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China’s rich provinces post slower growth than national economy on COVID curbs

Some of China’s most affluent regions reported slower growth in the first three quarters of the year than the national economy, as COVID-19 curbs disrupted factory and consumer activity.

Gross domestic product (GDP) for the world’s second-biggest economy expanded 3.0% in January-September from a year earlier, but provincial data released through Wednesday showed weaker performances in four of the 10 biggest regional economies: Guangdong, Jiangsu and Sichuan provinces, and Shanghai.

Ongoing strict COVID containment measures suggest the more prosperous areas are struggling to help drive the national recovery.

The economy of Guangdong, the southern economic powerhouse, and Jiangsu in the east, each grew 2.3%.Sichuan’s growth slowed to 1.5% from 2.8% in the first half of 2022.

Guangdong and Sichuan were hit hard by virus curbs in the third quarter, with tech hub Shenzhen and southwestern metropolis Chengdu in Sichuan slammed by restrictions and lockdowns in September.

China’s capital Beijing eked out 0.8% growth in the first three quarters.

Premier Li Keqiang in July urged major provinces to make more efforts to keep the economy operating within a reasonable range as they are vital in absorbing migrant workers and underpinning their incomes.

With the economy set to miss the government’s 2022 target of around 5.5% GDP growth, the state council, China’s cabinet, told major provinces to strive to achieve their targets. National GDP growth is expected to slow to 3.2% for the year, according to a Reuters survey, among the worst performances in almost half a century.

While COVID-hit Shanghai and northeastern rust-belt Jilin were trying hard to shake off the lockdown pain from earlier this year, their GDP growth still contracted in the first three quarters, although the pace of declines slowed from the first six months.

GDP in tropical southern province Hainan fell 0.5% for the first three quarters, reversing a 1.6% gain in the first half as the island’s main tourist hub, Sanya, locked down tens of thousands tourists in August.

Policymakers said on Wednesday that growth remains a priority, vowing to press on with reforms, an attempt to soothe fears that ideology could take precedence as Xi Jinping began a new leadership term with the COVID curbs continuing.
Source: Reuters

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