China’s regional gap is worsening | The Economist

China's regional gap is worsening

While entrepreneurship flourishes in the south, a rust-belt malaise deepens in the north

“DON'T INVEST beyond Shanhaiguan” is a popular quip in China, referring to a pass in the Great Wall that leads to the north-eastern rust belt. Online pundits have updated the maxim to “don't invest outside the Southern Song”, a dynasty that fell almost 750 years ago whose territory was roughly the same as China's southern half today. The joke has a nub of truth: China's southern provinces are outperforming the north in nearly every economic dimension.

Figures released on January 18th showed that China's GDP grew by 2.3% in 2020. The recovery was unbalanced, with factories at full throttle but consumption subdued. That should improve after the pandemic ends. The north-south imbalance, though, is likely to outlast it.

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