In 2021, China’s regional economic landscape was fraught with uncertainty.

Recently, the National Bureau of Statistics announced that China’s GDP growth for 2021 was 8.1%, with a total GDP of 114 trillion yuan. Subsequently, various provinces and cities released their 2021 economic performance reports one after another. In the competition among cities, standing still means falling behind. Looking around, how have regional economies achieved “steady progress”? Which provinces and cities have seen a strong economic rebound?

(Jilin and Tibet have not yet released their figures; all data is estimated)

The Big Four: A Tight Race

Guangdong vs. Jiangsu

Despite Jiangsu’s relentless pursuit, Guangdong remained firmly in the top spot as China’s leading province by GDP in 2021. In 2021, Guangdong’s GDP reached 12.4 trillion yuan, an 8% year-on-year increase, making it the first province in China to surpass the 12 trillion yuan mark. What does 12 trillion yuan signify? It represents a level of wealth rivaling that of a nation. According to forecasts, Guangdong’s GDP is likely to surpass South Korea’s, effectively placing it among the world’s top ten economies. However, Jiangsu edged out Guangdong to claim the title of the province with the largest GDP growth, with an actual growth rate of 8.6%—higher than Guangdong’s. This indicates that, amid numerous uncertainties, the rivalry between Guangdong and Jiangsu is far from decided. It is worth noting that with Dongguan becoming a trillion-yuan city, the “Guangdong powerhouse” now boasts four such cities: Shenzhen, Guangzhou, Foshan, and Dongguan. With this, Guangdong has caught up with Jiangsu in the number of trillion-yuan cities it possesses. Meanwhile, “Big Brother Jiangsu” already had four such cities in 2020: Suzhou, Nanjing, Wuxi, and Nantong. In this race of catch-up and overtaking, the economic rivalry between the top economic province, “Big Brother Guangdong,” and the second-largest economic province, “Big Brother Jiangsu,” continues…

"Lu Dazhuang" vs. "Zhe Laoban"

Apart from Guangdong and Jiangsu, Shandong and Zhejiang have consistently held third and fourth place, respectively, and are steadily narrowing the economic gap. Shandong’s GDP reached 8.3 trillion yuan in 2021, an 8.3% year-on-year increase. Zhejiang also reported positive news, with its GDP reaching 7.35 trillion yuan, an 8.5% year-on-year increase. Data shows that Shandong currently leads Zhejiang by 950 billion yuan, though in terms of growth rate, Zhejiang holds a slight edge. Of course, this makes sense: as a “rising star,” Shandong has resolutely pursued industrial restructuring and is ambitiously moving forward according to its plans. From the transition of growth drivers to the cultivation of high-tech enterprises, it has set numerous historical records. In early 2021, Shandong set a “modest target” of 17,000 new high-tech enterprises; by year-end, it had surpassed 20,000. In terms of the number of “single-champion” demonstration enterprises in manufacturing, Shandong currently has 109 such enterprises, far exceeding Zhejiang (91) and Jiangsu (57), ranking first nationwide. Thus, although Shandong was a latecomer, it is not too late. With leaders ahead and competitors closing in, Zhejiang can be described as the “former champion,” boasting the highest growth rate among the top four provinces in industrial output above designated size and maintaining double-digit growth throughout the year.It is not hard to imagine that this is driven by the digital economy. Within Zhejiang’s industrial enterprises above designated size, the added value of core digital economy manufacturing, equipment manufacturing, strategic emerging industries, artificial intelligence, and high-tech manufacturing grew by 20.0%, 17.6%, 17.0%, 16.8%, and 17.1%, respectively. These growth rates were all faster than the previous year and far exceeded the growth of all industrial enterprises above designated size, significantly boosting the growth rate of industrial production. However, it remains difficult to predict whether “Zhejiang’s business leaders” will successfully overtake “Shandong’s industrial giants.” After all, both sides are continuously adjusting and optimizing their industrial structures, maintaining a strong momentum of catch-up.

Breaking the 4 Trillion Mark: Each Has Its Own Strengths

Shanghai vs. Beijing

In 2021, China welcomed two cities whose GDP exceeded 4 trillion yuan: Shanghai and Beijing. Recent data indicates that the GDP gap between Beijing and Shanghai is gradually narrowing. A decade ago, Beijing’s GDP accounted for approximately 82.22% of Shanghai’s. After more than a decade of development, Beijing’s GDP has been steadily catching up to Shanghai’s, with its share now increasing by more than 10 percentage points—and it took only three years to surpass the 4 trillion yuan mark.

But why, despite Beijing’s rapid progress, has it still fallen out of the top ten in GDP rankings? The primary reason lies in the inherent gap between Beijing and its surrounding regions, as well as the lack of complementarity among cities, which has constrained interaction between the two areas. Beijing’s high-end resources, industries, and demand struggle to take root in neighboring regions, leading to a pronounced tendency to seek opportunities far away rather than close by. Consequently, advanced cities in the south have instead become the destinations where Beijing’s high-end functions are radiating and taking root. Of course, Shanghai’s surpassing of the 4 trillion yuan mark is not surprising, but the driver of its economic growth is not the financial sector, but rather manufacturing. In 2021, Shanghai’s major industrial sectors all achieved positive growth, with the machinery, automotive, and light industry sectors becoming the main pillars of the city’s total industrial output value. Today, Shanghai focuses not on who has the highest GDP, but rather on economic density and the structural distribution of different industries and enterprises.For instance, indicators such as output per mu, input-output efficiency, and R&D allocation better reflect the quality and efficiency of development than total volume or scale. Therefore, in pursuing high-quality development, Shanghai must continuously improve resource allocation, enhance its capabilities, and reform institutional mechanisms—which will lead to dual improvements in production efficiency and technological progress. Over time, Shanghai’s total factor productivity will be unleashed, thereby achieving both quantitative and qualitative growth.

Unexpectedly, Reaching New Heights

In the past, the prevailing narrative was that resources, policies, and population were all flowing southward, and the economic gap between the north and south had reached a point that could no longer be ignored. Whenever economic data was released, topics such as “Is the North still doing well?”, “The Hopeless North,” and “China Enters the Era of the South” would flood major news platforms one after another. The shift of the economic center of gravity to the south did not occur over the span of a decade or so. Rather, following the reform and opening-up, China’s primary economic driver was export-oriented foreign trade, with the Yangtze River Delta and Pearl River Delta emerging as the biggest beneficiaries.Over time, industrial chains were first integrated into the Chinese economy through Guangdong and Shanghai, forming a model characterized by “both ends outside, large-scale import and export”—meaning raw materials and orders came from abroad, while production and processing took place in coastal regions. As the South developed, the Northern economy began to lag behind. However, this was not the root cause; the real problem was that the North lagged behind the South in opening up. In 2008, eastern coastal cities began transitioning from old to new growth drivers, implementing strategies to “make room for new industries,” and upgrading their industrial structures. Many cities gradually found their advantageous positions within the global supply chain. The North, however, failed to make any significant “follow-up” moves and did not promptly identify suitable industries to develop, leading to a mass exodus of people and resources to the South. This time, however, the situation has been surprising: in 2021, the North has indeed made significant progress. Shanxi’s GDP reached 2.26 trillion yuan, with a real growth rate of 9.1% and a nominal growth rate as high as 28%. Not only did it lead the nation by a wide margin, but it also surpassed Guizhou, returning to the ranks of the top 20 provinces. As the impact of the pandemic subsided, coupled with a series of policy incentives, Hubei returned to a high-growth trajectory, with its real GDP growth rate ranking first nationwide in 2021. In recent years, Shandong has broken through its “stagnation” through continuous reforms. Leveraging its own strengths and boarding the “train” of coordinated development in the Beijing-Tianjin-Hebei region, it has absorbed a significant amount of production capacity from Beijing. In addition, the arrival of BOE has opened new doors for Shandong’s industrial development. It is evident that Shandong, which was the first to engage in self-reflection, will become a model for the transformation of northern cities.

Conclusion

After decades of development, the “Big Four”—Guangdong, Jiangsu, Shandong, and Zhejiang—remain at the forefront, while Fujian, Hunan, Anhui, and Hebei have caught up from behind. In the future, only those who can establish a stronger presence in high-tech industries and demonstrate greater resilience during economic cycles will secure an unassailable position.