Provincial govt efforts to balance stability, reforms helped growth: experts
South China's Guangdong Province reaffirmed its position as the largest economy by GDP among the 31 provinces and municipalities in the Chinese mainland in 2016, having posted relatively fast growth. Experts pointed out Monday that the nation's economic powerhouse was mainly boosted by government efforts to stabilize the economy and by overheating housing prices.
In a year marked by deepening structural reforms and tough economic conditions both at home and abroad, Guangdong's economy grew by 7.5 percent year-on-year to 7.95 trillion yuan ($1.16 trillion), according to data released Sunday by the Statistics Bureau of Guangdong Province.
Though Guangdong's GDP growth in 2016 slowed down from 8 percent in the previous year, it remained faster than the national average of 6.7 percent. This is the 28th consecutive year that the province's GDP volume was the largest in the country, according to an article posted on the Guangdong Provincial government's website on Monday.
If Guangdong was a country, its economy would be the 16th largest in the world, the article added.
Guangdong also became the first Chinese province (or municipality) to generate over 1 trillion yuan in general revenue, having expanded by 10.3 percent year-on-year in 2016, the article noted.
In 2016, not only did Guangdong maintain its "overall stable" economic growth, but new positive changes also surfaced, Xing Xiaowei, director of the Guangdong statistics bureau, said in the article.
Improved economic structure
The economic structure has been improved, as innovation and consumption increasingly become important growth driving forces for the local economy, Xing said, noting that "under the new normal, the transformation of Guangdong's economic structure and the change in [economic driving forces] has picked up pace."
Total sales of consumer goods in Guangdong exceeded 3.5 trillion yuan, up 10.2 percent year-on-year, while the services sectors also grew fast, with profits earned by major services firms increasing 21.7 percent year-on-year, according to the official data.
This comes as the old growth driving forces lag behind. For instance, Guangdong, once dubbed the "world factory," used to rely heavily on trade, but exports were down 0.8 percent and imports remains unchanged in 2016.
Xing further stated that the efforts by Guangdong's provincial government to maintain balance between stabilizing growth and implementing structural reforms helped its economic growth during the year.
Additionally, Guangdong's position as an open and market-oriented economy makes it more adoptive to changes and easier to maintain balance, according to Ding Li, a regional economy expert at the Guangdong Academy of Social Sciences.
"Cutting outdated capacity, while adding effective supply is a key part of the structural reform, and the market can decide better than any other forces," Ding told the Global Times on Monday. "Guangdong has better experience in this area."
Housing concerns
However, overheating prices in Guangdong's real estate sector might have also contributed largely to its economic growth in 2016, Liu Xuezhi, a macroeconomist with the Bank of Communications told the Global Times on Monday.
"The housing market definitely lift ed economic growth," he said.
Guangdong is home to two first-tier cities - Guangzhou and Shenzhen - with some of the most expensive housing prices in the country.
In 2016, commercial housing sales reached more than 1.6 trillion yuan, up 41.7 percent on year-on-year basis and real estate investment also grew by 20.7 percent, according to official data.
Experts said that the reliance on real estate could pose some risks for the Guangdong economy going forward. Xing, with the statistics bureau, also said in the article that Guangdong will have to implement regulations on the real estate market to stop it from overheating.
