The Covid-19 pandemic has highlighted economic divisions among 31 provincial-level jurisdictions in China, where the southern provinces have shown a strong first-quarter rebound while northern regions struggled to recover.
The regional imbalance, together with the uneven recovery in the service sector and among small businesses, could pose a threat to Beijing's "dual circulation" strategy, which seeks to reduce the nation's reliance on exports and rely more on its huge domestic market to power future expansion, South China Morning Post (SCMP) reported citing analysts.The central province of Hubei displayed the strongest growth rebound in the first quarter, up by 58.3 per cent from last year, despite being the original epicentre of the coronavirus.
The provinces showing the next fastest growth rates were all in the southern part of the country: 19.8 per cent in Hainan, 19.5 per cent in Zhejiang, 19.2 per cent in Jiangsu and 18.6 per cent in Guangdong.
In comparison, China's three northeastern rust belt provinces, which were once known as the centre of the industry, are now struggling to keep up with the south, reporting below-average growth over the two year period, SCMP reported.
All three northeastern provinces accounted for only 4.5 per cent of China's overall GDP in the first quarter of this year, down from 5.0 per cent last year.
Tianjin, while still being China's third most populous city, has dropped off the list of the country's top 10 largest city economies, with its GDP level falling below Wuhan in the first three months of the year.
Meanwhile, the Xinjiang province, which is notorious for forced labour and human rights violations against the Uyghur Muslims and other ethnic minorities, saw a rise of 12.1 per cent in its economy between January and March.Yu Chunhai, deputy dean of Renmin University's school of economics, said that the divergence between northern and southern parts of the country is likely to widen further as coastal provinces continue to benefit from strong exports this year, while debt-ridden northern regions are slowing investment amid the central government's debt reduction campaign, SCMP reported.
Earlier this year, the National Bureau of Statistics showed that China had recorded the lowest economic growth in four decades as it grew by 2.3 per cent.
The statistics bureau cited that the reason behind a slow economic growth was due to the coronavirus pandemic. SCMP reported that the country's growth rate last year was the lowest since the nation's economy "shrank by" 1.6 per cent in 1976.