Guangdong Provincial Bureau of Statistics

July 15, 2003

This year, under the correct leadership of the CPC Central Government and the State Council, the people of Guangdong stand united and calmly meet the unexpected epidemic SARS (severe acute respiratory syndrome). No delay in economic development is allowed while the fight against SARS is going on. We unswervingly adhere to no suspension of production, classes, market trading and office work of government organs. The overall economy maintains a basically stable performance, registering a rather high growth though the speed is slightly slower compared with the first quarter. Preliminary statistics showed that the cumulative value of gross domestic product (GDP) in the first half of this year was 582.2 billion yuan, up by 12.6 per cent or 1.9 percentage points over the same period of the previous year, but down by 0.4 percentage points over the first quarter of this year. Of this total, the primary industry was down by 1. 3 per cent, the secondary industry was up by 16.0 per cent and the tertiary industry was up by 10.5 per cent. Major features in the economic performance came as follows.

First, smooth development in agricultural production. From last winter to this spring, a temperate climate provided a good environment for the growth of crops. The planting areas in winter were kept stable in every region. A growth of 0.4 per cent was registered in the total output of the spring grains, representing the first increase in production after the consecutive decline since 1999. Continuous development was achieved in vegetable production. However, a drop was seen in fruits and bad efficiency was found in animal husbandry. In terms of forestry, the afforested areas were less than the same period of last year. The value-added of agriculture was slightly down on a year-on-year basis.

Second, a new high set in the growth speed of industrial production and great improvement in its efficiency in recent years. In the first half of the year, the value-added of the industrial enterprises above designated size reached 243.9 billion yuan, up by 19.5 per cent or 5.3 percentage points year-on-year. Some hot-spot sectors registered a rapid growth. The gross output value of transportation and equipment manufacturing was up by 35.1 per cent and that of the telecommunications, computers and other electronic equipment manufacturing was up by 28.2 per cent on a yearly basis. Industrial efficiency continued to tend for better trend. During the January-May period, the comprehensive index of industrial economic efficiency above designated size was 142.3, up by 10 8 percentage points over the same period of 2002. The total profits created by industry witnessed a growth of 34.6 per cent, up by 14.0 percentage points year-on-year.

Third, good momentum kept in investment. In the first half of this year, the investment in fixed assets totaled 183.4 billion yuan, up by 27.9 per cent. Of this total, the investment in capital construction maintained a good momentum, with the cumulative investment up by 50.2 per cent over the first six months of the previous year. The investment in technical updating and transformation was obviously strengthened with a growth of 15.4 per cent. And a slowdown was seen in the investment in real estate development, representing an increase of 7.6 per cent. Houses were well sold at steady prices. The first six months saw a growth of 27.3 per cent and 27.0 per cent in sales value and floor space for sales of commercial buildings respectively.

Fourth, smooth growth of sales in domestic market. During the first six months of this year, the cumulative retail sales of consumer goods in Guangdong topped 262.6 billion yuan, up by 10. 4 per cent year-on-year, but down by 0.8 percentage points compared with the first three months. Of this total, the retail sales of catering came to 41.36 billion yuan, up 5,. 0 per cent, or down by 7. 7 percentage points over the same period of last year and 5.3 percentage points over the first quarter of this year. Prices were stable. The cumulative consumer price index was up by 0. 3 per cent,.

Fifth, fast growth harvested in import and export and in utilization of foreign capitals. In the first half of 2003, the total value of import and export reached 124.57 billion US dollars, up by 27.3 per cent on a yearly basis, of which the value of export was 65.87 billion US dollars, up by 26.2 per cent, and that of import was 58.7 billion US dollars, up by 28.5 per cent. The foreign capitals actually utilized maintained a continuous growth, resulting in a value of 8.08 billion US dollars or an increase of 28.7 per cent on a year-on-year basis.

Sixth, continuous growth realized in people's income. The per capita disposable income of urban residents was 6,498.7 yuan in the first six months, with a nominal growth of 10.2 per cent year-on-year. The per capita cash income of rural residents was 1,957.6 yuan, with a nominal growth of 6.4 per cent over the same period of 2002. Given the overall situation, the effect of SARS is abated and the affected sectors are rebounding to some extent. Tourism in Guangdong is on the move. Rapid growth has begun in the tours to Guangzhou, Guangdong, other provinces, Hong Kong and Macao. And steps are gradually taken to reopen the tours to foreign countries. Various travel agencies are making efforts to attract tourists with preferential prices. In June, the number of tourists for domestic travel and provincial travel totaled over 200, 000. The catering in Guangdong is obviously picking up. The retail sales of catering in June witnessed a value of 6.38 billion yuan, up by 2.0 per cent over the same month of last year, which represented a great improvement compared with a decline of 1.9 per cent and 2.6 per cent in April and May respectively. Slowdown in transportation is reversing. The volume of passenger traffic in June was up by 12.8 per cent over that in May, with its falling range climbing back to 8.8 percentage points from that of May though still down by 25.3 per cent on a yearly basis. The industry maintains an accelerated momentum after a suspension of small-range rebound. The value-added completed in June was up by 22 per cent over the previous year, or 4.6 percentage points higher than that in May. Some improvement was achieved in service trades.

All in all, the effect of SARS is smaller than estimated and the economic performance of Guangdong is basically stable. Major economic indicators keep fast growth. The good economic situation in the first quarter is basically maintained, which is brought about mainly by the following measures. First, a series of policies and measures against SARS formulated by the Central Government and the provincial government ensure a timely, strong and effective solution to reduce panic of the public and encounter the negative effect of the epidemic. Second, the CPC committees and governments at all levels spare no efforts to continue the economic development while fighting against SARS. Related policies of the Central Government have been implemented. The enterprises affected by SARS are supported to stand united. Every effort is made to control the effect of SARS and losses to the minimum. Third, since the reform and opening-up, Guangdong has accumulated a rich overall economic strength and solid material basis, which provides an important guarantee for the stable development of economy and society. From the trend of macro-economy, the China's economy is in uprising phase and the huge market makes it possible for our economy to have more room for development. This has been proved by the fact that the foreign capitals continue to grow greatly during the SARS-stricken period. Fourth, the tertiary industry, which attracts the people most, is the one mainly affected by SARS while the industry is limitedly affected. Guangdong is still in the intermediate phase of industrialization with industry playing an outstanding role in economy. That most of the industrial enterprises maintain normal production acts as an important support to the overall economic growth. Fifth, some sectors take this opportunity to become the new focus of economic growth. In the first half of the year, the total value of medicine industry in Guangdong was up by 26.6 per cent, or up by 12.9 percentage points on a year-on-year basis. The sales of goods for medical care were brisk. The production and sales of cars maintained good momentum. And the growth speed was obviously quickened in the sales of sports apparatus, electric fans, sterilizing cupboards and bicycles, etc. Six, the SARS cases in Guangdong were mainly found in the first quarter whereas the effect to our economy didn't show up until April, when the epidemic had already been under preliminary control and the policies and information concerning that had become transparent. There was an obvious "time difference" between the outbreaks of SARS and its effect to economy, which was objectively favorable to the stable growth of economy.

From the prospect of the whole year, there are still many favorable conditions for the economic growth of Guangdong though the epidemic SARS has brought about some negative effects on the current economic performance. The effect of SARS can not change our basically favorable factors including the potential market, relatively perfection of market system, rich labor resources, relatively abundant capitals, improved supply of infrastructure like energy and transportation and basic products, etc. Another cycle of consumer hot spots has taken shape such as vehicles, information and telecommunication products and housing, etc. The economic development is pushing forward by many positive factors. It is estimated that the national economy and social life will basically come back to the normal track in the third quarter. Guangdong's economic growth of 2003 is expected to take a U trend, which means the growth of the first quarter is high, the second quarter declining to some extend, the third quarter gradually stable and the fourth quarter slightly accelerated. Our economy of this year will step into a new platform with a growth of over 12 per cent, exceeding the originally expected growth target.

Fully affirming the good performance of the overall economy and the phrasal victory in fighting against SARS, we can not neglect the fact that some sectors badly affected by SARS have not returned to the normal growth level yet, the decline in agricultural production in the first half year will lag behind the further growth in the farmers' income, the attack of the epidemic increases the pressure of the labor market and our front-runner role in China's economy confronts more severe challenges.

In view of existing problems, on the one hand, the epidemic prevention should be strengthened. The SARS monitoring system and prevention and control system should be systematized in the long run. Every attention need be paid to prevent the possible rebound of the epidemic. We should take this opportunity to push forward the thorough development of various social undertakings and the cultural progress in every aspect. On the other hand, the economic development should be greatly promoted. In the short term, related policies must be earnestly implemented to support those sectors badly affected by SARS. Work should be quickened in the ten key projects determined by the provincial government at the beginning of the year aiming at promotion of the investment growth. Effort of attracting foreign capitals need be strengthened to expand the export. Guidance ought to be given to the enterprises to follow the changes of market and seize new business opportunities. We should do our utmost to strengthen our initiative and creativity and control the effect of SARS and losses to the minimum in order to realize the pre-set target of the whole year. In the long term, we should put focus on perfecting the market mechanism, push forward the development of science, education and culture, sharpen the competitive edge of industries and create new advantages. It is necessary to seize the opportunity of CEPA (the close economic partnership arrangement between the mainland and Hong Kong), put ourselves further into the international economic society and stand united to set up a larger dynamic Pearl River Region. With the deep implementation of the important speech made by the CPC Secretary General Hu Jingtao on his tour to Guangdong, a quick, leading and harmonious development should be realized to better play our role as a front runner in the process of building a well-off society in an all-round way and quickening the socialist modernization.

Editor: Liao Ming