By Ellen Zhang and Kevin Yao
BEIJING, July 28 (Reuters) - China's regional growth data underscored the uneven nature of the country's economic transition in the first half of 2026, as provinces at the forefront of Beijing's push into hi-tech sectors pulled ahead of those reliant on traditional industries.
The divergence reflects a broader shift toward a two-speed economy, with booming factories and exports supporting growth while weak housing and consumer spending continue to weigh on domestic demand, complicating policymakers' efforts to tackle the economy's "strong supply and weak demand" imbalance.
Among China's major provincial-level economies, southern Guangdong, eastern Zhejiang, Shanghai, Anhui and Shandong were the notable exceptions to the nationwide slowdown, accelerating their growth rates even as national GDP growth eased to 4.7% in the first half from 5.0% in 2025. All five are heavily exposed to advanced manufacturing, semiconductors, AI-related industries and high-value exports.
Fifteen of mainland China's 31 provincial-level economies outpaced the national growth rate of 4.7% in the first half, while 16 lagged behind, data released by local statistics bureaux showed.
NEW ECONOMIC DRIVERS PROPEL GROWTH IN EASTERN PROVINCES Zhejiang, a manufacturing powerhouse, led growth with a 5.7% expansion, followed by Shandong and Anhui provinces and the financial hub Shanghai at 5.6%, supported by semiconductors, electric vehicles, robotics and artificial intelligence.
Provinces with greater exposure to property and traditional industries, including Hunan, Jilin, Shanxi and Liaoning, were among the weakest performers in the first half, underscoring the difficulties facing regions that have yet to develop strong high-tech manufacturing engines.
Growth in the first half slowed to 2.7% in Hunan, 2.4% in Jilin, 2.1% in Shanxi and 2.5% in Liaoning.
"The diverging growth rates reflect provinces' differing reliance on old and new economic drivers, with regions more exposed to traditional sectors generally expanding more slowly than those with stronger new-economy industries," said Zhaopeng Xing, ANZ's senior China strategist.
Only six provinces accelerated from their 2025 growth pace, including Guangdong, Zhejiang, Shanghai and Anhui, highlighting the growing importance of high-tech manufacturing as a driver of regional growth.
Anhui overtook Hunan to rejoin China's top 10 provincial economies, with first-half GDP rising to 2.74 trillion yuan ($404.9 billion).
Its ascent has been powered by electric vehicles and electronics. Industrial output of high-tech manufacturing surged 44.6%, while auto manufacturing rose 29%. Output of new-energy vehicles and industrial robots rose 20.6% and 16.2%, respectively.