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Lessons From A Zhejiang Rebound

Lessons From A Zhejiang Rebound by Ryan Rutkowski, Matthews Asia

Recently, China released its second quarter 2015 economic data showing GDP growth of only 7%. Although this points to faster growth than almost any other world economy, it also reflects a continued gradual slowdown in its pace of growth. Various local authorities also released accompanying regional data, which I found to be much more interesting. Why? China is still a country with large regional differences so the reality can be more nuanced than what is highlighted on a national level. What struck me the most from the regional data were the numbers coming out of the eastern coastal province of Zhejiang. In the first half of 2015, Zhejiang’s GDP reached a growth rate of 8.3%. This is the sixth consecutive quarter of accelerating GDP growth in contrast to the continued slowdown of the national average. Zhejiang’s growth rate is striking for a couple reasons. First, it is already one of the wealthiest provinces, ranking fifth in terms of per capita GDP. Therefore, growing above the national average is impressive considering one would expect a more developed province to be pushing down growth not pulling it up. Second, Zhejiang is one of only a few provinces in which GDP growth rates have rebounded—and...