China’s southern megacities dealt contrasting economic fortunes as hi-tech Shenzhen thrives

Divergence in economic performance was cited as one of the major challenges facing China’s economy by the top-level Politburo

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Workers producing garments at a textile factory that supplies clothes to fast fashion e-commerce company Shein in Guangzhou. Photo: AFP

Frank Chenin ShanghaiandHe Huifengin Guangdong

Published: 10:00am, 31 Jul 2024Updated: 10:09am, 31 Jul 2024

The economic divergence between the two megacities of the Greater Bay Area – Guangzhou and Shenzhen – could not be starker in the first half of this year, despite being just 100km (62 miles) apart in the southern province of Guangdong.

Guangzhou’s gross domestic product grew by a mere 2.5 per cent year on year – a rate lower than Guangdong’s and the national average – to 1.43 trillion yuan (US$197 billion).

It also lagged other first-tier cities of Shanghai, Beijing and Shenzhen in terms of GDP and growth.

The tech hub of Shenzhen, though, revealed a glowing report card as its economy expanded by 5.9 per cent to 1.73 trillion yuan, ranking only after Shanghai and Beijing.

A divergence in economic performance was cited as one of the major challenges facing China’s economy in an official readout of July’s Politburo meeting, which was convened by President Xi Jinping on Tuesday to discuss boosting the economy and executing the reforms discussed during the third plenum.

“The adverse effects of the current external environment shifts are increasing, domestic effective demand is insufficient and economic operation is showing differentiation,” said the readout released by the official Xinhua News Agency.