Li Yi / China Daily

Economic expansion of Western provinces outpaces coastal area

Economic growth in most parts of China slowed in the first quarter, with most inland regions slipping into the single-digit range.

As of Thursday, 26 provincial-level governments had released first-quarter GDP data, with 24 of those regions reporting a slowdown.

Growth in eastern regions generally slowed by 1 percentage point year-on-year, while in central and western regions growth generally dropped by more than 2 percentage points. The western regions continued to grow faster than their eastern counterparts.

Heilongjiang province in the northeast reported the largest deceleration. Its growth rate plunged from 9 percent a year earlier to 2.9 percent this past quarter - its slowest pace ever. The bleak situation in the province's petroleu m, chemical and equipment manufacturing industries, which are its core sectors, hit the local economy hard. Industrial output expanded just 3.5 percent.

Hebei province's growth was the second-slowest at 4.2 percent, compared with 9.1 percent a year earlier. The drive to curb overcapacity in the steel, cement and glass industries dealt a heavy blow to the economy.

Hebei's steel sector produces almost as much as all of Europe , so any slowdown in the industry has strongly negative implications for the provincial economy.

In western China, Gansu province reported the largest slowdown in GDP as its investment-led growth ebbed. Growth slowed to 7.9 percent, down 5 percentage points from a year earlier.

Similar conditions prevailed in Yunnan, Ningxia and Sichuan.

The only bright spot was the independent municipality of Chongqing. With GDP growth of 10.9 percent, it led the nation. It was one of just three provincial-level governments to report double-digit growth (the other two wereGuizhou province and the municipality of Tianjin ).

Chongqing's growth was driven by exports, mainly of vehicles and electronic products. Even as national trade value dropped 3.7 percent in the first quarter, Chongqing's combined imports and exports posted an impressive 82.3 percent expansion.

Analysts warned that the growth in interior region is still low-quality, and the general slowdown in this part of the country underscored the urgency of economic restructuring.

Commenting on Heilongjiang's poor performance, Da Zhigang, an economic researcher with the province's unit of the Chinese Academy of Social Sciences, said: "State-owned enterprises concentrate in the region, resulting in a less vibrant economy. The economic slowdown reflected the fact that its industrial structure remained backward and the shift of its growth model lagged behind" other areas.

Xiong Jianzhong, chief economist of Sichuan's statistics bureau, said compared with the eastern regions, the western regions have a smaller share of the service industries and are much more reliant on investment.

Although growth in eastern provinces also slowed in the first quarter, economists are more optimistic about the outlook in those areas, as their underlying economic structures are sound.

"The country in the future will attach more attention to how the coastal regions transform and upgrade their economies. Without the transformation of the coastal region's economy, there will be no transformation in the national economy," said Xu Lin, director of the Development Planning Office under the National Development and Reform Commission.