- Growth in Shandong, China’s third largest provincial economy, slowed in the first quarter due to cuts in inefficient industrial capacity
- Shandong government aims to cut capacity in traditional sectors to boost ‘new’ industries, as well as reduce pollution
“The quality of development is changing [in Shandong],” said Liu, who referred to the fact that Shandong’s industrial sectors dominate the economy and that 70 per cent of this heavy industry is in the chemicals sector. “As a result, our economic volume is large, but the quality of development is not very high.”
According to statistics from the Hong Kong Trade Development Council (HKTDC), Shandong’s industrial output has been dominated by heavy industry, which accounted for about 67.1 per cent of the gross industrial output in 2017. Within that, raw chemical materials and chemical products had the biggest share of all value-added industrial output, at 9.7 per cent, according to the HKTDC.
“This decline [in first quarter growth] was in exchange for our development of high-quality [production], because our traditional and backward production capacity has declined,” Liu added.
Shandong, the third largest provincial economy in China, will continue to reduce its reliance on chemicals production, while also cutting the use of coal for power, heating and fuelling heavy trucks for transport, all of which are major contributors to regional pollution, according to Gong Zheng, the governor of Shandong.
“We have stepped up our efforts [to cut pollution] and have refused to allow it to rebound, and we will do this well,” said Gong.
The central government launched a campaign to tackle pollution in 2014 as it sought to reverse the severe damage done to the environment after decades of breakneck industrial growth.
However, the rising costs of doing business in China – including higher wages and the costs of pollution control – have forced some manufacturing out of China. That process has been accelerated by firms searching for an alternative production base to avoid
implemented as part of the trade war, which has made a severe dent in China’s investor and consumer confidence.China’s GDP growth slid to 6.2 per cent in the second quarter, the lowest reading since records began in the first quarter of 1992, and below the levels reported during the global financial crisis, the National Bureau of Statistics said on Monday.
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