Guangzhou stumbles as it bids to overtake Hong Kong economy

Guangzhou’s GDP growth slowed in the first quarter, denting the huge southern Chinese city’s hopes that its economy will overtake Hong Kong’s this year.

The city posted economic growth of 4.3 per cent in the first three months of 2018, according to official figures, compared with an expansion of 8.2 per cent in the same period last year.

Guangzhou’s Mayor Wen Guohui previously forecast the city’s GDP would expand 7.5 per cent in 2018. Analysts had suggested that if Guangzhou and neighbouring Shenzhen met their targets the two cities’ economies would both be bigger than that of Hong Kong for the first time by the end of the year, but the latest figures throw this in doubt.

An economist close to the municipal government, who asked not to be named, said: “The latest economic figures come as a surprise to the municipal government. We need to wait and see if there can be an efficient and quick economic recovery later this year.”

The statistics were also a blow to Guangzhou amid fierce competition among cities in the “Greater Bay Area”, which includes Hong Kong and Shenzhen, to attract capital and the most talented workforce, the economist said.

China’s government hopes the development of the bay area around the Pearl River Delta will create a region to rival other economic powerhouses around the world, such as New York, San Francisco and Tokyo bay.