China is no stranger to dizzying GDP growth. But even by its standards, the 18.3% economic expansion logged during the first quarter was a record. The boom came on the back of 31 provinces or municipalities posting double-digit growth, of which eight powered ahead at a far faster rate than the national average.
Leading the pack was Hubei, which saw its GDP jump 58.3% on the year to Rmb987.2 billion ($152.5 billion). Home to the city of Wuhan, the ground zero of the coronavirus pandemic, the central province was the hardest hit in the first quarter of 2020, with its provincial capital of 11 million citizens sealed off for 76 days (see WiC480). The lockdown – which created a low-base effect by calling a halt to almost all economic activity – partly explains the phenomenal year-on-year percentage leap. By the end of 2020, Hubei’s economy had already recovered to 95% of its pre-pandemic level, thanks to support from the central government, a slew of stimulus measures and the strong economic fundamentals of Wuhan. The momentum continued through the first quarter, where investment in infrastructure, manufacturing and real estate all nearly tripled (at least 4,800 construction projects were initiated across the province, each worth above Rmb100 million). Hubei’s foreign trade also reached a record Rmb117.4 billion, up 88% from a year ago, the second highest rate among all regions in China.
With Wuhan a key high-tech industrial centre and logistics hub, Hubei is hoping to achieve an overall 10% growth in GDP and 15% in retail sales for the full year.
Hainan in the south, which saw its GDP expand by 19.8% in the first three months, was another growth engine. Helped by Beijing’s plan to turn the resort island into a free trade port, Hainan attracted a fourfold increase in foreign investment in the first quarter, as 419 companies from 66 jurisdictions set up offices in the province. New initiatives to boost Hainan’s appeal as a luxury shopping destination – such as increasing tax-free shopping allowances for domestic tourists – also spurred to a fivefold jump in its duty-free sales to Rmb15.39 billion in the first three months. Similar to Hubei, Hainan is targeting a 10% GDP growth rate this year.
In absolute terms, Guangdong remains the largest regional economy with its GDP surpassing Rmb2.7 trillion in the first quarter.
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