Past performance is not indicative of future results. With the release of national first-quarter GDP figures, provinces and cities across the country have begun issuing their “first-quarter reports.” Under the dual pressures of the international situation and the resurgence of the pandemic—adding insult to injury—it would be unreasonable to focus solely on GDP. In the past, when discussing GDP, the emphasis was on “quantity” or “scale.” Now, however, the focus has shifted to “economic density,” placing greater importance on “quality.”
(Data for some regions has not yet been released.) Therefore, economic growth has two dimensions: the accumulation of production factors and the improvement of total factor productivity. Ultimately, however, it boils down to the issue of resource allocation. Fixed resources such as land supply and infrastructure must align with population migration patterns, and investment must be guided by comparative advantage. Only by promoting balanced development in this way can economic growth be achieved.
The Big Four Lead the Charge
Jiangxi Posts the Most Impressive Growth Rate
In terms of total volume, Guangdong, Jiangsu, Shandong, and Zhejiang firmly hold their positions as the nation’s “Big Four.” As the long-standing top four in national GDP, the competition among Guangdong, Jiangsu, Shandong, and Zhejiang is becoming increasingly intense. Jiangsu has ranked first in growth rate among the top four for two consecutive years, which means it has further narrowed the gap with Guangdong and widened the gap with Shandong. Turning to Beijing and Shanghai, their GDPs differed by only 300 billion yuan last year. However, as Shanghai was hampered by the pandemic, bringing the city’s economic activities to a standstill, Beijing is highly likely to surpass Shanghai this year. Analysis shows that the accelerated growth of new drivers is one of the defining features of Beijing’s first-quarter economy, primarily reflected in high-tech industries, the digital economy, and corporate R&D innovation. In terms of growth rates during the first quarter, provinces such as Jiangxi, Fujian, Hubei, Guizhou, Shanxi, Hunan, and Hainan performed notably well. Among them, Jiangxi achieved a growth rate of 6.9%, currently leading the pack among all provinces. Jiangxi’s top ranking comes as no surprise. In particular, industrial investment has had a significant driving effect on Jiangxi’s growth.In the first quarter, the growth rate of industrial added value for enterprises above designated size in the province exceeded the national average by 3 percentage points, demonstrating a trend of recovery-driven growth. However, among the six provinces in Central China, Jiangxi’s overall economic strength remains relatively weak. The top four provinces in the region all surpassed the 1 trillion yuan mark in the first quarter. Therefore, the task of “comparing, catching up, and surpassing” is quite arduous.
Letting Go of the Burden of Numbers
Tianjin Climbs the Hill and Clears the Hurdle
Judging by the data, Tianjin has underperformed the national average and has hit rock bottom. According to figures released by the Tianjin Bureau of Statistics, the direct causes of its GDP slowdown were the decline in the secondary sector and the stagnation of the tertiary sector. In the first quarter, Tianjin’s primary sector value-added reached 2.543 billion yuan, up 4.5% year-on-year; the secondary sector’s value-added stood at 126.081 billion yuan, down 2.2% year-on-year;while the value added of the tertiary sector was 225.228 billion yuan, up 1.1% year-on-year. Primarily due to the impact of the pandemic, the secondary and tertiary sectors struggled to sustain growth. Within Tianjin’s economic contribution, the secondary sector accounts for 37.3%, and the tertiary sector for 61.3%, with the two sectors combined contributing a staggering 99%.
As the second-largest economic hub in northern China, Tianjin’s delivery of such results has likely left many feeling somewhat disappointed. Furthermore, in 2021, Tianjin’s permanent resident population stood at 13.73 million, a decrease of 136,000 from 2020—could this mean it is on the verge of becoming a “ghost town”? In fact, this is not the case—please stop doubting Tianjin. The slowdown in growth can be attributed to two factors: First, the phasing out of a number of outdated industries, guided by the principle that “there is no gain without sacrifice.” The process of “sacrifice” is inevitably accompanied by growing pains, and the closure of enterprises will certainly have an impact on overall economic growth. However, behind this lies Tianjin’s proactive effort to “cut out the rot”—a shift from focusing on “whether we have it and how much we have” to “how good it is and whether it is superior.” Second, absorbing “nutrients” takes time, and the city has yet to fully recover. The raw materials segment at the upstream end of Tianjin’s industrial chain accounts for too large a proportion, while high-value-added output from downstream extensions makes up a smaller share. Furthermore, the port faces intense competition from Qinhuangdao and Tangshan, caught in a cycle of homogenized competition. Standing at an economic inflection point, Tianjin must confront its own shortcomings, identify the crux of the problem and its root causes, and implement sweeping reforms to ensure sustainable development. High-speed growth does not necessarily equate to high-quality development. When it comes to attracting investment, pursuing mere “speed” and “volume” is not a long-term strategy; instead, the focus must shift to competing on quality, efficiency, structural optimization, and green development.
Boosting Total Factor Productivity
Injecting a "Quality-Over-Quantity" Stimulus
In terms of investment promotion, some localities have focused excessively on year-end performance metrics while neglecting factors such as the added value of corporate products and labor productivity. In some cases, there has even been a pursuit of “flashy” statistics, causing environmental protection to yield to production demands.
However, only by enhancing total factor productivity and unleashing the intrinsic vitality of economic development can we achieve high-quality economic growth. How can we improve total factor productivity? Currently, solutions must be sought through spatial adjustments. In terms of accumulating production factors, the focus should be on labor resources. Through measures such as household registration system reforms, we can promote the aggregation of talent across various industries, thereby extending the demographic dividend.As the saying goes, “A tree dies when it is moved; a person thrives when they move.” In land supply and allocation, we should adhere to the principle of “land follows people,” ensuring that land allocation aligns with the direction of population flow. This approach can alleviate the spatial mismatch between land resources and population mobility. When production factors follow the direction of population flow, productivity is significantly higher than when they are distributed evenly across different locations. As productivity increases, economic output per unit of land rises accordingly, thereby enhancing economic density. Therefore, GDP measures the total scale of a region’s economy. A city’s development pace should not be assessed solely by GDP; efficiency and quality must also be considered.
Conclusion
Against the backdrop of high-quality development, the notion that “size determines status” is being replaced by “economic density.” Therefore, increasing economic density is synonymous with pursuing high-quality development.
