Mr. Wu Kaili
Deputy Director-General
Economic and Trade Commission of Guangdong Province
June 5, 2003

Ladies and gentlemen:
Good morning! According to the arrangement of the provincial government information office, I would like to, on behalf of the economy and trade commission of Guangdong province to brief on the current condition of the workings of economy over the first 4 months this year, and the measures to be taken in next stage to overcome the negative impact of SARS and ensure the sustained growth of the economy.

A, The condition of the workings of economy in the first four months of this year

Under the leadership of the Central Party Committee and the State Council, our Province has worked hard on the prevention of SARS on the one hand and promoted the economy development on the other. The overall national economy has maintained the good momentum for fast and efficient growth. In the first four months of this year, whole province realized GDP of 362.6 billion Yuan, increasing by 12.8% than the same period of the last year. The total volume ranked first in whole nation, the increase range was also higher than the average level of whole nation.

On the whole, the workings of economy of the whole province presented 5 characteristics:

I. The growth of industrial production was accelerated. In the first four months of this year, the whole social industrial appreciation was 170.638 billion Yuan, increasing by 17.3% than the same period of the last year. Among them the above industry of scale industrial appreciation was 153.515 billion Yuan, increasing by l9.2% than the same period of the last year. The increase range was 5.6 percent point higher than the same periods of last years.  Total industrial production value of whole province was 576.675 billion Yuan, increasing by 22.6% than the same period of the last year.   The increased range was 5.9 percentage points higher than the same periods of last years. It was the highest level since 1998.

II. The obvious functions of the pillar industries. Pillar industries have the obvious functions for supporting the development of economy. According to the statistics, electronic information, electric machinery and petroleum chemical as three new pillar industries realized 291.1 billion Yuan of total industrial production value in the first four months of this year, accounting for 50.5% of the total production values of whole province, increasing by 25.1% than the same period of last year. The increase range was 2.5 percent point higher than the average level of whole province industries. Cars, medicine, paper making, the three big potential industries realized 48.6 billion Yuan of        total industrial production value, accounting for 8.4% of the total production value of whole province, increasing by 25.2% than the same period of last year. The increase range was 2.6 percent point higher than the average level of whole province industries.

III. Export and the domestic sales rose concurrently. In the first four months of this year, the sales income of industry of whole province was 557.0 billion Yuan; increasing by 22.3%. The increase range was 12.33 percentage points higher than the same period of last year. The sales rate of product was 97%, at the higher level of history. Among them, the delivery value of the industrial exported products was 233.413 Yuan, increasing by 23%. The increase range was 6.6 percentage points higher than the same period of last year, and also 2.1 percent point higher than for the domestic sales. It is the main factor to drive the industrial sales.

IV. The flash points of social consumption were conspicuous. According to the statistics, the sales of the products of building materials increased by 51% over the same period of last year. Car product sales increased by 33% over the same period of last year. Commercial housing sales increased by 24% over the same period of last year. Under these factors, the total retail sales of social consumer goods of whole province rose steadily, showing an increase of 10.8% over the same period of last year to 178.01 billion Yuan. Among them, the wholesale and retail trade industry above the quota increased by 27.7%. The sales volume of 25 leading distribution enterprises in the Province increased by 30.52%.
V. An obvious enhancement of economic performance. In the first four months of this year, the comprehensive economic performance index of whole Province was 139.1, increasing by 11.2% over the same period of last year. Total profits were18.439 billion Yuan, increasing by 15.58%. Among them, the total profits of state-owned and state-holding enterprises were 7.663 billion Yuan, increasing by 36.48%, accounting for 41.56% of the provincial industries. The total amount of revenue reached 8.786 billion Yuan, an increase of 14.99%, accounting for 47.65% of the provincial industries.
The above conditions indicate that although suffering from the impact of SARS, the national economy of our province still maintains good momentum for sustained, fast and healthy development. However, we are also soberly aware that deep-seated problems still exist in the workings of economy. In the aspects of reform of enterprise, structure readjustment, the input of the technical transformation and market exploration, there are still some distance between Guangdong and cities like Shanghai,                                        
Jiangsu, Zhejiang, Shandong... etc, particularly at the growth speed. Therefore, we should earnestly study and carry out the important remarks made by Mr. Hujintao, Secretary General of CPC, during his inspection tour of Guangdong. We should continuously increase the creative advantages and make great efforts for faster development, initiative development and coordinated development.
B, The negative impact of SARS on the economy of Guangdong
The facts prove that SARS, a calamity which arose suddenly has already made negative impacts on the economic development of Guangdong. On the whole, the influence on service sector is greater than that of industry; the influence on Pearl River Delta region is greater than that of east and west flanks and mountainous area; the influence on traditional industries is greater than that of high and new technology industries and the influence on outward source economy is greater than that of inward source economy.
The specific manifestations are as follows:
(a) The catering and retail sectors showed a tendency of monthly decline.
According to the statistics, the sales volume of catering and retail sectors of whole province was 8.342 billion Yuan in January, 8.004 billion Yuan in February, 6.546 billion Yuan in March and 5.922 billion Yuan in April. Although the accumulated total volume in the first four months showed some increase over the same period, the increase range was down 6.1 percentage points.
(b) The orders for export and domestic sales decreased significantly.
Because of the difficulties of personnel contacts, the suspension of ordering and sampling of the products and the changes of market demand, orders for textile and garment, food and beverage, building material were decreased noticeably, particularly in the business of garment, shoes, toys, leather, jewelry etc. Some enterprises had their orders reduced by over 50%.
 (c) The economic and trade activities were once stagnant.
Because of the negative influence of SARS, previously scheduled domestic and international business tours, the economic trade talks, and related exhibitions were all canceled or postponed. The signed contracts as well as the implementing contracts were unable to be carried out.
(d) Transportation showed negative increase.
Because of the negative influence of SARS, the increase range of passenger and cargo traffic showed a tendency of monthly decline since this year. Passenger and cargo traffic all appeared to have negative increase in April. Among them, air traffic decreased by 32.9% than the same month of last year, water traffic decreased by 20.7% and railroad traffic decreased by 16%.
We should still see that the above influence has long-term implication. The impact of SARS on the economy will be possibly more obvious and more serious in the following a few months. Therefore, we should have sufficient psychological preparation to face the difficulty and challenge for economy development in the second half of this year.
C, The main measures to overcome the negative influence of SARS
With the concerns of the Central Party Committee and the State Council, under the correct leadership of the provincial party committee and government, our province has already obtained important stagy results on the prevention and treatment of SARS by united efforts and tenacious struggles of the people of Guangdong Province. On May 23, World Health Organization lifted the travel warning for our Province. Provincial government held a meeting a few days ago to study how to overcome the negative influence of SARS and how to reduce the losses to the lowest extent and ensure the completion of various targets of the economy and society development of this year. According to general directions of the provincial government and in view of the situation of economic and trade systems, the economy and trade committee of Guangdong province decide to adopt the following measures to overcome the negative influence of SARS:
(a) Continuously do good jobs in the fight against SARS.
Determinedly overcome the slack and careless thoughts and firmly set up the consciousness of long-term battle, and continuously enhance the guidance work to every kind of enterprises on the prevention of SARS, to prevent the spreading of SARS. At the same time, support the production of anti-SARS drugs, utensils and work on the storage of medicine to ensure the market supply.
(b) Expand the international and domestic market vigorously.
One aspect is to deeply expand the markets of our province. Centering on the recently emerging fashionable items of consumption such as housing, decoration, cars, education, sport and recreation to adjust the patterns of the commodities and promote the production of sell-well products. On the other hand, speed up the expansion of rural markets and by cultivating new consumption items to start all round rural markets. We should also organize marketable products for farmers. The second is to intensify the efforts to explore markets of hinterland, primarily focus on central and western region market. First thing is to resume the contacts of normal business as soon as possible, and carry out already signed contract of every kind. At the same time, combine the expansion of the market with the economic cooperation. In regions with ripe conditions, the resumption of large Scale of meetings and the exhibitions should be put on the agenda; the region that are temporarily unsuitable also need to organize the enterprises to go out for seeking business opportunities. The third is to find the effective channels of exploring the international markets. Intensify the publicity and timely notify the situation of SARS and the workings of economy.  Further improve the service for foreign funded enterprises and help them to resolve the difficult problems in their production and management. Make greater efforts for foreign exchange activity, not only invite the foreign business people to come but also organize the enterprises to go out to gain more orders; gradually increase web transactions and make full use of modern information technology; develop e-commerce and enhance the proportion of web transaction in foreign trade.
(c) Do everything possible to redouble the efforts for attracting investment.
First, make more efforts toward the main projects in order that some of them can be done at the end of this year. The most importance among them is the Ten Projects   (express ways, energy constructions, natural gas, petrochemicals, automobiles, inner-city highway, environment protection, high-technology, water irrigation and cultural projects) of the province, which will contribute most to the economic growth of this year. Secondly, do more efforts toward the input for technology improvement. Support and guide the enterprises to made up their minds to raise more funds for the technology improvement. In this respect, one thing we can do is to make full use of the special funds owned by the government, which will give rise to more social capital. Thirdly, do more efforts toward attracting more foreign investment. On one hand, encourage the present foreign companies to enlarge the production scale; on the other hand, broaden the field of attracting foreign investment, use all kinds of means, such as through Internet, by proxy and by agency to attract more foreign investment to take part in the technology improvement. According to the province government, the economy& trade commission of Guangdong province will put forth some nice items of projects and enterprises for foreign cooperation.
 (d) Advance the development of the economy of non-public sectors.
The growth of appreciation of the industry of non-public sectors reached 25 percent for the first 4 months this year, making it an important part in the economy development. We will take some efforts to support the non-public sectors of the economy. Firstly, We should give full support to non-public sector by carrying out the spirit of the Conference on the economic work of the non-public sectors of Guangdong province; secondly, We should carry out the eleven policies designed by the Conference with regard to market access, investment, financing, taxation, land use, and other aspects to create a more relaxed environment for the non-public sectors. Thirdly, We should form a group of larger and stronger companies and enterprise of the non-public sectors. Fourthly, We should advance the social credit system with the financial institutions, mainly support some kind of credit enterprises, aiming at the non-public and small and medium enterprises, helping them solve the difficulties to gain loans.
 (e) Make great efforts to help the industries affected by SARS.
First, the most importance thing is to carry out the tax reduction and exemption policy made by the state council and the province toward the affected industries. Second, go down to the cities of the province to support and guide the enterprises recover from the impact by SARS. Third, make some research about the severely affected industries or enterprises, put forth some suggestions to the government.
(f) Try hard to rectify and standardize the economic order of the market by addressing both the symptoms and root causes.
On one hand, efforts to manage and rectify the markets for special cases will be strengthened. What to be concentrated on at this time is the fight against the manufacture and marketing of fake or shoddy goods as well as the price fraud in name of fighting SARS. On the other hand, we will improve order ensuring good credit among members of society and work to strengthen law enforcement and improve discipline. In the same time, we will speed up the pace of building a social credit system.
(g) Pay more attention to the safe production.
The problem of safety is the most important thing in the social production. Three aspects should be strengthened as following: first, the responsibility system of safe production should be carried out. Second, checkouts should be done over the province to find out the potential problems and solve them immediately. Third, the fighting on the coal mine, dangerous chemicals product will be strengthened as well as the traffic safety.
 (h) Reinforce the macro-control and readjustment.
First, focus on the supervision and analysis of economy situation; second, strengthened planning and direction on electricity and transportation should be. Third, arrange some meetings for the cooperation of bank and enterprise. Fourth, support and guide the key industries, high growth industries, main area, main enterprises and key products to help them make up the losses they sustained through faster development.
I believe that, with the support of the Central Committee of the party and State Council, under the guidance of the province party Committee and government, the Guangdong people have the strong confidence to overcome the difficulties caused by SARS and fulfill the targets for the social and economic development of this year.

Editor: Wing