In recent years, the voices claiming that Guangzhou may fall into a second-tier city have been incessant. The latest data shows that Guangzhou’s GDP growth rate ranks at the bottom among the four major first-tier cities. As the capital of Guangdong Province, Guangzhou has experienced a significant decline in property prices, attracting widespread attention.
On July 27, the Guangzhou Municipal Bureau of Statistics revealed that in the first half of 2024, Guangzhou’s GDP (Gross Domestic Product) reached 1.43 trillion yuan, with a year-on-year growth of 2.5%.
During the same period, the national GDP grew by 5.0%, while Guangdong Province’s GDP increased by 3.9%. Guangzhou’s GDP growth rate lags behind the national and provincial levels, ranking at the bottom among the four major first-tier cities in the country. The GDP growth rates for Shanghai, Beijing, and Shenzhen were 4.8%, 5.4%, and 5.9% respectively in the first half of the year.
Due to the Communist Party’s tendency to fabricate data, their official GDP figures have always been questioned for their accuracy.
In terms of GDP size, Guangzhou ranks fifth among mainland cities. The top four are Shanghai, Beijing, Shenzhen, and Chongqing, indicating that Guangzhou has been surpassed by Chongqing.
Located at the forefront of “reform and opening-up,” Guangzhou has held the position of the country’s third-largest economic entity for 27 consecutive years since 1989, trailing only Shanghai and Beijing.
There is a saying online that goes, “Eight provinces (cities) support the whole country.” Among these eight provinces (cities), Guangdong has been the largest contributor. However, in the past decade, Guangzhou’s status among first-tier cities has frequently been questioned, with the risk of being surpassed by Hangzhou and Chongqing. Economically, Guangzhou cannot compete with Beijing, Shanghai, and Shenzhen. Especially when compared to Shenzhen, the gap between Guangzhou and Shenzhen in terms of GDP and industrial added value has been widening year by year. In 2016, Shenzhen’s GDP exceeded Guangzhou’s for the first time, and its lead has been expanding annually, pushing Guangzhou down to the fourth position.
In recent years, Guangzhou has been facing increasing challenges from Chongqing in the competition for the title of “Fourth City in GDP.” In 2021, Guangzhou’s total GDP was 2.82 trillion yuan, while the top three cities, Shanghai, Beijing, and Shenzhen, had GDPs of 4.32 trillion, 4.03 trillion, and 3.07 trillion yuan respectively. That year, Chongqing’s GDP was 2.79 trillion yuan, with just a 300 billion yuan gap compared to Guangzhou.
When compared longitudinally, Guangzhou’s GDP growth rate for the first half of the year decreased by 2.2 and 1.1 percentage points compared to the same period in 2023 and the first quarter of 2024, respectively.
The mainland real estate market entered a downturn in the second half of 2021, gradually showing negative effects on the economy. Data released by the Guangdong Provincial Bureau of Statistics on July 23 showed that in the first half of 2024, the province’s fixed asset investment decreased by 1.5% year-on-year, with real estate investment dropping by 16.8%.
According to the statistics released by the Communist Party’s Bureau of Statistics, in May, the prices of second-hand houses in all 70 cities nationwide experienced a downturn, with Guangzhou performing the worst among first-tier cities. The prices of new homes have been falling for 12 consecutive months, dropping by 8.3% annually, and the prices of second-hand homes have been declining for 13 months, with an annual decrease of 11.4%. Six cities nationwide experienced a drop of over 10%, with Guangzhou being the only first-tier city on that list.
Looking at the inventory of houses in Guangzhou, according to statistics from Guangzhou Central Research and Development Department, the total inventory of commercial housing in Guangzhou was 11.736 million square meters by the end of May, with the destocking cycle reaching over 23 months, setting a new record for the year.
The supply of new housing in Guangzhou surpasses the demand. The number of second-hand homes on the market in Guangzhou has reached nearly 200,000 units, a staggering amount.
Netizens comment that the Guangzhou authorities have already played all their cards with the recent policies in the housing market. Since the introduction of the new policies on May 17th, Guangzhou has been the most proactive city among all first-tier cities. With the exception of houses below 120 square meters in the central urban areas, all other restrictions have been completely lifted, and the down payment ratio has been reduced to the lowest level. The mortgage interest rates are among the lowest in the country.
Breaking down the industries, in the first half of the year, the value added of the primary industry in Guangzhou was 12.414 billion yuan, with a 0.1% year-on-year decrease. This marks the first decline in the value added of the primary industry in recent years and a 3.2 percentage point decrease from the first quarter.
The sharp decline in real estate investment has also dragged down the growth rate of fixed asset investment in Guangzhou. In the first half of the year, real estate development investment in Guangzhou dropped by 10.1%, while the sales area of commercial housing decreased by 13.3%. During the same period, the year-on-year growth rate of fixed asset investment in Guangzhou was 2.0%, lagging 2.3 percentage points behind the first quarter.
In the first half of the year, the value added of large-scale industries in Guangzhou decreased by 0.8% year-on-year. As one of the three major pillar industries, the automotive manufacturing industry continued to be under pressure, with its value added declining by 16.4%.
Due to factors such as weakened demand in the automotive and petroleum retail sectors and the sluggish market for renovation and decoration supplies related to real estate, the growth rate of the consumer goods market slowed down. The total retail sales of social consumer goods in Guangzhou in the first half of the year reached 560.155 billion yuan, remaining relatively stable compared to the previous year.
On social media, some netizens have expressed that they are not trying to belittle Guangzhou, but these objective data reflect the current situation in Guangzhou.