The economy of China's big 4 provinces: steady, vigorous, and already on par with Japan

[AndrewJin]

China's big four
Guangdong, Jiangsu, Shandong and Zhejiang


It's very hard to gauge China's economy at regional levels. China is simple big and diverse.

There are a couple of provinces with temporary difficulties, basically Northeast China and some provinces that mainly rely on heavy industry and mining, such as Shanxi Province, Hebei Province and Inner Mongolia.

There are also the underdeveloped Central China and Western China, both are 2 trillion dollars economy but with much higher than average growth. 2 trillion + 2 trillion seem big, but considering their population, the potential is still huge. (see China's interior: a 5 trillion dollars economy, the new spotlight )

Overall, the primary growth engine of Chinese economy is by large the big four provinces. The GDP of these big four all together is on par with Japan's GDP figure in 2015 (4 trillion US dollars). It's very stupid to say, they have reached some sort of maturity in terms of economic development. If we refer to the economic figures of H1 2016 and 2015, it's rational to say, their economies are steady, vigorous, and better than ever, especially in terms of high value-added industries and service sector. Nearly all emerging Chinese brands are more and less based on these big four (and of course with independent municipalities and numerous regional mega cities), including Huawei, BYD, Haier, Alibaba, DJI, Gree, CRRC, etc.

(mind that Q4 accounts for 1/3 of the entire year in China)

Having said that the GDP of big 4 provinces is on par with Japan, we must clearly understand that the big 4 has more than 330 million people (and on the rise) while the population of Japan is merely 126 million (and shrinking). But the big 4 provinces, as the economic model of China and the primary origin of innovation, should have bigger goals. The booming economy of the big 4 is also critical to the economy of China's interior. The economic tie between Central China's Hubei/Hunan Province and Guangdong Province is so tight that the high-speed railway services every 5-10 minutes on Wuhan-Changsha-Guangzhou HSR are always full of passengers.

As the host city of the upcoming G20 summit, Hangzhou, the capital city of Zhejiang Province (the smallest one of big 4, but with higher GDP per capita than Guangdong and Shandong) provides a perfect example of a high-tech oriented and internet-focused development, with holding the headquarter of Alibaba and numerous innovative companies.

There is a long way to go.
Keep working and never feel content.


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[AndrewJin]

1 Guangdong Province (capital Guangzhou City)
2 Jiangsu Province (capital Nanjing City)
3 Shandong Province (capital Jinan City)
4 Zhejiang Province (capital Hangzhou City

Made in the big 4

---------------------------

Rural Zhejiang Province
The natural side of the economic powerhouse

 

[Mangus Ortus Novem]

@AndrewJin now imagine, a jump into ten years into the future, the sum of economies of the western regions.

Great isn't it?

 

[AndrewJin]

@AndrewJin now imagine, a jump into ten years into the future, the sum of economies of the western regions.

Great isn't it?

That would be the topic of
https://defence.pk/threads/chinas-interior-a-5-trillion-dollars-economy-the-new-spotlight.441320/

 

[powastick]

@AndrewJin now imagine, a jump into ten years into the future, the sum of economies of the western regions.

Great isn't it?

He once mentioned his dream was, GDP of both Western China and Central China surpass Japan's GDP.

 

[Mangus Ortus Novem]

He once mentioned his dream was, GDP of both Western China and Central China surpass Japan's GDP.

Yes, he has practical dreams!

 

[Place Of Space]

Deng Xiao Ping's first goal has been achieved, a part of the nation get rich firstly. Now Xi Jinping need to finish Deng's second goal, the rich lead the poor to reach prosperous together.

 

[ahojunk]

He once mentioned his dream was, GDP of both Western China and Central China surpass Japan's GDP.

.
The GDP of Western China and Central China can double in size over the next 7 to 8 years.

When this happens, and assuming Japan is stagnating, these two regions will surpass Japan.

The OBOR is a game changer for Western and Central China, especially Xinjiang and Qinghai.

 

[AndrewJin]

.
The GDP of Western China and Central China can double in size over the next 7 to 8 years.

When this happens, and assuming Japan is stagnating, these two regions will surpass Japan.

The OBOR is a game changer for Western and Central China, especially Xinjiang and Qinghai.

One important corridor of OBOR
4243km long National Expressway G30 (Lianyungang–Khorgas)

Guozigou Bridge (part of G30 National Expressway)

Guozigou bridge is one of the most famous bridge in China, also the largest bridge ever built in central Asia. Located near western border with Kazakhstan, surrounded by numerous snow mountains.

@ahojunk
Ok ok, now, pls stick to the topic, the big four.
We can talk about China's interior in
China's interior: a 5 trillion dollars economy, the new spotlight

 

[AndrewJin]

5 China A-Shares Riding Rise of New Economy
Smaller stocks listed in Shanghai and Shenzhen offer smart ways to bet on China’s economic rebalancing.

China’s A-shares have earned a reputation as being risky after last year’s stock market rout, but it is stocks listed in Shanghai and Shenzhen that offer investors the best ways to cash in on the rebalancing of China’s economy towards consumption and services.

Hong Kong-listed H shares of China’s biggest companies have been a favored way of investing but these state-owned blue chips - like the big four banks – don’t offer the same growth opportunities as smaller stocks listed on the mainland’s two exchanges. “If I wanted to buy some of the non-internet technology names, for example, you can’t get that in Hong Kong - you’ve got to focus on Shenzhen,” Says EastSpring money manager Ken Wong. The same goes for consumer products, defense, agricultural and a broader set of health-care and pharma names. “If you really believe in China evolving, then you need to buy A-shares,” he adds.

While there was some disappointment that MSCI didn’t include Chinese A-shares in its emerging market indices, East Capital’s Francois Perrin isn’t sweating over MSCI’s snub. “China’s equity market remains mainly driven by domestic investors,” he says and is more focused on local policy decisions than what keeps foreign investors up at night. Perrin favors stocks like non-state owned companies in sectors like environmental protection. For that reason, he’s much more enthusiastic on the upcoming Shenzhen-Hong Kong Stock Connect, due to launch before the end of the year, which will give foreign investors better access to trade these kinds of names. “This launch will offer a pool of very interesting opportunities,” Perrin reckons.

Below, Barron’s Asia analyzes a handful of stocks that offer investors a way to invest in the rise of China’s new economy.

Jiangsu Hengrui Medicine (600276.CN): Hengrui specializes in cancer and surgical anesthesia drugs. The firm has strong research & development credentials with a healthy patent drug pipeline and growing overseas business. “Demand for Hengrui’s products will increase as a result of an ageing population,” says HSBC’s Alex Zhao. The company’s got a good track record of generating profit from shareholder equity and could post average earnings growth of 25% over the next couple of years.

Hengrui’s shares are flat this year against a fall of 14% in the Shanghai market where it’s listed. The stock looks pricey at 30 times forward earnings but analysts thinks Hengrui could be undervalued by about 30%.

Hangzhou Hikvision Digital Technology (002415.CN): The world’s second-biggest maker of high-tech surveillance equipment and services, Hikvision’s customers include the armed forces and police. The Shenzhen-listed company has a large global presence and gets about 30% of its sales from outside of China.

The shares can zoom higher on new product launches, potential foreign acquisitions, the emergence of ‘smart’ cities and incoming tax breaks. The company’s also got nifty R&D credentials and operates in a sector that in China is filled with smaller, inefficient competitors, where consolidation could entrench Hikvision’s role as market leader. Hikvision’s shares are down 5% this year versus a 12% fall in Shenzhen stocks overall.

Jonhon, or China-Aviation Optical Electric Tech (002179.CN), is another compelling play in the high-tech space. The firm supplies military and aerospace industries. Its shares are up 15% in 2016.

Qingdao Haier (600690.CN): White goods giant Haier has been hung out to dry of late as it battles slowing sales of appliances in China. Haier looks set for a reversal though after it snapped up General Electric’s home appliances unit earlier this year. That will give the firm a higher-end, higher margin portfolio of goods like refrigerators and AC units, while also bulking up its presence in overseas markets.

Despite the potential to add about 10% to its yearly earnings per share, the market’s not exactly embraced the deal. Shares in Haier have been lackluster since the GE acquisition was announced, but that looks like a buying window as the deal will bear fruit long-term. Haier also trades at a big discount to global peers at 11 times earnings, compared to Whirlpool Corp’s (WHR) 18 times.

Zhengzhou Yutong Bus (600066.CN): Tesla may grab all the headlines but Yutong is driving China’s own electric vehicle revolution. The company makes clean energy buses and is riding on efforts by policymakers to combat air pollution.

Earnings growth could be pedestrian over the next couple of years, but a 7.5% dividend yield based on the recent share price could keep investors onboard.

Yutong’s shares have fallen 8% this year mainly on anxieties over ongoing clean energy subsidies handed out to local governments. The company’s long-term prospects are good though, with analysts forecasting more than 25% upside over the next years. That sell-off has also brought the stock down to a compellingly cheap 11 times forward earnings.

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Some companies regular consumers probably will never hear of.
But they are indeed making the manufacturing powerhouse of East Asia-ASEAN stronger than ever.

Hikvision Darkfighter PTZ wins 'CCTV Product of the Year' in PSI Premier Awards 2016
July 20, 2016 Hikvision, the world’s leading supplier of innovative video surveillance products and solutions, is proud to be the winner of the CCTV Product of the Year 2016 category in the PSI Premier Awards for its range of Darkfighter range of PTZ cameras. The industry-leading ultra-low-light cameras provide crystal-clear color images down to as low as 0.002 lux, in black & white to 0.0002 lux and to 0 lux with IR – conditions that would defeat conventional low-light models.