Economy May 04

China's southwest reports strong recovery

Kunming's regional GDP in the first quarter of 2021 was 175.46 billion yuan, an increase of 8.2% over the first quarter of 2019

China's southwest reports strong recovery
People feed seagulls at Haigeng Dam in Kunming city in southwest China's Yunnan province. Photo: Imaginechina/AFP.

(ATF) Kunming, capital of Yunnan Province, is now the gateway to Tibet, Thailand, Vietnam, Myanmar, Laos and Southast. A dusty backwater for decades, the city is rapidly developing. The city's Bureau of Statistics' first-quarter report on the local economy said it continued to recover steadily, with main indicators showing the city made a good economic start to the year and achieved healthy growth.

The city's regional GDP in the first quarter of 2021 was 175.46 billion yuan, an increase of 8.2% over the first quarter of 2019. The added value of primary industry was 7.13 billion yuan, while added value of the secondary industry was 45.75 billion yuan; tertiary industry's value was put at 122.6 billion yuan, after an average increase of 6.1% over the past two years, while agricultural production remained stable

The total output value of agriculture, forestry, animal husbandry and fishery was 13.5 billion yuan, an increase of 7.2% at comparable prices. Agricultural output value increased by 11.7%, forestry output value rose by 4.5%, while animal husbandry output value was up by 2.4%, fishery output value decreased by 12.2%, and the output value of agriculture, forestry, animal husbandry and fishery and auxiliary activities increased by 8.0%. The output of fresh cut flowers was 1.83 billion branches, an increase of 6%, while output of vegetables was 795,200 tons, a rise of 6.3%.

Industrial production off to a good start

Added value of the city's industrial enterprises above designated size saw a two-year average growth rate of 3.6% in the first quarter. The value added by the mining industry increased by nearly 44%, the manufacturing industry increased by 12.9%, and the electricity, heat, gas and water production and supply industries increased by 31.8%.

Among the city's 38 major industries, 33 have maintained growth, with an industry growth rate of 86.8%. The added value of the city’s seven key industries increased by 13.5% year-on-year, with the tobacco industry up by 11.5%; the chemical raw materials and products manufacturing industry increased by 20%; the pharmaceutical manufacturing industry saw two-year average growth rate of 0.9%; the metallurgical industry has seen two-year average growth of 4.6%; the equipment manufacturing industry saw a two-year average growth rate of 5.7%; The heat production and supply industry had an average growth rate of 8.5% over the last two years. But petroleum, coal and other fuel processing industries fell by 18.6%, an average drop of 16.2% in two years.

Investment in fixed assets

The city's fixed asset investment (excluding rural households) saw two-year average growth of 2.7%. Investment in key areas grew rapidly, with industrial investment up by 52.7%, real estate investment by 35.4%, and infrastructure investment by 30.5%. Among key industries, investment in agriculture increased by 31.6%, investment in water conservancy increased by 48.7%, and investment in health increased by 41.4%; investment in transportation, education, and commerce fell by 4.2%, 12.2%, and 46.4%, respectively.

Accelerated social consumption

The city’s total retail sales of consumer goods was 73.42 billion yuan, with an average increase of 3.4% over two years. 

Among retail sales of commodities above designated size, Chinese and Western medicines increased by 7%, gold, silver and jewelry increased by 74.8%, communications equipment increased by 51%, automobiles increased by 53.8%, and petroleum and products increased by 22.5%. Online sales grew rapidly, and the sales of goods realized through public networks increased by 107.5%.

Revenue and expenditure improving

Kunming's general public budget revenue was 17.637 billion yuan, a year-on-year increase of 4.9%. Tax revenue was up 21% to 14.185 billion yuan, while non-tax revenue was down 32% to 3.45 billion yuan. Domestic value-added tax increased by 13.5%, corporate income tax decreased by 10%, urban maintenance and construction tax increased by 7.9%, and land value-added tax increased by 112%. The city's general public budget expenditure was 22.44 billion yuan, an increase of 4.9%. Of this, education expenditure increased by 8.5%, social security and employment expenditure increased by 5.8%, health expenditure decreased by 1%, and housing security expenditure increased by 13.6%.

Financial market is operating smoothly

The city’s financial institutions (including foreign investment) had 1.615 billion in RMB deposits, a decrease of 16.9 billion from the beginning of the year and a year-on-year increase of 2.7%. Household deposits were 631.2 billion yuan, an increase of 11.7%; non-financial corporate deposits were 499.67 billion yuan, a decrease of 6.5%. The city’s financial institutions (including foreign investment) had RMB 204.135 billion in loans, an increase of 66.557 billion or 10.5% over the beginning of the year. Among them, household loans were RMB 527.52 billion, an increase of 21.7%; loans to enterprises (institutions) were RMB 1,507.99 billion, an increase of 7.1%.

Rapid growth in foreign trade

The city's total import and export volume was 34.1 billion yuan, a year-on-year increase of 75.0%. Exports were 21.3 billion yuan, an increase of 506.6%; imports were 12.78 billion yuan, a decrease of 19.9%. And there were 30 newly approved foreign investment projects, 11 more than last year. The actual utilization of foreign capital was US$100 million, an increase of 0.6%.

Continuous improvement of development quality

The corporate situation has steadily recovered. From January to February, the city's total profit of industrial enterprises above designated size was just over 5 billion yuan, an increase of 51% year-on-year; the operating income margin was 6.1%, an increase of 0.8 percentage points year-on-year. Industrial emerging industries are growing well. In the first quarter, the added value of emerging industries above designated size increased by 27.9%, which drove the growth of regulated industries by 4.1 percentage points, accounting for 16.6% of the added value of regulated industries. Advanced equipment manufacturing increased by 36%, biomedicine was up by 19.4%, electronic information increased by 47%, and new materials increased by 19.6%. 

The quality of fiscal revenue is high, so people's livelihoods were protected, the economy is promoted, and fiscal policy more proactive. Tax revenue accounted for 80% of the city's general public budget revenue; people's livelihood expenditure accounted for 74.6% of public budget expenditure. Private investment increased by 47.6%, accounting for 59.7% of the city's investment, driving the city's growth by 25 percentage points.

In general, the city's economy has shown a steady recovery and continued improvement, and most industries have returned to their normal levels before the epidemic in 2019. However, there are many instabilities in the external environment, while longstanding structural contradictions are still prominent, and the foundation for the city's sustained and stable economic growth is not solid yet.

In the next stage, the city will follow the spirit of the Fifth Plenary Session of the 19th Central Committee of the Party as a guide, focus on attracting investment, industry cultivation, speeding up project construction, boosting the consumer market, continuing to consolidate the foundation for economic stability and improving the quality and efficiency of development. 

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