China | China's rust-belt provinces getting their act together
China's First Automotive Works (FAW) plant in Changchun, capital of northeastern Jilin province. Photo: Reuters/Claro Cortes
China's First Automotive Works (FAW) plant in Changchun, capital of northeastern Jilin province. Photo: Reuters/Claro Cortes

China’s rust-belt provinces getting their act together

GDP growth estimates for Heilongjiang and Jilin are equal to or better than the national average

October 28, 2016 4:10 PM (UTC+8)

Two of China’s three northeast rust-belt provinces, Heilongjiang and Jilin, are shaking off their reputations as being among the country’s worst GDP growth performers.

Estimates released by the National Development and Reform Commission (NDRC) put growth over the first three quarters at 7.9% for Jilin and 6.7% for Heilongjiang.

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Last week, the NDRC said China’s economy grew 6.7% in the first three quarters, in line with expectations and Beijing’s full-year target.

So far, 27 of the country’s 32 provinces, autonomous regions and municipalities, have officially announced their GDP figures for the first three quarters, with Shanxi the worst performer, declaring 4% growth.

Jilin has shown improvement since the start of the year, recording 6.2% growth in the first quarter and 6.7% for the first half year, while Heilongjiang’s figures have improved from 5.1% in the first quarter and 5.7% over the first six months.

The improvements have been put down to continuous government support to revitalize the traditional industrial base since 2003.

Jilin is considered to have a simpler economic structure than its heavy industrial neighbor, and attributes its superior GDP growth to increased demand for its automotive production and agriculture.

Meanwhile, Heilongjiang, which shares a border with Russia, has been vigorously importing high-end industries from its northern neighbor for its planned industrial park in Harbin.

“The imported high value-add industries include space technology, 3D printing and robot technology,” Song Kui, a senior National Policy Commission analyst, was reported as saying in China Business.

He added that the depreciation of the Russian ruble has also helped with making cross-border purchases. The weaker currency has also resulted in more Chinese tourists travelling to Russia via Heilongjiang, which has had a beneficial spinoff effect in the province.

But it’s not a total success story for the northeast region. Liaoning, the third of the traditional rust-belt provinces, is still regarded as an underperformer.

With its reliance on state-owned former pillar industries of the economy, such as heavy chemicals, the province faces major challenges from the supply side reforms being instigated by President Xi Jinping.

In the first quarter Liaoning recorded -1.3% GDP growth, with a slight improvement for the half year of -1.%.

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