Guotai Junan 2015 Provincial Economic Review: No Rebalacing, Northeast Hard Hit

Some interesting charts and tables from a Guotai Junan report on the economic performance of provinces in 2015. 国泰君安: 2015地方省市经济全景图:谁在升落? The headline interpretation is my own, as evidenced by the charts below.

On some charts I've highlighted some of the Northeast provinces with a red box. Chart 28, which shows selected NPL ratios by province. If this is a business cycle contraction, the recession in the industrial sectors will spread into services and across other provinces, which will raise NPLs in the direction of those northeast provinces. Even if the problem stays localized, those bad debt ratios are only the start as overproduction is tackled.

The share of fixed asset investment as a percentage of GDP may shock anyone who believes in rebalancing. The 100% plus provinces are small (population) Western provinces being built up presently, such as the 120%+ FAI/GDP in Qinghai and Tibet. However, after the low figures in Beijing and Shanghai, and slightly higher in Guangdong, the FAI/GDP is 60% or higher.

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