The GDP increment is negative! This provincial capital is difficult!

Financial vernacular

2024-05-11 13:19Posted in Guangdong real estate creators

Author: Yu Fei

​01

Shanxi, the first reduction

Jiangxi, Guangxi, Shanxi, Shaanxi, Henan, Heilongjiang and other provinces and autonomous regions, which were in the midst of water reversal last year, are still in the water reversal this year.

Among them, Shanxi and Henan are the most. Because in the first quarter of this year, the GDP of these two provinces decreased compared to last year.

Henan's GDP in the first quarter of this year decreased by 20.363 billion yuan compared with the same period last year, with a real growth of 4.7% and a nominal growth of -1.36%.

Shanxi has reduced even more. In the first quarter, Shanxi's GDP decreased by 42.477 billion yuan compared with the same period last year, ranking first in the country, with a real growth of 1.2% and a nominal growth of -7.29%.

If the increment is negative, why can the actual growth rate still be positive? Here is another explanation of the real and nominal growth rates.

The nominal growth rate is calculated at current prices, which is simply understood as the ratio of the increment to last year's base. The actual growth rate is calculated at constant prices after deducting inflation or deflation, which is not known to ordinary people, and can only rely on official direct data.

In past inflationary years, nominal growth has generally been higher than real growth. Today, however, nominal growth has generally been slower than real.

Therefore, in order to avoid readers not being able to understand it, I simply listed the nominal growth rate directly in this article, which is clear at a glance.

Cartography: City Finance; Data: Statistical Bureaus of Provinces, Municipalities and Autonomous Regions

Behind the negative increase in the province is the weakness of the prefecture-level cities under its jurisdiction.

Looking at the 18 cities under the jurisdiction of Henan, there were 13 negative GDP increments in the first quarter, including Xuchang, Luoyang, Pingdingshan, Zhoukou, Zhumadian, Shangqiu, Xinyang, Kaifeng, Hebi, Jiyuan, Sanmenxia, Jiaozuo, and Xinxiang.

Cartography: City Finance; Data: Municipal statistical bureaus

Of the 11 cities under the jurisdiction of Shanxi, 9 cities that have released data so far, all had negative increases in the first quarter, including the provincial capital Taiyuan.

Cartography: City Finance; Data: Municipal statistical bureaus

02

What's wrong with Shanxi

Regarding Henan's GDP reduction, this issue specially wrote "GDP increment is negative!" on April 22. The province with the largest population, the water is reversed", which will not be repeated here.

This article mainly looks at Shanxi.

From the data side, it is mainly the industrial decline.

According to the Shanxi Provincial Bureau of Statistics, the added value of the secondary industry (generalized industry) was 250.002 billion yuan, down 0.3%.

In terms of specific industries, in the first quarter, the added value of industrial enterprises above designated size in the province fell by 2.1%. In terms of the three major categories, the mining industry decreased by 3.1 percent, the manufacturing industry decreased by 0.4 percent, and the production and supply of electricity, heat, gas and water increased by 2.2 percent. In terms of coal and non-coal, the coal industry fell by 2.8%, and the non-coal industry decreased by 0.8%. From the perspective of product output, among the main industrial products above the designated size in the province, the output of primary aluminum, power generation, mobile communication handsets, automobiles, unconventional natural gas and other products maintained growth.

It can be seen that the coal industry, which is mainly the pillar industry of Shanxi, has declined.

Shanxi is mainly engaged in the coal and steel industries and the upstream and downstream industrial chains derived from the coal industry. Shanxi's raw coal production ranks first in the country all year round, with 137.146 million tons of coal in 2022.

In 2023, raw coal production will 135658 million tons, an increase of 4.4%.

Source: Shanxi Provincial Bureau of Statistics

As the leading industry in Shanxi Province, its smile affects the economic growth rate of Shanxi Province.

In March this year, Shanxi's raw coal production fell below 10,000 tons to 9,432 tons.

Source: Shanxi Provincial Bureau of Statistics

The impact on Shanxi's economic development can be imagined.

Speaking of Shanxi, like Henan and Shaanxi, it is full of history at a glance. This land was the main battlefield of most wars during the Spring and Autumn Period and the Warring States Period, and was the birthplace of the Li Tang Dynasty.

During the period of the Northern and Southern Dynasties, Datong in Shanxi was the capital of the Northern Wei Dynasty, and the Yungang Grottoes were the products of that time.

Even in the Ming and Qing dynasties, in the context of China's southward economic shift, Shanxi was also very brilliant.

Regarding the prosperity of Shanxi in modern times, the famous scholar Yu Qiuyu disclosed in his book "Cultural Journey" excerpt "Shame Shanxi":

In this century (published in 1992, this century refers to the 20th century) and for a long time before, China's richest province was not the region we can imagine now, but Shanxi! Until the beginning of this century, Shanxi was still China's grand financial and trade center. The top headquarters of the more decent financial institutions in Beijing, Shanghai, Guangzhou, Wuhan and other cities are mostly located in a few ordinary streets of Pingyao and Taigu counties in Shanxi, and these big cities are just docks for Shanxi businessmen with a lot of money to try their skills.

In modern times, coal has made Shanxi brilliant again, but this time, it can be said that it is also coal and coal is sleepy.

The abundant coal resources allowed Shanxi to enjoy its achievements before and after the reform.

According to statistics, from 1978 to 2007, Shanxi produced a total of 8.24 billion tons of coal, 7.44 times that of the 28 years before the reform and opening up, accounting for more than 1/4 of the country's total production, and coal was exported to more than 20 countries, accounting for more than 50% of the country's total exports.

The province is dominated by coal, all walks of life look at the eyebrows of the coal brother and speak, the cadres involved in coal climb faster than anyone else, and the boss who relies on coal to show his courage has made a fortune. Especially after the opening, the private sector also excavated. At one time, where there were coal resources, almost every village was full of holes, and coal piles were everywhere. The god of "coal" dominates Shanxi.

Of course, Shanxi coal has played an important role in promoting the development of the national economy, and Shanxi's contribution is indelible.

According to official data from Shanxi Province, in the development process of New China, from 1949 to the end of November 2014, Shanxi produced a total of 16.4 billion tons of coal, of which 70% was used for export, plus the transportation of coke, electricity and other products, Shanxi has made great contributions to ensuring national energy security and promoting economic construction and development. The remarkable performance of China's economic development over the past 30 years of reform and opening up is inseparable from the strong support of Shanxi coal. The first decade of this century was the period of China's fastest economic development, with an average annual growth rate of 12.3%, and Shanxi's coal production increased from 250 million tons in 2000 to 740 million tons in 2010, an average annual growth rate of 11.4%. It can be said that without the vigorous drive of Shanxi coal, there would be no rapid development of China's economy, and Shanxi coal is the engine of China's economic take-off.

It has made a huge contribution to Shanxi's own economy. According to the data, the added value of the coal industry in Shanxi Province increased from 26.9% in 2000 to 58.7% in 2011, an increase of more than 30 percentage points.

However, the good fortune came to an end in 2013, when Shanxi's economy suffered as coal prices fell as the country's production capacity was adjusted.

From 2014 to 2016, Shanxi's economic growth rate was at the bottom of the country for three consecutive years, and its GDP ranking fell from 15th in 2008 to 21st in 2020. Ranked 20th in 2023.

Although Shanxi proposed industrial transformation when suffering from the pain of the coal industry, the effect was not satisfactory. Shanxi is still a major province of heavy industry for coal mining, processing and steel production.

Source: Shanxi Provincial Bureau of Statistics

The few mobile phone industries that rely on Foxconn to develop have also been greatly affected by industrial transfer. In 2023, Shanxi's mobile phone production fell by 26.7%.

Source: Shanxi Provincial Bureau of Statistics

03

Taiyuan, the only provincial capital with a negative increment

Shanxi's difficulties are fully reflected in its provincial capital, Taiyuan.

In 2023, Taiyuan's GDP increment will rank first in the bottom of major cities (municipalities directly under the central government, sub-provincial cities, provincial capitals and capital cities), and the growth rate is also at the bottom.

Because of the weak growth rate, Taiyuan postponed the timetable for advancing to one trillion yuan last year.

In November last year, Taiyuan deliberated and passed the "Action Plan of the Taiyuan Municipal Committee of the Communist Party of China and the Taiyuan Municipal People's Government on Implementing the Action Plan of the Shanxi Provincial Party Committee and the Provincial Government to Support Taiyuan City to Build a National Regional Central City", which mentioned:

By 2027, the total economic output will exceed one trillion yuan, the integrated development pattern of the urban agglomeration in central Shanxi will be initially formed, the functional characteristics of the national regional center city will be highlighted in many directions, and the leading role of the provincial capital will be fully demonstrated. By 2035, we will lead the province to achieve comprehensive transformation, basically realize socialist modernization together with the whole country, and the central Shanxi urban agglomeration will play a more prominent role in the national map, and build a national regional central city with international influence.

Source: Taiyuan Municipal Government

In this plan, Taiyuan set a timetable for GDP to exceed one trillion yuan in 2027. In the "High-quality Development Plan for the Central Shanxi Urban Agglomeration (2022-2035)" released a year ago, the time node mentioned is: by 2025, the first degree of Taiyuan provincial capital city will be greatly improved, and the total economic output will move towards one trillion yuan.

If it can't be achieved, it can only be postponed.

Although the increment in Taiyuan last year was countdown, there was still an increase. In the first quarter of this year, Taiyuan's GDP directly shrank by 6.936 billion yuan.

The increment and growth rate are ranked first from the bottom among major cities.

Cartography: City Finance; Data: Municipal statistical bureaus

The reason is also the decline in industry. In the first quarter, the added value of Taiyuan's secondary industry fell by 0.2 percent, and the added value of industrial enterprises above designated size decreased by 2.7 percent.

The fundamental reason is that the industry is too weak.

Taiyuan used to be the son of luck, from the Spring and Autumn Period to the Republic of China, the name was very loud. In history, although Taiyuan did not serve as the capital of the Great Unification Dynasty, it served as the capital of one side of the regime three times.

During the Spring and Autumn Period, after the three families of Zhao, Wei and Han were divided, the capital of Zhao was located in Taiyuan, and later moved to Handan.

The Tang Dynasty, which once made the world look up, flourished in Xi'an and Luoyang, but the dragon vein was in Taiyuan.

After the Western Jin Dynasty, the former Qin regime established by the Di people was first in Taiyuan, and then moved to Chang'an.

During the Five Dynasties and Ten Kingdoms period, Liu Chong, the younger brother of Liu Zhiyuan, the ancestor of the Later Han Dynasty, occupied the twelve states of Hedong when Guo Wei replaced the Later Han and established the Later Zhou Dynasty, and established the country in Taiyuan as the Northern Han Dynasty.

Due to the strong city defense of Taiyuan City and the assistance of the Khitan in the north, this small regime did not perish after passing through the two generations of monarchs (Guo Wei and Chai Rong) in the Later Zhou Dynasty, until the establishment of the Northern Song Dynasty, Zhao Kuangyin failed to destroy him, until Zhao Guangyi came to power and personally conquered the Northern Han Dynasty, and then declared extinction.

During the Northern Song Dynasty, Yuan, Ming and Qing dynasties, Taiyuan seemed to be lonely for a while. However, at this time, the Jin land, which began to stage a large-scale westward exit from the middle of the Ming Dynasty, allowed the Jin merchants to rise, and led to the prosperity of the northern economy and commerce.

During the Republic of China, Yan Xishan sat in Taiyuan and became the base camp of the Jin warlords.

After the founding of the People's Republic of China, Taiyuan was once a son of luck because of the advantages of Shanxi's coal resources.

Because of the industrial and energy advantages, 11 of the country's 156 major industrial projects during the "First Five-Year Plan" period were settled in Taiyuan.

For example, Taiyuan No. 2 Thermal Power Plant, Jiangyang Chemical Plant, and Xing'an Chemical Materials Factory are all built in the northern industrial zone; Popular Machinery Factory, Fenxi Machinery Factory, and Jinxi Machinery Factory were built in the central and northern industrial zones of Hexi; Taiyuan Chemical Plant, Taiyuan Pharmaceutical Factory, and Taiyuan No. 1 Power Plant were all built in the industrial zone in the southwest of Hexi, thus forming the basic pattern of "industrial siege" in Taiyuan today.

After that, Taiyuan was basically planned according to the northern heavy industry city, mainly developing energy and chemical projects focusing on coal, electric power, metallurgy, machinery and chemical industry.

However, lying on the hotbed of resource endowment has made Taiyuan lose its innovative spirit.

After the global financial crisis of 2008 and the capacity contraction after 2010, coal prices plummeted, causing Shanxi to stall. Taiyuan also suffered a heavy blow.

Obviously, if a city or a region sits on top of resources and wealth forever and lives lying down, one day it will sit on empty water. Moreover, a single industrial chain is extremely vulnerable to the uncertainty of the times.

In this context, led by Taiyuan, the entire Shanxi has started industrial transformation.

In its "14th Five-Year Plan", Taiyuan clearly stated that it should strengthen and optimize the four emerging industries of new generation information technology, high-end equipment manufacturing, new material synthesis and processing, and high-quality consumer goods.

But how hard is the transition? If a city's industry wants to successfully turn, it is not possible to issue documents. The business environment needs to change, the thinking needs to change, these do not change, how can the industry and talents come?

Judging from the data released by the Taiyuan Bureau of Statistics, in 2022, traditional industries have accounted for the majority of the current added value of industries above designated size in Taiyuan, accounting for 56.6%. The added value of non-traditional industries accounted for 43.4%.

On the road of transformation, one of the commendable points of Taiyuan is that it has regained the electronics industry and gave birth to a 100 billion industry, computer, communication and other electronic equipment manufacturing industry, which has a total output value of 123.2 billion yuan in 2021, which is one of the two 100 billion industries in Taiyuan, and the other is the ferrous metal smelting and rolling processing industry.

Although the newly established manufacturing of computers, communications and other electronic equipment has become the strongest industry in Taiyuan, it is very small compared to other major cities.

Cartography: City Finance; Data: Municipal statistical bureaus

It can only be said that it is too late for Taiyuan to revitalize this industry, and the strong city pattern of this industry has already been formed, and it is difficult for Taiyuan to even get a piece of the pie.

Under the influence of the economic downturn and weak industry, despite the blessing of the title of provincial capital, Taiyuan's population competitiveness is completely insufficient.

Qipu data shows that from 2010 to 2020, Taiyuan only increased by 1.102 million people, while Shenzhen increased by 7.136 million people, Guangzhou increased by 5.977 million people, Chengdu increased by 5.819 million people, Xi'an increased by 4.485 million people, Zhengzhou, Hangzhou, Chongqing, and Changsha increased by more than 3 million, and Wuhan, Foshan, Suzhou, Beijing, Dongguan, Nanning, and Kunming increased by more than 2 million.

In the past two years, as the population has gradually turned to its peak, Taiyuan's population competitiveness has become weaker and weaker, with an increase of 72,000 in 2021 and 44,000 in 2022.

In 2023, Taiyuan's population data has not yet been released, but the permanent population of Shanxi Province has decreased by 153,600.

At present, among the 11 cities under the jurisdiction of Shanxi, only Taiyuan has not released population data, and the remaining 10 cities that have published data have all negative growth. It can also be calculated that Taiyuan had a permanent population of 19,200 last year.

Cartography: City Finance; Data: Municipal statistical bureaus

Under the macro favorable situation, Taiyuan has not yet grasped the dividends of the times, and now that the macro environment is changing, it is even more difficult for Taiyuan to change.

Despite this, in front of Taiyuan, there is only one way to go through transformation, and it can't lie flat. Taiyuan needs to do three things well in the future:

First, get rid of dependence on real estate.

Second, clean up the business environment and build nests to attract phoenixes.

Third, while continuing to expand and upgrade traditional industries, we must continue to lay out emerging industries and change the characteristics of single and weak industries, so as to enhance our ability to resist pressure.

If the above three points can be achieved, Taiyuan will be able to get out of the water reversal period.

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Personal opinion, for reference only