China’s ‘K-shaped’ economy is divided not just by sector, but geography
The divide between China’s booming tech industry and struggling consumer sector has drawn attention. But regional disparities are also widening
But a similar pattern is also taking shape geographically, with regions benefiting unequally from the tech boom.
Chinese provinces have now released their growth data for the first half of the year, and the figures show a clear bifurcation between thriving tech hubs and the rest of the country.
The eastern Zhejiang province – home to tech giant Alibaba Group Holding, as well as high-flying artificial intelligence and robotics start-ups DeepSeek and Unitree – led China’s major regional economies, with its output growing 5.7 per cent year on year to nearly 4.8 trillion yuan (US$708 billion). Alibaba owns the South China Morning Post.
This outperformed China’s national growth rate of 4.7 per cent for the first half, even as several other provinces lagged significantly behind.
“Provincial growth data echoes China’s K-shaped story,” said Xu Tianchen, senior economist at the Economist Intelligence Unit (EIU).