Financial turbulence and the trade war with the United States weigh heavily on rural areas. Rich Guangdong exceeds the government's growth target by 0.2 per cent. Other areas are struggling. In the first 9 months of the year they are underperforming. Expert warns the trend is getting worse.
Beijing (AsiaNews/Agencies) – China’s rural areas have failed to meet the growth targets set by the government for 2019. Analysts note that domestic structural issues and the fallout from the trade war with the United States are the main factors.
The poorest regions of Asia’s juggernaut are suffering the most, whilst the coastal areas – always wealthier – have responded better to the economic and financial turbulence that hit the country in the past two years. However, this is likely to exacerbate the regional wealth gap even further.
Guangdong is by far China’s richest province, growing at a rate of 6.4 per cent in the first nine months of 2019, slightly higher than the national rate of 6.2 per cent. Conversely, north-eastern provinces have underperformed.
Liaoning came closest to its 6 to 6.5 per cent target, growing 5.7 per cent. Heilongjiang expanded by 4.3 per cent, shy of its 2019 target of more than 5 per cent. Jilin instead recorded a mere 1.8 per cent growth rate, well short of its target of 5-6 per cent.
Shandong, Hainan and Guangxi also fell behind their targets so far. Data for Xinjiang and Hebei are not yet available.
“The trend [of a widening gap] is inevitable, taking into account the overall economic structural problem … the contrast in growth among the regions will become more obvious,” said Shao Yu, Orient Securities’ chief economist.
China’s official local government debt, measured in local government bonds, stood at 21 trillion yuan (US.97 trillion) at the end of September this year, official data show.
Beijing has launched a deleveraging drive to rein in excess debt; however, this has effectively cut off funding to the private sector, which accounts for 60 per cent of economic growth.