Jiangsu Poised to Pass Guangdong in GDP

Power Province: Jiangsu province has become the home of China's most promising future industries.

Guangdong province will be the first of China’s 31 provincial-level regions to post a 5-trillion yuan GDP in 2012. But its old-line export economy will soon be surpassed by the more advanced economy of Jiangsu province.

The provincial-level regions with the biggest economies during the first three quarters of 2011 were Guangdong with 3.69 trillion yuan ($586 bil.), Jiangsu with 3.51 trillion ($557 bil.) and Shandong with 3.3 trillion yuan ($524 billion). Two more provinces surpassed the 2 trillion yuan ($317 bil.) mark during that period.

Guangdong is projected to end the year with a GDP of 5 trillion yuan ($793 billion), according to Financial Daily while Jiangsu’s GDP will finish only slightly below that mark. The GDPs of 22 of China’s 31 provincial-level regions are expected to pass the trillion yuan ($158 billion) mark this year.

In recent years Jiangsu and Shandong have been closing the GDP gap with Guangdong. Jiangsu is expected to take the top spot within the next year or two because it hosts a higher concentration of emerging hi-tech industries while Guangdong is heavily dependent on fading low value-added industries like textiles, toys, housewares and low-tech industrial machinery.

The ascendance of coastal Jiangsu province over Guangdong province is a national milestone for China. Not only is Guangdong a far larger province — with a population of 104 mil. and an area of 68,700 square miles compared with Jiangsu’s 78.7 mil. and 39,600 sq-mis — but it has enjoyed the advantage of being adjacent to Hong Kong, China’s de facto commercial gateway since World War II. Jiangsu’s growth surge during the past decade reflects the rise of neighboring Shanghai to the role of China’s commercial center since liberalizing economic reforms were begun in 1978.

Jiangsu’s rise marks China’s shrugging off the last vestiges of the colonial era when Hong Kong served as a humiliating marker of both China’s subjugation by western powers and China’s continued dependence on western patronage as a primary source of economic stimulus.

Sichuan and Liaoning will be joining Zhejiang, Henan and Hebei at the 2 trillion yuan GDP level this year. Five more provinces and regions are expected to cross the 1 tril. yuan GDP mark, bringing the total from 17 to 22. These seven provinces have all enjoyed 12% growth in 2011. China’s national GDP grew a robust 9.4% in 2011 despite faltering demand from Europe and the US.