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Source: Time Weekly Author: Li Yiwen

The seat in the second city in the central region has a new owner.

According to data released by the Zhengzhou Statistics Bureau recently, Zhengzhou's GDP in the first half of the year was 725.24 billion yuan, a year-on-year increase of 5.3% at constant prices. On the other hand, Changsha's GDP in the first half of the year was 717.021 billion yuan, a year-on-year increase of 4.5%.

In comparison, in the first half of 2024, Zhengzhou once again narrowly beat Changsha by a slight margin of 8.219 billion yuan. In the previous quarter, Zhengzhou also outperformed Changsha by 2.573 billion yuan. This is also the first time in the past 15 years that Zhengzhou's GDP has exceeded Changsha for two consecutive quarters.

However, unlike Wuhan's absolute advantage in the central region, Zhengzhou and Changsha have been competing for the second place in the central region. Although there are wins and losses, it is difficult to widen the gap. Facing the more severe competition in the second half of the year, can Zhengzhou continue to maintain its advantage and secure its position as the second city in the central region?

Changsha's growth rate has lagged behind for six consecutive quarters

It took Zhengzhou nearly 15 years to catch up with Changsha again.

Since 2009, when Changsha surpassed Zhengzhou by 44.476 billion yuan, Zhengzhou has embarked on a journey of catching up that lasted for more than a decade. During this period, Zhengzhou's GDP has always been "close to" Changsha, and the gap between the two places rarely exceeds 100 billion yuan. Occasionally, Zhengzhou can briefly take the lead, but the advantage has never lasted for more than a quarter. More often, Zhengzhou plays the role of a pursuer.

However, Zhengzhou's overtaking of Changsha this time is significantly different from the previous times. As early as the first quarter of this year, Zhengzhou outperformed Changsha by 2.573 billion yuan. After that, Zhengzhou did not lose its advantage, but continued to widen the gap. In the second quarter, Zhengzhou's economic lead over Changsha had expanded to 8.219 billion yuan.

It has surpassed Changsha for two consecutive quarters, which is unprecedented. This means that the long-standing "entanglement" between Zhengzhou and Changsha may reach a turning point. Zhengzhou's "counterattack" is largely the result of the "advance and retreat" of these two cities.

Calculated at constant prices, in the first half of this year, Zhengzhou's GDP grew by 5.3% year-on-year, 0.3 percentage points higher than the national average; during the same period, Changsha's GDP grew by 4.5%, 0.5 percentage points behind the national line and 0.8 percentage points behind Zhengzhou.

In the long run, since 2023, affected by changes in the domestic and international economic environment, Changsha's economic growth rate has slowed down from about 8% to around 4%, and has even been lower than the national line for six consecutive quarters. In contrast, Zhengzhou's economic growth rate has always been higher than the national average, maintaining a relatively considerable growth.

As the two cities advanced and retreated, the gap between them, which was originally in fierce competition, began to widen.

Affected by changes in the domestic and international economic environment, Changsha's economic and industrial growth rates have slowed down.

The competition between the two powers depends on industry. As one of the "ballast stones" of the economy, Changsha has always attached great importance to the development of the industrial sector. In 2019, the growth rate of Changsha's secondary industry added value remained at 8%, far higher than the national growth rate of 5.7%, while Zhengzhou's growth rate was 6.2% during the same period, 1.8 percentage points behind Changsha.

However, affected by the internal and external environment, the growth rate of Changsha's secondary industry added value has continued to decline since 2020. At the same time, Zhengzhou was able to quickly adjust and recover, and gradually strengthened. In the first half of 2024, Changsha led Zhengzhou in the added value of the primary and tertiary industries by more than 10 billion yuan, but Zhengzhou's secondary industry grew rapidly, with its added value growth rate reaching 9.8%, the highest in the same period in the past three years, 4 percentage points higher than Changsha, and leading Changsha by 30.795 billion yuan in one fell swoop.

In terms of the growth rate of industrial added value above designated size, the two cities also "changed their positions" after 2019. This year, the growth rate of industrial added value above designated size in Changsha continued the previous trend, reaching 9.1%, while that in Zhengzhou was 6.1% during the same period. However, in the first half of this year, the growth rate of industrial added value above designated size in Zhengzhou has reached 12.0%, while Changsha has fallen back to 7.4%, surpassed by Zhengzhou by 4.6 percentage points.

"This is related to the level of support the two cities have received," Zeng Gang, dean of the Institute of Urban Development at East China Normal University, told the Times Weekly reporter. Although Zhengzhou and Changsha are both strong provincial capital cities, Zhengzhou can obtain relatively more resources due to its more advantageous geographical location and the economic size of its provinces when the domestic and international environment changes.

This difference can be seen in the deployment of the automobile industry in the two places.

As the current "star industry", both Hunan and Henan provinces regard the automobile industry as one of the pillar industries of the future economy. However, in terms of industrial layout, Henan has clearly proposed to develop the complete vehicle industry with Zhengzhou as the center.BYDMajor vehicle manufacturing companies such as AG and AUO are also concentrated in Zhengzhou, and their automobile production accounts for more than 80% of the province.

Hunan is "in full bloom", with major automobile industries such as BYD, BAIC, and Geely located in Changsha, Zhuzhou, Xiangtan, etc. This has also contributed to Zhengzhou's catch-up in the automobile industry, especially the new energy automobile industry, to a certain extent.

In 2023, Changsha's vehicle production will reach 883,500 units, a year-on-year increase of 10.0%, of which new energy vehicles will reach 726,900 units, a year-on-year increase of 37.4%. According to Dingdian News, Zhengzhou's vehicle production during the same period was 830,000 units, a year-on-year increase of 61.7%, of which new energy vehicles reached 316,000 units, a 3.5-fold increase.

Although there is still a small gap in total volume with Changsha, Zhengzhou has become one of the biggest dark horses in the automotive industry with its "astonishing" growth rate.

In addition to industrial layout, Zhengzhou has also received more support for major projects that are more direct in boosting the economy and production.

According to local media reports in Henan, on the morning of July 11, the 13th "Three-Batch" project construction activity was held in Henan Province. During this activity, 754 projects were signed in the province with a total investment of 578.27 billion yuan. Among them, Zhengzhou added 87 "Batch" projects with a total investment of 129.421 billion yuan. Its projects accounted for 11.5% and its investment accounted for 22.4%. The projects were obviously "large in size and high in quality".

Leading advantage is expected to be maintained

After Zhengzhou surpasses Changsha in this round, can it continue to maintain its leading advantage?

In Zeng Gang's view, Zhengzhou and Changsha have similar economic and industrial structures, comparable industrial bases, and roughly the same development stages. The economic challenges and growth pressures faced by the two places are also generally the same.

"But Zhengzhou's current locational advantages are obviously better than Changsha's, and affected by the domestic and international economic environment, Changsha, which was once known for its consumption, is also facing problems such as how to break through the consumption bottleneck and further release consumption potential. Therefore, in the future, Zhengzhou may be expected to maintain its economic advantages over Changsha for a long time." He said.

In fact, due to multiple factors, Changsha has fallen behind Zhengzhou in the central region several times in the competition for national strategic positioning. In 2016, Changsha failed to be selected as a "national central city" despite its GDP leading Zhengzhou. Zhengzhou, along with Wuhan, was officially listed as a "national central city", squeezing into the "top" of my country's urban system.

Subsequently, Zhengzhou once again surpassed Changsha with its "M"-shaped high-speed rail network, and together with Wuhan, was named an "international comprehensive transportation hub city" at the national level.

In addition, as one of the earliest "Internet celebrity cities", Changsha was once known as the "new consumption capital", but with the rise of "traditional" and "ancient style" elements among young people, Zhengzhou's consumption has surpassed Changsha. In the first half of this year, Changsha's total social consumer retail sales were 278.907 billion yuan, lagging behind Zhengzhou by 13.273 billion yuan.

"As a strong provincial capital city, we should pay more attention to the city's overall driving force for the region," Niu Fengrui, a researcher at the Center for Urban Development and Environmental Studies of the Chinese Academy of Social Sciences, told the Times Weekly reporter. Although Zhengzhou's economic growth is strong, the recent growth rate of Henan Province where Zhengzhou is located is not ideal, and the development of cities around Zhengzhou is also obviously lagging behind. In the future, while Zhengzhou continues to "make the pie bigger", it may also need to consider how to drive the development of surrounding areas together to avoid the formation of "isolated islands."

In fact, Henan's GDP growth rate has been lower than the national average for four consecutive years. In 2023, when Zhengzhou's GDP grew by 7.4%, Henan's average GDP growth rate was 4.1%, 0.5 percentage points lower than Hunan.

In addition, the current development status of cities around Zhengzhou is not optimistic. In 2023, the GDP growth rates of Kaifeng and Xuchang in the Zhengzhou metropolitan area will be 0.9%, while Luoyang, Pingdingshan, Xinxiang, and Jiaozuo will grow by 3.5%, 3.2%, 1.5%, and 3.9% respectively. Only Luohe and Jiyuan will outperform the average level of Henan Province, with the growth rates of both cities being 5.4%.

In terms of the Changsha-Zhuzhou-Xiangtan urban agglomeration, in 2023, the average GDP growth rate of Hunan province was 4.6%, of which Changsha was 4.8%, and the growth rates of Zhuzhou and Xiangtan reached 5.1% and 5.2% respectively. Only four cities had growth rates exceeding the provincial average.

"At a time when some resources such as population have entered the stock era, the strategy of strengthening provincial capitals is conducive to the intensive use of limited resources. However, when there is already a certain economic foundation and the provincial capital cities have a certain degree of competitiveness, multi-polar development may be more likely to drive a breakthrough in the overall regional economy." Zeng Gang said.

It is understood that the Office of the Leading Group for the Construction of the Zhengzhou Metropolitan Circle of Henan Province has issued the "Zhengzhou Metropolitan Circle Industrial Collaborative Development Plan", which has formulated a "roadmap" for the division of labor and cooperation of the industrial system and the interconnection of infrastructure in the "inner cities". In addition, the "2024 Henan Provincial Government Work Report" also clearly mentioned the need to accelerate the construction of provincial sub-center cities and support the differentiated development of regional center cities.