China's economic divide between rich south and lagging north set to widen

Regional gap may worsen as China looks to reduce carbon emissions and impose financial discipline on local governments, Nomura says.

The economic divide between China’s prospering southern regions and lagging northern areas will continue to widen in coming years, with huge implications for growth, debt and policy making, according to Nomura Holdings Inc.

The gap between the north and the south has grown over the past decade, with southern provinces benefiting from export dependence and the internet boom, while resource-rich northern regions were dragged down by slower fixed investment, falling commodity prices and population migration. Nomura estimates that northern China’s share of the national economy shrank to 35.2% last year from 42.9% in 2012.

The pandemic has worsened the divide