The industrial output of the Yangtze River Delta region, the most advanced manufacturing hub in China, showed accelerated recovery in the first half of 2017, and more investment has been rechanneled to the real economy.
Shanghai, East China’s Jiangsu Province and Zhejiang Province all saw their manufacturing sectors grow faster, the Xinhua News Agency reported on Sunday.
For example, the total output of real estate in Shanghai declined 17.5 percent year-on-year, which showed that the local economy is less dependent on the housing market, Tang Huihao, deputy bureau chief of the Shanghai Municipal Statistics Bureau, was quoted as saying.
Shanghai’s industrial output increased 7.3 percent year-on-year in the first six months, a sign of strong recovery in the sector.
Meanwhile, Jiangsu recorded its industrial output growth at 7.4 percent year-on-year, while Zhejiang saw a 7.7 percent year-on-year surge, driven by upgraded production lines that are equipped with automation, Xinhua noted.
“The recovery in manufacturing was mainly thanks to stronger-than-anticipated exports in recent months,” Xia Dan, an expert at the Bank of Communications, told the Global Times on Sunday.
In the first half of 2017, China’s total exports grew 15 percent year-on-year, to 7.21 trillion yuan ($1.1 trillion), showed data from the General Administration of Customs released July 13.
In the past few years, the sluggish trade outlook has driven more funds to the real estate sector, which was considered much more profitable than traditional industries, according to Xia.
“However, a more severe crackdown on the housing bubble since the beginning of this year has also limited financing tools for some companies,” she said.
In the Yangtze River Delta region, many companies are export-driven, exposing them to a sluggish global market, Yan Yuejin, research director at E-house China R&D Institute, told the Global Times on Sunday.
“When some companies felt financing pressures doing trade, they would find more profitable businesses including property projects,” he said, noting that the recent curb on funds entering the real estate sector will help stabilize the market.
The imbalance between the real estate sector and real economy is one major issue that China faces today, He Lifeng, director of the National Development and Reform Commission, was quoted as saying at the China Development Forum in March.
Measures to tackle the housing bubble included controlling loans flowing into the sector, he noted.