35 Chinese Cities Have Economies As Big As Countries

Gaining perspective on China’s monstrous economy isn’t always the easiest thing to do.

As Visual Capitalist"s Jeff Desjardins notes, with 1.4 billion people and the third-largest geographical area, the country is a vast place to begin with. Add in explosive economic growth, a market-oriented but Communist government, a longstanding and complex cultural history, and self-inflicted demographic challenges – and understanding China can be even more of a puzzle.

Courtesy of: Visual Capitalist

CITY BY CITY

To truly grasp the emergence of China, one approach is to look at the impressive economic footprint made by the country’s cities.

Of course, cities like Shanghai, Beijing, and Hong Kong are the metro economic powerhouses that most people are familiar with. But have you heard of cities like Shijiazhuang, Wuxi, Changsha, Suzhou, Ningbo, Foshan, or Yantai?

There are literally dozens of Chinese cities that most people in Western countries have never heard of – yet they each hold millions of people and have an economic output comparable to nations.

The infographic above illustrates 35 of them, but here’s a list of 10 of them, the size of their local economy, and a comparably sized national economy:

MEGAREGIONS

It’s also important to remember that these cities don’t exist in isolation, and are instead cogs in the wheels of larger megaregions. Such areas would be comparable to the Northeast U.S., in which New York City, Philadelphia, Boston, Baltimore, and Washington, D.C. are all hours apart and remain largely integrated as a regional economy.

In China, there are three main megaregions worth noting:

Yangtze River Delta
With a combined GDP of $2.17 trillion, which is comparable to Italy, the Yangtze River Delta contains cities like Shanghai, Suzhou, Hangzhou, Wuxi, Ningbo, and Changzhou.

Pearl River Delta
With a combined GDP of $1.89 trillion, which is comparable to South Korea, the Pearl River Delta has cities like Hong Kong, Guangzhou, Shenzhen, Foshan, Dongguan, and Macao.

Beijing-Tianjin
With a combined GDP of $1.14 trillion, which is comparable to Australia, this megaregion holds the two largest cities in northern China, Beijing and Tianjin. The two cities are a 30-minute bullet train ride apart.

China Regulator Instructs Companies To Delay Bad Results Until After Congress

In the U.S., equity markets have officially reached the phase in the bubble where fundamentals are almost entirely irrelevant and stocks trade up irrespective of whether company earnings are positive or negative...in technical terms you could say we"re in the later stages of the BTFD phase of the economic cycle. 

That said, as Bloomberg points out today, regulators in China still have to be a bit more "creative" to quell market volatility during important national events.  As such, the China Securities Regulatory Commission has sent out a notice to public companies kindly requesting that they delay their earnings report during China"s Communist Party Congress...but only if they"re going to be bad.

China’s securities watchdog has asked some loss-making companies to avoid publishing quarterly results this week as authorities seek to ensure stock-market stability during the Communist Party Congress, according to people familiar with the matter.

 

The China Securities Regulatory Commission made its requests via the country’s stock exchanges, the people said, asking not to be named as they’re not authorized to talk to the media. At least 17 Shenzhen-listed companies announced delays to their earnings reports from Oct. 20 to Oct. 24, up from three during the same period last year, exchange filings show. The CSRC declined to comment, while China’s bourses didn’t respond to faxed questions.

 

Chinese regulators have stepped up efforts to quell market volatility during the twice-a-decade congress, a highly-choreographed reshuffling of the country’s top leadership that’s expected to shape President Xi Jinping’s influence into the next decade. While the smallest equity swings in 25 years suggest government interference has worked, critics argue that China’s leaders have backpedaled on a pledge to give market forces a more central role in the world’s second-largest economy.

And, to our great shock, the strategy seems to be effective:

Of course, you can"t be too blatant in your attempts to control markets so a lot of companies have suddenly decided they need to "finish checking earnings reports" while others simply said they "have a lot on our plate to deal with" and can"t be bothered by silly regulatory filings at this point in time.

Shandong Minhe Animal Husbandry Co., which farms chickens, and Shenzhen Hifuture Electric Co., an electrical equipment maker, were among the Shenzhen-listed companies asked to withhold their results this week, the people said.

 

Shandong Minhe, which estimated a loss for the Jan.-Sept. period in an Oct. 13 filing, said on Sunday that it hasn’t finished checking the content of its earnings report and will postpone its release, previously scheduled for Tuesday, to Oct. 30. Shenzhen Hifuture, which also projected a Jan.-Sept. loss on Oct. 13, gave this explanation for a similar delay in a Sunday filing: “We have a lot on our plate to deal with.”

 

Shandong Minhe declined to comment further when contacted by Bloomberg News. The stock dropped 1.1 percent on Tuesday and is down 35 percent this year. Shenzhen Hifuture, whose shares have been suspended since January, didn’t immediately reply to an email.

 

Most of the 17 Shenzhen-traded companies that announced delays to their results had previously predicted losses or steep earnings declines, filings reviewed by Bloomberg show. Ten of the companies declined on Tuesday, while one was little changed and one rose. Trading in five of the stocks was suspended.

Of course, now that the cat"s out of the bag, we"re going to go out on a limb and suggest it might be a safe bet to go ahead and unload any company that delays earnings reports over the next week or so...just a hunch.

Futures Tumble On Heavy Volume As China Golden Week Begins

As China celebrates the new year and begins Golden Week vacation, it appears US equity futures are off to a rough start on heavy volume as perhaps this weekend"s Trump dysphoria finally took the shine off the rally...

With China, Hong Kong, Taiwan, Singapore and South Korea are all shut for holidays, there is no desperate capital outflow bid of last resirt to save stocks (for now).