Shenzhen’s retail sales flatline as export boom fails to benefit residents
Shenzhen’s retail sales barely rose in the first quarter despite strong GDP growth, a sign of the Chinese tech hub’s unbalanced development
China’s top tech hub, Shenzhen, saw retail sales grow by just 0.5 per cent year on year in the first quarter after reporting gross domestic product growth of 5.8 per cent for the same period, casting a spotlight on its unbalanced development as mortgage and living costs weigh heavily on residents’ sentiment.
A policy analyst said the city, in southern China’s Guangdong province, could have already seen retail sales decline if not for the rising number of bargain-hunters from Hong Kong crossing the border for dining and entertainment.
Shenzhen’s retail sales totalled 241.7 billion yuan (US$35.4 billion) in the first three months of the year, according to official data. The 0.5 per cent growth in the first quarter contrasted strongly with the 2.3 per cent rise seen for all of last year.
Guangzhou, the provincial capital, registered retail sales growth of 6.6 per cent in the first quarter.
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Zhuang Wenyue, an analyst with the South China University of Technology’s Institute of Public Policy, said an unbalanced growth pattern, heavily reliant on export manufacturing, and high mortgage and living costs were to blame for Shenzhen consumers’ increasing timidity when it came to opening their wallets.
“Shenzhen’s high GDP growth is driven by strong industrial and export development but the benefit rarely trickles down to residents, with the increased GDP created going to research and development, industrial expansion and reinvestment,” he said.