The economic gap between China’s two most powerful provincial economies, Guangdong and Jiangsu, has narrowed to its smallest level in more than a decade, as a sharp decline in investment drags on the longtime front-runner, reports Caixin. In the first three quarters, Guangdong’s GDP grew 4.1% year-on-year to RMB 10.52 trillion ($1.5 trillion), while Jiangsu’s economy expanded 5.4% to RMB 10.28 trillion, according to local statistics bureaus. The resulting RMB 236.6 billion gap is the slimmest for the same period in at least 11 years.
Guangdong’s underperformance is largely due to a steep 14.1% drop in fixed-asset investment, the weakest reading for the same period in a decade. Jiangsu also saw a decline, but a more moderate one at 8.4%.
This divergence in investment is the decisive factor in Jiangsu closing the gap and reflects deeper structural challenges in Guangdong’s economy.