Wealth of Chinese Provinces Rival Developed Countries

From NetEase:

Wealth of Many Chinese Provinces Could Rival Countries: GDP of Henan Province Ranks No.5 in China, No.24 in the World

There has been a saying: if California were a country instead of a state in the US, it would be the 8th largest economy in the world. Nowadays, if the GDP of Chinese provinces in recent years were compared to other countries in the world, you’ll find that the wealth of many Chinese provinces can also rival those of a country.

This China Business News journalist recently compared the GDP of China’s various provinces in 2012 with that of other countries in the same period, and found that Henan province, which is ranked 5th in China, ranks 24th in the world, while Guangdong, which is ranked 1st in China and whose GDP is predicted to top 1 trillion dollars for the first time in 2013, takes 16th place worldwide.

Don’t rush to be optimistic: behind the inspiring numbers still lies a current situation of a developing model in urgent need of changes. Many experts interviewed by this newspaper’s journalist expressed that though the overall amount of economic output has risen, the quality and effectiveness of economic growth both still need improvement.

Where large Chinese provinces fit in the world

Many of China’s major provincial economies can also also occupy important roles in the world.

According to 2012 GDP rankings, the top 5 provinces in our country are Guangdong, Jiangsu, Shandong, Zhejiang and Henan. If placed on the global chart, the rankings of the above-mentioned provinces would roughly be No.16, No.17, No.19, No.24 and No.28.

Guangdong’s Development and Reform Commission recently announced that it estimates an 8.5% increase for the 2013 GDP of Guangdong, making Guangdong the first province in China to exceed a GDP of 6 trillion yuan, namely 1 trillion USD.

However, there were already signs of this kind of “rivaling a country” situation long ago. The GDP of Guangdong, Jiangsu, Shandong and some other provinces had already surpassed that of some developed countries in 2009. Even the GDP of Tianjin, which ranked 10th in China that year, exceeded the 4 countries of Slovak, Luxemburg, Slovenia and Iceland.

Many people have noticed the special situation in China, especially businessmen. An entrepreneur wrote in his blog, early in 1997 he began noticing that the population and economy of many Chinese provinces surpassed that of other Asian, African and Middle Eastern countries. In his opinion, when operating in the Chinese market, every Chinese province should be treated as seriously as an independent country.

However, can Chinese provinces truly rival countries? Multiple experts interviewed by this China Business News journalist all say that in addition to factoring in exchange rates, the difference in GDP per capita between Chinese provinces and the world cannot be ignored. Furthermore, China’s current industrial is remains not ideal, with the task of transforming the economic developing model imminent.

A developing model without negative after-effects

“The total amount has gone up, but it only looks good,” says Chen Hongyu, government counselor of Guangdong province, to this paper.

“There exist a lot of flaws in our current development model, giving rise to lots of problems. For example, excess capacity, local government debt, environmental problems, and so on.” Chen Hongyu is blunt: the top 5 provinces should suffer from a considerable amount of local debt, and how they can smoothly transform into a development model without negative after-effects is extremely crucial. Among the 5 provinces, the problems each faces are not quite the same, either.

Chen Hongyu says, northern and central provinces represented by Shandong and Henan enjoy an abundance of mineral resources and relatively developed infrastructure, while Guangdong, Jiangsu, Zhejiang and other coastal provinces depend more on foreign investment. There is also one thing in common between Guangdong and Jiangsu: imbalanced regional development. “The key is to carry out innovation and change according to the advantages and disadvantages of each province instead of simply comparing GDP.”

Chinese Academy of Social Sciences industrial and regional economy expert Chen Yao says to this China Business News journalist that the 5 provinces are still manufacturing provinces in general, the proportion of second industry all 45% or above, mainly relying on high inputs and large industrial projects to boost their economic growth, and have only just started transforming towards a service industry in recent years.

To compare Guangdong and South Korea as an example, both of which have a similar amount of GDP, the permanent residents in Guangdong in 2012 was 105 million, almost two times that of South Korea, so the gap is still quite distinct when it comes to GDP per capita. In 2012 the GDP per capita in Guangdong was 8931 USD, while in South Korea it was 22590 USD.

From the perspective of stage of economic development, Guangdong lies in the late stages of industrialization while South Korea has stepped into a post-industrial society. In the opinion of Chen Yao, what’s most salient about South Korea is its industrial competitiveness generated by innovation. South Korea has some worldwide renowned large companies, sufficient internal impetus and high competitiveness in the global market, which is precisely what China lacks.

Comments on NetEase:

指那拆那:

So long as [the problems of] “cannot afford to live” and “cannot afford to fall ill” are not solved, no matter how high the GDP is, it’s just bullshit!

我用脚投票:

When our GDP reaches World No.1, will the elderly living in wells then be able to live above ground? Will our children then be able to take school buses as good as those in Macedonia? Afford to buy alarm clocks so they don’t need to get up in the middle of the night to walk to school?

网易河北省邢台市网友:

What a joke! If we’re so obscenely rich, why do people still need to live under manhole covers!

特殊网友管理局局长:

Dare you calculate [GDP] per capita? Shameless!

改过迁善:

The price of one Beijing, Shanghai, or Guangzhou apartment of yours with 70-year property rights is equal to 5 villas [single-family houses] with permanent property rights in the US, and this is your so-called “rivaling a country”!

Comments on Sina:

手机用户[上海]:

No.1 in the world for number of corrupt officials.

手机用户[陕西西安]:

Then what rank is the people’s quality of life?

手机用户[河南郑州]:

Who’s been made rich? The ordinary common people all know clearly in their hearts! You can imagine what a state/government that has lost the heart of the people will look like.

手机用户[黑龙江哈尔滨]:

Basically boosted by the appreciation of real estate.

手机用户[河南洛阳]:

Are the incomes of the people ranked the same?

中国木材网-木材行业权威网站 [广东东莞]:

Am I allowed to say something? In China, GDP is absolutely nothing!!

明前老茶[江苏连云港]:

What’s behind this “GDP rivaling a country”? 1. Who knows how much of it was fabricated by local officials?! 2. Even if it is true, have the people’s lives actually enjoyed happiness?!

手机用户[上海]:

The officials live better than their western counterparts, the people live worse than Africans!

天羽成焰_1ue[广西百色]:

The Chinese [always] make irresponsible remarks – you know what kind of life the Africans lead?

手机用户[陕西西安]:

Worse than Africans? Don’t speak without thinking. Even slandering should have its limit. Go live two years in any African country except South Africa and [China] becomes heaven when you come back. Or visit neighboring Nepal and you’ll instantly become a local tycoon. The moment we talk about per capita, you compare with Europe and the US; The moment we talk about income, you compare to housing prices in Beijing, Shanghai and Guangzhou, as if you all lived there, as if there were only Europe and the US besides China. Nonsense.

手机用户[广东深圳]:

The country’s rich, the officials are rich, the businessmen are rich, only the people are not. What’s the point of continuing to develop?