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Think Tank Report Points to Widened North-South Gap

On September 8, the Academy of National Development and Strategy at Renmin University of China (RUC), RUC’s School of Economics, and China Chengxin Credit Ratings, jointly issued a special report on China’s macro economy. The report states that the gap between economic development in the north and in the south of China continues to widen and has “reached a point that cannot be ignored.”

The report mentions three areas of imbalance: manufacturing, investment, and R&D and innovation.

The secondary (manufacturing) industry in the North has been stagnant over the past decade. The years between 2012 and 2020 saw zero nominal growth of that sector in northern China.

Although southern China’s consumption, investment and import and export growth are all higher than in Northern China, the main issue is investment. By 2017, investments in the North had plateaued. The gap in exports between the two regions is alarming. At present, 80 percent of the country’s exports come from the South, and the North accounts for only 20 percent.

The North also lags behind in R&D and innovation. A decade ago, the R&D funding, manpower and number of projects in the South was about twice as much as in the North. Now the gap has enlarged so it is about 3 or 4 times as much.

Over the past 10 years, southern China has registered a speedier industrial development. Twenty years ago, the number of large size industrial enterprises in the South was 1.56 times as much as the number in the northern region. Now the difference has widened to 2.65 times as much.

Source: Central News Agency, September 10, 2021