On October 22, the day after Guangdong released its economic data for the first three quarters of the year, the world’s first domestically developed mobile operating system, the original HarmonyOS, was officially unveiled in Guangdong. This marks it as the third largest mobile operating system globally, following Apple’s iOS and Android.
Guangdong is currently on a “main road” to enhance the quality of its economic development, leading industry transformation through technological breakthroughs and maintaining a proactive stance with innovation.
The province is focused on nurturing a new quality of productivity for high-quality development. However, given various constraints, it recognizes that entirely moving away from traditional development models isn’t a quick process.
The shift from old to new momentum and the changes in economic structure are vividly reflected in the recently released economic report for the first three quarters. The region’s GDP reached 99,939.18 billion yuan, reflecting a year-on-year increase of 3.4%. This number still falls short of the annual growth target of 5%.
So, how can we view the slowdown in Guangdong’s economic growth objectively and rationally? Delving deeper into the data, what new changes lie beneath the surface?
On the same day economic data was published, the power consumption figures for five southern provinces were also released. Beyond GDP figures, we gain another perspective on the economic and social development of Guangdong: the total electricity consumption in the province reached 690.4 billion kilowatt-hours for the first three quarters, remaining the highest in the country, with a growth rate of 7.8%. The secondary industry is driving this increase in electricity demand.
Electricity usage in industry is a critical indicator of the second industry’s development. Despite the growing complexity, severity, and uncertainty of external conditions, Guangdong’s manufacturing sector, the backbone of the economy, continues to emit a vibrant roar from the front lines of industry.
Amid increased overall electricity consumption, the power usage for high-tech and equipment manufacturing sectors is quietly rising. This reflects a structural transformation that is taking place within the province’s secondary industry: the new quality of productivity is becoming increasingly tangible; advanced manufacturing is rapidly transitioning from the vision outlined in Guangdong’s “Manufacturing Leads” plan to a concrete reality that’s driving industrial development and solidifying itself as a central force in the real economy.
The increase in “new” factors is corroborated by other economic data from the first three quarters: the secondary industry maintained a share of about 40%, with industry accounting for 35.9% and manufacturing for 32.7%. Furthermore, the added value of advanced manufacturing and high-tech manufacturing industries accounted for 56.4% and 31.5% of large-scale industrial output, respectively, an increase of 1.3 and 2.8 percentage points year-on-year.
“Whether the economic focus can stabilize depends on the proportion of the secondary industry. With a strong manufacturing base and support from the real economy, this is the foundation upon which our total economic volume stands,” stated Yang Xinhong, Secretary of the Party Leadership Group and Director of the Guangdong Provincial Bureau of Statistics. He emphasized that the rising industrial ratio along with the declining real estate ratio reflects Guangdong’s ongoing efforts to reduce dependence on real estate, strengthening the supportive power of its industrial and investment structures while accumulating new momentum—a critical change currently unfolding in Guangdong’s economic structure.
Regarding foreign trade, which is vital for an economy that relies on it for over 60% of its operations, Guangdong’s trade dynamics significantly influence the overall economic landscape. During the release of the quarterly data, the 136th Canton Fair was taking place in Guangzhou. Often referred to as “China’s No. 1 Expo,” the Canton Fair serves as a clear window for gauging Guangdong’s foreign trade conditions.
Walking through the bustling fairgrounds, it’s impossible not to notice the continued vibrancy of Guangdong’s foreign trade. In the first phase of the fair, which centered on “advanced manufacturing,” out of 11,165 participating enterprises, around 3,600 focused on digital technology and intelligent manufacturing, with 57.8% adopting technologies such as big data, artificial intelligence, and the industrial internet to enhance their supply chains.
Exhibitors showcased a plethora of new products, technologies, materials, and processes, with digital product displays reaching an impressive 390,000 pieces, a staggering increase of 300%. Achieving such a scale of innovation at the Canton Fair, which has been held continuously for decades with two sessions each year, is no small feat. The fair’s increasing speed and quantity of new offerings, alongside adjustments aligned with global industrial trends, reflect Guangdong’s proactive adaptation to changing trade dynamics.
Further analysis of Guangdong’s broader foreign trade climate reveals the difficulties of this structural transformation. For decades, Guangdong built a robust foreign trade foundation by deeply engaging in international division of labor and integrating into global circulation. However, 2023 saw a temporary dip in foreign trade growth, raising concerns in major markets about “losing momentum.”
Alongside the release of Guangdong’s third-quarter economic data, the Guangdong branch of the Customs General Administration announced that the province’s foreign trade reached 6.75 trillion yuan, marking a year-on-year growth of 11.1%, achieving a historical high for the same period.
The development of new quality productivity—leveraging new products to regain market control—has played a crucial role in Guangdong’s rapid recovery in foreign trade, marking another significant change in economic structure after facing external challenges.
Beyond the numbers, over 100 kilometers from the Canton Fair at the Yantian Port in Shenzhen, a multitude of containers is in constant rotation. This port handles over one-third of Guangdong’s foreign trade volume and more than a quarter of the nation’s exports to the U.S.
In the first nine months of 2024 alone, Yantian Port added 16 new shipping routes. Observing these additions reveals a focus on areas such as North America, South America, Australia, and the Mediterranean, including specific routes aimed at serving cross-border e-commerce clients.
These new routes inject fresh momentum into the Greater Bay Area’s foreign trade development while responding to real market demands—evident in the latest economic data: for the first three quarters, trade with over 160 countries and regions saw growth, with imports and exports to ASEAN and Belt and Road Initiative countries increasing by 9.4% and 6.3% respectively. Emerging markets now constitute 64.5% of total trade.
“As our product range expands, so do our export markets, and the industry broadens. New models like cross-border e-commerce provide more support for the economy,” Yang explained, highlighting the fresh winds of foreign trade revitalizing regional dynamics and propelling an acceleration of structural economic shifts.
In navigating towards stability and generating new energy, it is crucial to rationally understand and objectively face challenges. While Guangdong’s GDP growth of 3.4% for the first three quarters reflects a slowdown, it is influenced by the ongoing adjustment of the real estate market and the high comparison base from the previous year.
Concurrently, there’s a clear acknowledgment of the economic transformation bearing structural adjustments, requiring readiness for the ongoing pain associated with these changes. It is essential to focus on the “stable” foundation while also striving for “new” growth drivers.
With an economic total nearing 10 trillion yuan, achieving a one-percent growth requires significantly higher economic value creation than in other provinces, highlighting the challenge. Amidst this, policies fostering demand for upgraded consumption, including substantial investments in new equipment, have led to faster growth; for instance, investment in industrial equipment rose by 19.8%.
The dynamism from private enterprises also stands out. In the first three quarters, Guangdong’s private enterprises saw a trade volume of 4.3 trillion yuan, a 17.1% increase, representing 63.6% of the province’s total foreign trade. Moreover, private sector growth outpaced the overall pace; the year-to-date growth in residents’ income outstripped GDP growth, with rural income rising faster than urban income, indicating strong consumer potential.
“In retrospect, while the data change—old elements fade—the new is gradually being nurtured and developed. Much like a child growing stronger, our economy requires time and space to gain more robust strength,” Yang noted, casting an optimistic light on future economic trends. Ignoring the emerging momentum behind the data could lead to a missed opportunity for deeper understanding.
Stepping beyond the confines of mere economic data showcases Guangdong’s economy blossoming under pressure. Perhaps, in hindsight, we might regard today’s figures as ordinary, illuminating the simple progress along the journey. As we look ahead, now is the moment to harness our energy while remaining calm, yet confident in our potential for recovery and growth.
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