts attributed the southern province’s struggles to its previous overreliance on the property sector, weak consumption, sluggish investment and the impact of trade tensions on exports.

“Guangdong is still undergoing painful economic restructuring, shifting from reliance on real estate to infrastructure and industrial investment. However, the overall economy remains weighed down by debt-ridden property developers,” said David Wong, a lecturer at the Hang Seng University of Hong Kong, who added that made its economic predicament more challenging than that of other developed regions.

Guangdong and Hainan were the only Chinese provinces to see declines in fixed-asset investment in the first quarter, recording falls of 6.2 per cent and 1.2 per cent, respectively.