China?s latest quarterly GDP growth numbers contain some surprises. The first surprise is the moderation in growth rate. GDP growth in the first quarter of 2012 is estimated at 8.1%. This is a relatively low rate by Chinese standards. Moreover, it marks the third successive quarter where GDP growth has declined, from 9.1% in the third quarter of 2011 and 8.9% in the fourth quarter of 2012. The question being raised in some quarters is whether this marks the beginning of a trend that will see result in long-term softening of China?s GDP growth.

The second surprise is in the nature of the contribution of provinces to overall GDP growth. Of the 29 provinces, municipalities and autonomous regions that have released quarterly GDP growth rates, 24 show declines in GDP growth. It is clear that a majority of Chinese provinces are experiencing perceptible reductions in economic activity. Nowhere are these slowdowns more pronounced than in centres that have become synonymous with China?s economic miracle: Shanghai, Guangdong, Beijing, Zhejiang, Shenzhen and Dongguan.

The third surprise is that China?s famous growth engines are not producing the steam that normally one associates them with. Shanghai and Beijing have grown by only 7%, which is more than one percentage point less than the overall GDP growth. Zhejiang and Guangdong have growth rates of 7.1% and 7.2% each. Shenzhen and Dongguan (cities in Guangdong that have powered China?s growth through years of high-volume exports) show growth rates of 5.8% and 1.3% only.

The fourth surprise is a geographical shift in the source of GDP growth. Instead of the high-profile growth centres of the East and South, provinces from the hinterland are showing signs of becoming bigger contributors to GDP growth. Five of the 29 provinces have shown higher growth rates in the last quarter. These include Jiangsu, Inner Mongolia, Henan, Guanxi and Ningxia. Except for Jiangsu, which is a prominent province in the East, the rest are all hinterland provinces. While it is still too early to conjecture a firm trend on the basis of the latest quarterly growth results, the beginning of an internal relocation of China?s growth hubs within the mainland cannot be ruled out.

The quarterly GDP growth figures were accompanied by reports on China?s foreign trade growth, which show 7.6% growth in exports and 6.9% growth in imports (year-on-year). Given these rates, particularly the low rates of 4.9% and 0.3% for exports and imports recorded in the month of April 2012, there are doubts over whether China will achieve its target growth of 10% in foreign trade for 2012. The provincial foreign trade figures provide some insights on why China?s established growth centres?all of which are coastal export hubs?are doing badly. Guangdong, Shanghai, Zhejiang, Shandong, and even Jiangsu, are experiencing sharp declines in foreign trade growth.

The GDP and foreign trade numbers reflect the contraction being experienced by the Chinese economy due to recessionary conditions abroad. Low demand for exports from Europe, the US and Japan have affected production and economic prospects in China?s coastal provinces as well as other export centres. The latter have typically been used to supplying large volumes of exports to foreign markets. Lesser orders from overseas have affected turnovers of thousands of export-oriented enterprises in Guangdong, Zhejiang and other provinces.

The second implication of the latest estimates is the beginning of a far-reaching change in the Chinese economy. Some provinces, which have till now played key roles in aiding Chinese GDP through volume-based exports, are beginning to become less important than the hinterland provinces. The latter are less reliant on labour-intensive exports and hence less dependent on prospects in overseas markets. Growth in the hinterland provinces is being driven mainly by services such as transport and logistics. At the same time, some provinces such as Jiangsu have been able to overcome their reliance on batch-based exports by graduating to high-value added activities.

So is China?s export-based model of economic growth, which has resulted in its deep penetration of global markets and the country?s emergence as one of the largest players in world trade, coming to an end? If so, are some of China?s geographical icons, such as Shenzhen, which have been the most successful symbols of socialist China?s tryst with capitalism, also going to fade away? It is too early to answer these questions. But they will continue to loom large as the Chinese economy undergoes a somewhat rocky transformation.

The author is head (partnership and programme) and visiting senior research fellow in the Institute of South Asian Studies in the National University of Singapore. He can be reached at amitendu@gmail.com. Views are personal