Liaoning posts slowest growth in first half
August 7, 2017 Category Macro-economy, Weekly
China’s northeastern region continued to underperform in the first half of the year, official data showed, with the rustbelt province of Liaoning by far the country’s worst performer with a GDP growth rate of 2.1% in the first half of the year, far slower than the national rate of 6.9%. Heilongjiang was China’s third-worst performer, with growth of 6.3%, while Jilin saw a 6.5% expansion over the period. “We expect headline growth in Northeast-China to remain weak over the coming quarters as the three provinces in the region will continue to suffer from structural problems such as overcapacity and the depletion of natural resources,” said BMI Research in a recent note. Liaoning reported a 31.4% year-on-year decline in fixed asset investment (FAI) in the first half of 2017. Its economy shrank by 2.5% over the whole of last year. Liaoning and the rest of the Northeast face mass layoffs as a result of various state campaigns to slim down state firms, curb industrial overcapacity and ease pollution. With birth rates still low, the region is also facing a spiraling pension and social security burden as young workers leave and the number of people retiring multiplies. China launched a “rejuvenate the Northeast” campaign in 2003 in a bid to provide new forms of growth for the region, but critics say the program failed to handle the root causes of decline, with heavy infrastructure spending serving to bolster the state sector rather than reducing it. Local governments are now under pressure to stimulate the private economy, the South China Morning Post reports.
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