Industrial differentiation in the region intensified in October

In October, the differentiation of industrial data from various regions further intensified.

Among them, the growth rate of industrial enterprises above designated size in Henan, Hubei, Shandong and Zhejiang was 4.5%, 3.7%, 4.8% and 5.8%, respectively, which were 0.8, 4.4, 1.6 and 1.8 percentage points lower than that of September respectively. In Chongqing, the growth rate of industrial enterprises above designated size was -2.5% in October, which was 4 percentage points lower than that in September.

There are also some areas where industrial data is eye-catching. In October, the growth rate of industrial enterprises above designated size in Liaoning, Shaanxi and Hebei exceeded 10%, which was 3.3, 4.7 and 2.5 percentage points higher than that in September.

Why is there differentiation? It is related to the different market conditions of the pillar industries. For example, Shandong’s home appliances, Hubei, Chongqing’s cars, Henan’s mobile phones and other products have seen a decline in production.

Professor Wang Wei, Executive Director of the Urban and Rural Consumption and Population Research Center of Shanghai University of Finance and Economics, told reporters that the decline in the output of some consumer goods was related to the slowdown in real estate development, and some products were affected by exports. “Now the low-end products are not lacking, the key is to have higher quality products.”

Intensified industrial differentiation

According to data released by the National Bureau of Statistics, industrial growth in some areas in the southwestern and central regions slowed down significantly in October.

For example, the growth rate of industrial enterprises above designated size in Henan in October was 4.5%, lower than the 5.3% growth rate in September. In Hubei and Zhejiang, the growth rate of industrial enterprises above designated size was 3.7% and 5.8% respectively, which was also lower than the 8.1% and 7.6% in September. The growth rate of industrial enterprises above designated size in Chongqing was -2.5% in October, 4 percentage points lower than the previous month.

In addition, since July, the growth rate of industrial enterprises above designated size has clearly “downgraded”. In October, the growth rate of industrial enterprises above designated size was 7.6%. Compared with the data of 9%-10% in the first half of this year, there are also obvious slow. In addition, the growth rate of industrial enterprises above designated size in Shanghai, Guangxi and Gansu in October was 2.9%, 3% and -1.6% respectively.

The changes in these data have made the regional sector show new economic characteristics. In the past few years, the overall economic performance of the southwest and central regions has performed well, but the economic division within these regions has intensified.

Why is the growth rate of some local industries slowing down? The 21st Century Business Herald reporter found that this is related to the development of pillar industries in various regions.

Taking Guizhou as an example, as a major wine producing province in the country, it is more affected by the slowdown in alcohol consumption. According to the National Bureau of Statistics, the national liquor production growth rate was -2.9% in October, and beer and wine production were -1.4% and -7.4%, respectively. According to data from the Guizhou Bureau of Statistics, the production of liquor in Guizhou in September was 28,300 kiloliters, an increase of -15.3%.

“Beer consumption has been declining for a long time. The sales of liquors have been good for some time, and now there are fluctuations.” Liu, a full-time vice president of the China Alcohol Distribution Association, told reporters that “the current wines are still overcapacity, production and sales appear. Fluctuation is also normal. Look at the data for a few months and see if consumption will improve.”

In Henan, industrial growth slowed down, which was related to mobile phones in leading industries. In Henan, the output of mobile communication handsets (mobile phones) in October was 13.1643 million units, a year-on-year decrease of 55.5%.

The slowdown in industrial growth in Chongqing is also related to the automobile and mobile phone industries. For example, in Chongqing and Guizhou, mobile phone production in October was 14.43 million units and 2.107 million units, a significant drop from the 27.27 million units and 2,947,800 units in the same period last year. In addition, Hubei and Chongqing’s October car production was 193,000 units and 130,300 units, respectively, compared with 243,300 units and 234,600 units in the same period last year.

In October, local industries were accelerating. The growth rate of industrial enterprises above designated size in Hebei, Liaoning and Shaanxi was 10.2%, 11.8% and 11.8%, respectively, higher than the 7.7%, 8.5% and 7.1% growth rates in September. The acceleration of industry in these provinces is also related to the acceleration of leading industries. For example, Hebei’s crude steel output in October was 2,188.7 million tons, the highest in a single month, up from 20,538,900 tons last month and 150.56 million tons in the same period last year.

Liaoning’s vehicle production in October was 74,100 units, up from 72,600 units in the same period last year. Shaanxi’s October crude oil production was 3.01 million tons, up from 29.26 million tons in September, and the level of 2.959 million tons in the same period last year.

Tian Jingli, senior economist of Shaanxi Information Center, pointed out that the current growth rate of private investment in Shaanxi is above 25%, which is obviously better than the growth level in 2016 and 2017. In the third quarter, Shaanxi newly registered 2,200,000 market entities, an increase of 60.33%, and the growth rate was 27.7 percentage points higher than the same period in 2017.

“This is a performance of the business environment has greatly improved the enthusiasm for social investment. Shaanxi’s economic target has increased by 8% this year. It is expected that the completion of the target is not difficult. However, it should be noted that from the perspective of enterprise efficiency, the profits of industrial enterprises above designated size are also falling.” she says.

Improving product quality is the key

Chen Yao, secretary general of the China Association of Regional Economics, said that the slowdown in the production and sales of some consumer goods has led to a downturn in some provinces.

According to the National Bureau of Statistics, industrial products that tend to have zero or negative growth in October are not only cars, tobacco and alcohol, mobile phones, but also yarns, cloths, proprietary Chinese medicines, and synthetic detergents.

Among them, the output of October cloth was 4.67 billion meters, a year-on-year increase of -0.8%, the synthetic detergent was 830,000 tons, down 5.5% year-on-year, and the proprietary Chinese medicine was 222,000 tons, down 7.1% year-on-year.

The 21st Century Business Herald reporter learned that the provinces related to the above-mentioned consumer goods production have been affected. Then, in the future, a region will occupy the commanding heights of the industry. What industry should it choose?

Chen Yao believes that it is still necessary to rely on market choices to eliminate. “Residents’ demand for a better life is still high. An industry must dominate, and the core is to be able to produce high-quality products.”

The 21st Century Business Herald reporter learned that in Beijing and Shanghai, where there is a lot of money, there is still a mobile phone manufacturing industry. For example, in October, Beijing and Shanghai mobile phone production was 7,725,900 units and 6,,200,500 units, far exceeding the level of 2.107 million units in Guizhou.

Professor Wang Wei believes that many provinces now have more serious industrial homogenization. The overall overcapacity of the national consumer goods industry is also relatively large. What kind of industry to choose for development in the future depends on the market. “A local industry must become a leading industry and have a dominant position. The core is to have goods that meet consumer demand. In this regard, improving quality is still the key.”

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Post time: Dec-17-2018
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