Two cities that have served as economic pillars of Guangdong province appear to be losing steam relative to their peers, prompting calls for stronger action to revive businesses. Tech hub Shenzhen and manufacturing center Guangzhou reported gross domestic product growth of 5.1% and 3.8% respectively in the first half of 2025, both below the national average of 5.3%. The simultaneous slowdown came as uncertainty grips the global supply chain and domestic demand fails to make up for the shortfall, analysts said.
“Shenzhen is facing dual headwinds from weakening global demand and a local property downturn, particularly in the commercial real estate sector, which has dragged down both exports and investment,” said Peng Peng, Executive Chairman of the Guangdong Society of Reform, a think tank affiliated with the provincial government. Shenzhen’s decline is particularly notable as fixed-asset investment (FAI) dropped 10.9% year-on-year and real estate development plunged 15.1%, reflecting weakened investor confidence. While the city’s hi-tech industries grew by over 35%, its exports fell 7% and total trade dipped by 1.1%. These figures indicate external pressures – particularly the tariff disputes and tech curbs being levied by Washington – continue to weigh heavily on the city. “The decline in fixed investment in Shenzhen was somewhat unexpected, particularly the steep fall in real estate investment. Office vacancy rates in the city remain high,” Peng said.
Guangzhou, the provincial capital, continues to be held back by underperformance in two of its bedrock industries: automobiles and real estate. While its growth was slower than Shenzhen’s, there has been marginal improvement compared to the most difficult periods of the recent past. After 15 consecutive months of contraction, the value-added output of large-scale industrial firms edged up 0.7% in the first half of 2025. Property investment also turned positive, rising 4.1% year-on-year after three years of decline. Nonetheless, pain points persist, most notably in the fuel-powered auto sector where output fell 5.7%. In contrast, exports surged 25.2% year-on-year, the largest increase among China’s top 10 trading cities. Shipments to Africa, Asean and the European Union all jumped over 30%, suggesting the city is gradually diversifying away from its dependence on the U.S. market.
“This rebound partly stems from a low base last year, but also from Guangzhou’s export structure, which relies more on intermediate goods and less on consumer products,” said Wang Zhen, Researcher with the Shenzhen-based China Development Institute. “That makes it less exposed than Shenzhen to global trade shocks.” Guangzhou has long been regarded as a barometer of China’s economy, but it has been overtaken in terms of raw GDP by Chongqing municipality.
Whether Guangzhou and Shenzhen can reverse the downward trend in the second half of the year depends on the stability of foreign trade and the recovery of their staple industries, Peng said, as reported by the South China Morning Post.
