Summary of Key Points
Recently, the economic growth rate in Qujing, a regional sub-center city in Yunnan Province, has continued to decline. It not only falls below the provincial average but also faces issues with core indicators such as industry and investment performance. This is not unique to Qujing; many other regional sub-center cities across the country (such as Xiangyang in Hubei and Zunyi in Guizhou) have experienced slower growth than their respective provinces. These cities once served as key drivers of economic growth due to their reliance on specific industries (either resources or emerging sectors), but now they are facing development bottlenecks due to a lack of diversification in their industrial structures. They are seeking to enhance their resilience and pursue sustainable development through industrial transformation.
I. The Once-Lightning-Speed “Growth Stars”: Why Were Regional Sub-Center Cities So Popular?
During the 14th Five-Year Plan period, central and western provinces selected 20 regional sub-center cities with the aim of making them new economic drivers. In previous years, these cities were indeed very promising, with growth rates generally exceeding those of their provinces and provincial capitals:
- Qujing’s Highlight Moment: After being designated as Yunnan’s sub-center in 2022, Qujing achieved rapid growth thanks to three new industries: electrolytic aluminum, crystalline silicon photovoltaics, and new energy batteries. Its average annual growth rate during the 13th Five-Year Plan period was 8.8%, 3.1 percentage points higher than the national average, outperforming the province in key indicators such as industry and investment.
- Yulin’s Surge: Due to soaring coal prices in previous years, Yulin’s GDP increased by over 130 billion yuan, rising several places on the rankings and surpassing Luoyang to become the largest city in central and western China that is not a provincial capital.
The common factor among these cities was their ability to capitalize on industry trends (such as rising resource prices or emerging sector opportunities) to rapidly expand their economic scales.
II. The Current Growth Challenges: Slowing Growth Rates and Obvious Problems
This year, the growth rates of many sub-center cities have slowed down significantly:
- Qujing’s Dilemma: The first-quarter growth rate was only 1% (compared to 3% for the province as a whole), with the secondary industry declining by 6.1%, and the output value of large-scale industries dropping by 7.4%. In 2024, GDP is expected to grow by just 1%, and in 2025, it will only increase slightly (from 372.4 billion yuan to 377.8 billion yuan). Investment, consumption, and fiscal revenue have all decreased (fixed investment by 22.4%, retail sales by 1.3%, and local finances by 22.7%).
- Other Cities’ Situations: Similar trends are observed in Xiangyang (Hubei, 2.2%), Zunyi (Guizhou, 4.3%), and Nanchong (Sichuan, 3.3%), with all showing growth rates below the provincial averages.
In short, these once-growth-star cities are now struggling to maintain their momentum.
III. The Underlying Issues: Single-Industry Structures and Vulnerability to Economic Cycles
There are two main reasons for these dramatic fluctuations:
1. Overly Single Industrial Structures: Sub-center cities often rely on one or two industries for their economic vitality. For example, Qujing once relied heavily on coal and has recently shifted to new industries but still depends on a few key sectors; Yulin is almost entirely dependent on coal.
2. Industry Cycles: Both coal and renewable energy sectors are subject to market fluctuations. When prices are high or demand is strong, the cities’ economies thrive; when prices fall or competition intensifies, growth stalls.
In contrast to larger cities like Chengdu and Wuhan, which have diverse industries (automotive, electronics, finance), sub-center cities lack this diversity, making them more vulnerable to economic downturns.
IV. Solutions: Moving from a Single Focus to Diversified Economies for Greater Resilience
To address these issues, the key is to diversify industries:
- Qujing’s Plan: By 2030, non-tobacco and non-energy industries are aimed to account for 40% of the city’s industrial output, reducing reliance on tobacco and energy sources while developing more emerging sectors.
- Xiangyang’s Approach: The city is building a “3+4” industrial framework, focusing on automotive, chemicals, and agricultural product processing, along with new energy and high-end equipment. The goal is to double these industries’ size within five years, reducing dependence on any single sector.
The core strategy is to cultivate multiple growth drivers rather than betting on a single industry trend.
V. Lessons for Other Sub-Center Cities
The development of regional sub-center cities should not rely solely on short-term opportunities but also focus on building a strong foundation:
- Seize Opportunities Without Overreliance: Be ready to capitalize on emerging trends (such as new energy) without putting all eggs in one basket.
- Plan for Diversification Early: Start nurturing new industries when the market is favorable to avoid panic during downturns.
- Enhance Economic Resilience: Balance the industrial structure so that the economy can grow steadily even if certain sectors face challenges.
In summary, sub-center cities need to transition from short-term bursts of growth to long-term stability to truly become pillars of their regional economies.