Author: John in Shenzhen and Hong Kong
Link: https://zhuanlan.zhihu.com/p/711188853
Source: Zhihu
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Recently, the economic data for the first half of the year in Guangdong has been released, with a year-on-year growth of 3.9%, which is 1.1 percentage points lower than the national growth rate of 5.0%. Moreover, the 3.9% growth rate is adjusted for price, if we directly divide the data for the first half of this year by the data for the first half of last year, which is the nominal growth rate, it is actually only 3.7%. As the largest province in terms of economic scale in the country, this performance is really disappointing. Guangdong used to drive the national economy, but now it has become a drag. Compared with other provinces and cities, Guangdong's growth rate has fallen to the bottom range. The only provinces with lower growth rates than Guangdong are Hainan, Guangxi, and Yunnan. As the top province in the country, what exactly is the problem with Guangdong? I have analyzed the data for Guangdong. In terms of the three major industries, the growth rate of the primary industry is 3.1%; the growth rate of the secondary industry is 5.7%; and the growth rate of the tertiary industry, which is the service industry, is 2.7%. Obviously, the problem lies in the tertiary industry. In terms of the traditional "three drivers" that drive economic growth, investment, consumption, and exports, two out of three have failed in Guangdong. Consumption is very sluggish (growing by 1.2%), and investment is directly negative (decreasing by 1.5%), with only exports showing a strong growth (increasing by 13.8%). Let's take a look at the consumption data for Guangdong. In the first half of the year, the total retail sales of consumer goods in the province amounted to 2.35 trillion yuan, with a year-on-year growth of 1.2%. In terms of the location of the operating units, urban retail sales of consumer goods increased by 0.6%, while rural retail sales of consumer goods increased by 4.9%. Unexpectedly, rural consumption is still good, but urban consumption is almost stagnant. Of course, urban consumption is generally not as good as rural consumption now. Nationwide, in the first half of the year, rural retail sales of consumer goods increased by 4.5%, while urban retail sales increased by 3.6%, a difference of 0.9 percentage points. However, in Guangdong, the difference is 4.3 percentage points, which is quite significant. Urban consumption, in other words, refers to urban consumption. With a growth rate of 0.6%, it indicates that urban residents in Guangdong are no longer able to consume. Shenzhen's data for the first half of the year was released this morning. I took a look and found that production is booming, with an increase of 12% in value-added industrial output and a growth of 31.7% in imports and exports. However, consumption is very weak, with a total retail sales of consumer goods increasing by only 1%, which is even lower than the provincial average. The data for Dongguan in the first half of the year has also been released. Dongguan's data is similar to Shenzhen's, with good production performance, a 10% increase in industrial added value, but poor consumption performance, with a 1% increase in total retail sales. By the way, in terms of the release of statistical data, Shenzhen and Dongguan are usually the fastest. So far, the data for the other three cities for the first half of the year has not been released, only the data for January to May is available. The total retail sales of consumer goods in Guangzhou, Foshan, and Huizhou increased by 2.0%, 2.4%, and 4.1% respectively compared to the same period last year. It can be seen that even among the five cities in the Greater Bay Area, there are differences. The rule is that the higher the degree of urbanization, the lower the growth rate of consumption. Therefore, Shenzhen and Dongguan have the lowest growth rates, while Huizhou, with more rural areas, has a relatively higher growth rate. There are many types of consumer goods, so which ones have poor sales? It is not clear from the official press releases because they only mention the goods with good growth rates. For example, the press release for Shenzhen says that the sales of daily necessities are good, with a growth rate of 12.6% for grain and oil products. The implicit meaning behind this is that the sales of other non-essential consumer goods are not good. When I was looking up the data for Guangzhou, I found the specific sales of goods for January to May. Among the 13 major categories of goods, three categories had negative growth, namely automobiles (-10.9%), petroleum and related products (-5.2%), and household appliances and audiovisual equipment (-5.0%). Daily necessities and communication equipment also only had growth rates of one or two percentage points. This indicates that people are now saving as much as possible and reducing expenses. Except for essential food items, they try not to consume non-essential items, such as not buying new cars, driving less, not replacing household appliances, and not buying new phones. From the above data, we can draw a picture. On the one hand, production is running at a high speed, and a large number of products produced are exported abroad. On the other hand, consumption is very weak. The hardworking people in Shenzhen, Guangzhou, and Dongguan, after earning money from work, use it to pay off mortgages or save it in the bank, except for buying essential daily necessities. The cities with the worst consumption data, Shenzhen, Guangzhou, and Dongguan, happen to have the highest housing prices in Guangdong. This is also easy to understand. The workers in these three cities have the most housing loans. In the current period of deep adjustment in housing prices and high unemployment rates, the impact on their assets is also the most severe. It can be said that the crowding-out effect of high housing prices on consumption and the blow to consumer confidence caused by the decline in the real estate market have quietly emerged in the economic data for the first half of the year in Guangdong. From 2021 to 2023, Guangdong's GDP growth rate has been lower than the national average for three consecutive years, and the gap between its growth rate and the national average has further widened in the first half of this year. The real estate market in Shenzhen and Guangzhou has been declining since 2021, and there is no sign of slowing down this year. The speed and depth of the decline in housing prices in Shenzhen and Guangzhou are obviously higher than that in Beijing and Shanghai, which has a very negative impact on the economy. Compared with Guangdong, the impact of real estate on Jiangsu's economy is relatively smaller. The housing bubble in major cities in Jiangsu, such as Suzhou and Nanjing, is much smaller than that in Shenzhen and Guangzhou. Moreover, Jiangsu has a developed county economy, and its population and industries are more evenly distributed. Correspondingly, Jiangsu's service industry and consumption data are much better. In the first half of the year, the growth rate of Jiangsu's tertiary industry was 4.8%, which is 2.1 percentage points higher than that of Guangdong, and the total retail sales of consumer goods increased by 4.9%, which is 3.7 percentage points higher than that of Guangdong. With the advantages of the service industry and consumption, Jiangsu achieved a better-than-expected growth rate of 5.8% in the first half of the year, and the GDP gap between Jiangsu and Guangdong narrowed from 300 billion yuan in the first quarter to 200 billion yuan. If this trend continues, it will be uncertain whether Guangdong can maintain its position as the top economic province at the end of the year.