Statistics gathered from 40 major cities in China rank Shanghai, Beijing, Guangzhou, Chongqing, Wuhan, Chengdu, Shenzhen, Nanjing, Suzhou and Hangzhou as the top ten cities with the highest consumption power in 2018, in descending order.

The statistics from the Shanghai Municipal Bureau of Statistics showed Shanghai reaching 1.26 trillion yuan in consumption last year—a 7.9% increase from 2017. Online retail in the city saw consumption of 150 billion yuan, an increase of 15.8% from the previous year as well.

Coming in at second place, Beijing saw total social consumption go up to 1.17 trillion yuan, a 2.7% rise from the year before. At present, only Shanghai and Beijing have total social consumption figures of more than a trillion yuan. Both of those cities are bona fide top-tier cities. High-income industries are most concentrated in Beijing, meaning a higher consumption rate.

With 925 billion yuan in consumption, Guangzhou is the third-highest and is also next in line to cross the trillion mark. Although it has a bit of catching up to do with the top two in terms of internet and finance, Guangzhou is still a commercial city that serves as a center for business, transportation, logistics and medical care in the southern parts of China.

Peng Yu, the vice chairman of the China Society of Economic Reform (CSER) noted that the consumption power of a major city attracts consumption from surrounding areas – which puts the city in a larger context. He used Hong Kong as an example, pointing out that Shenzhen suffers from a considerable consumer outflow due to Hong Kong’s being so close.

Comparatively speaking, cities such as Wuhan that serve as provincial capitals are very attractive to consumers. In recent years high-speed rails and inter-city transport networks have been built, further strengthening the consumption power of the capitals.

An official from Ezhou in Hubei province said that many Ezhou citizens went shopping in Wuhan on the weekends after the opening of the intercity railway. The opening of a subway in the future is set to add to the consumption outflow.

Cities with the highest growth rates are mainly concentrated in the south. Quanzhou, Fuzhou, Nanchang, Wuhan and Chengdu have the top five social consumption growth rates among the 40 cities in the report – and all of them are from the South. Apart from Beijing, the growth rate of total social consumption in Northeast China has slowed down, mainly due to the slowing of the energy economy and of economic growth in general in recent years.

The Institute for China Sustainable Urbanization at Tsinghua University conducted research on the development gap between the northern and southern parts of China. Their data showed that from 2004 to 2012, the north experienced a period of rapid development but 2013 was a transitional year. The North’s economic share began to decline then and in 2018 it fell to a new 20-year low of 38.5%.

The north had been fixated on heavy, traditional industry and with the newly added high-tech industries emerging in the south, the north has been lagging behind. In addition, the south also has higher per capita disposable income than the north, with the gap expanding. Cities in the north are now faced with the need to speed up the process of upgrading their industrial structures.

This article, first published on ATimesCN.com was translated by Kamaran Malik.