Industry: The Root Cause of Guangzhou’s Gradual Decline – Where Exactly Does It Lie?
Let’s start with industry. Industry is the backbone of a city’s economy, but today, Guangzhou’s industrial sector appears outdated and sluggish. The value-added output of Guangzhou’s industries above a designated size has declined by 0.8% year-on-year, making it the only first-tier city to experience a drop. In contrast, Shenzhen grew by 12%, Dongguan by 10%, and even Huizhou—a city many overlook—achieved 9.2% growth.
As the saying goes, “A train runs fast when led by a strong engine,” and industry is precisely that engine in the economic structure. For Guangzhou, automobile manufacturing has long been the driving force within its industrial sector. Historically, Guangzhou dominated automobile production in the province, with the industry once accounting for half of the city’s total industrial output. Even now, it still makes up 30%.
Yet, this very sector is now in trouble. As the former “Top Auto City,” Guangzhou saw a 16.4% decline in the value-added output of its automobile manufacturing in the first half of the year. More alarming is the 20% drop in car production, with output falling to 940,000 units. Even GAC Aion, once a leader in new energy vehicles (NEVs), saw production shrink by 35%. Traditional powerhouses like GAC Honda and GAC Toyota also suffered, with output plunging by 42% and 26%, respectively.
By comparison, Chongqing has surged ahead, overtaking Guangzhou with 1 million units produced—a 16% growth rate—while its NEV output skyrocketed by 150% in the first half of the year. To put it bluntly, Guangzhou hasn’t just been overtaken; it has been left far behind.
Faced with these challenges, Guangzhou has not been idle. Investments in electronics manufacturing and auto parts production rose by 36% and 61%, respectively, in the first half of the year. The city is trying to reverse the trend through increased investment, but whether this will work remains uncertain. The road ahead is long and arduous.
