In the first quarter of this year, good beginning was seen in Guangdong's national economy. The main economic indicators acquired fast growth, leading the economy into an expansion period. According to preliminary estimation, the gross product value of Guangdong was 317.98 billion yuan, up by 15.0 per cent or 2 percentage points higher than that over the same period of the previous year, representing a record high in recent 10 years. Of this total, the value-added of the primary industry was 14.29 billion yuan, up by 1.3 per cent; the secondary industry was 168.72 billion yuan, up by 19.1 per cent; and the tertiary industry was 134.97 billion yuan, up by 11.8 per cent. The main features of Guangdong's economy came as follows.

Firstly, the agricultural production turned for better trend.

The spring ploughing and its preparation were quickened and the grain production was strengthened. With the ease of drought, the reform of rural taxes and fees and the continuously rise in grain and oil (or fat) prices, the farmers' desire to plant grain was growing. The planting area of early rice was predicted to be 18,410,000 mu, up by 1.0 per cent over the first three months of the previous year. Up to the mid-March, some 9,800,000 mu of the spring crops was planted, accounting for 56 per cent of the planned planting area. In the first quarter, the cumulative output of the poultry meat was 329,600 tons, down by 2.9 per cent on a year-on-year basis. The bird flu, which broke out in some regions of Guangdong in the later period of January, exerted some impact on the poultry production, circulation, consumption and export. However, due to the strong and timely measures from all agencies, the epidemic didn't cause excessive panic and the production was recovered soon after the removal of the epidemic. The animal husbandry production was smooth. The fishery production was also rebounding.

Secondly, the industrial production maintained rapid growth.

In the first quarter, the value-added of the industrial enterprises above designated size was 145.69 billion yuan, up by 23.1 per cent year-on-year, or 5.4 percentage points quicker than the average speed of the national total. Of this total, the value-added of the light industry was 63.74 billion yuan, up by 18.1 per cent; and that of the heavy industry was 81.95 billion yuan, up by 24.8 per cent. The industrial sector contributed 64.4 per cent to the total GDP growth, or 9.7 percentage points to push forward the economic growth with an increase of 2.1 percentage points over the same period of the precious year.

In terms of its growth structure, the factors to accelerate the industrial production included: First, the growth of all types of economic ownerships was quickened. Of this total, the fastest growth was registered in the share-holding industrial enterprises, up by 24.8 per cent, or 1.7 percentage points quicker than the average speed of the whole industrial enterprises above designated size. Good performance was also found in the State-owned and State-holding enterprises and the enterprises invested by foreigners or investors from Hong Kong, Macao and Taiwan, up by 22.7 per cent and 23.1 per cent. Second, fast growth was achieved in most of the industrial sectors. Among the 37 sectors, 36 of them kept growth and 10 of them grew by over 25 per cent. Third, the output of the energy and raw material products and transportation equipment products rose to great extend. During the first three months, the cumulative electric power generated increased by 25.5 per cent; the fuel oil processing, up by 56.8 per cent; the gas, up by 58.5 per cent; the pig iron, up by 40.6 per cent; the rolled steel products, up by 34.1 per cent, and the cars, up by 59.7 per cent. Fourth, the adjustment and optimization of industrial structure played positive roles. The total output value of the three rising pillar industries including electronics, electric equipment and machinery and petrochemical products topped 276.63 billion yuan, up by 26.4 per cent, taking up 50.8 per cent of the industrial enterprises above designated size. The three industries played a main role in promoting the rapid growth of the industry, with a contribution rate of 58.2 per cent or 13.1 percentage points to the provincial industrial growth. The industrial structure was heavy-oriented. The growth rate of the heavy industry was 6.7 percentage points quicker than that of the light industry. Further expansion was made in the size of the high-tech industry, with its output value accounting for 30.3 per cent of the industrial enterprises above designated size.

Thirdly, investment kept good momentum.

Following the quick steps of the previous year, the investment in fixed assets continued to grow fast. In the first quarter, the total investment in fixed assets came to 96.50 billion yuan, up by 40.2 per cent, or 19.8 percentage points higher than that in the first three months of 2003. Of this total, the investment in capital construction was 38.15 billion yuan, up 63.2 per cent; and that in technical updating and transformation was 8.04 billion yuan, up 18.0 per cent; that in real estate development was 25.24 billion yuan, up 14.0 per cent; and that in other investment was 25.07 billion yuan, up 51.9 per cent.

The main factors of the rapid rise in fixed assets investment included:

First, the first quarter saw more under-constructed and newly-started projects and abundant construction capital. The number of under-constructed and newly-started projects was 5,054 and 1,182 respectively, an increase of 592 and 134 on a year-on-year basis. The construction capital in place was 136.22 billion yuan, up by 55.5 per cent. Second, the investment in industry rose quickly. The investment industry was 31.6 billion yuan, up by 73.1 per cent, or 19.4 percentage points to push forward the total investment in fixed assets. Third, the non-state investment grew remarkably. The non-state investment totaled 33.93 billion yuan, up by 49.3 per cent. Of this total, the private and individual investment was 18.83 billion yuan, up by 77.5 per cent. Fourth, the external investment became the important pushing force. In the first quarter, the foreign investment and the investment from Hong Kong, Macao and Taiwan reached 12.91 billion yuan (excluding the investment in real estate development and house-building for private use), increasing by 72.4 per cent on a year-on-year basis.

The sales of commercial housing were smooth and the average sales price was on the rise. The first quarter witnessed a sales value of 17.99 billion yuan and floor space of 4,718,600 square meters, up by 37.5 per cent and 19.1 per cent respectively. The average sales price for the commercial houses went up, with 3,814 yuan per square meter, or 510 yuan more than that of the same period of 2003.

Fourthly, the sales in domestic market rebounded rapidly.

In the first quarter, the total retail sales of consumer goods stood at 157.17 billion yuan, up 12.9 per cent, or 1.7 percentage points year-on-year. Of this total, the retail sales in urban areas were 114.20 billion yuan, up by 14.3 per cent, or 10.2 percentage points to push forward the growth of the provincial total. The retail sales in rural areas were better than the same period of the previous year, with its retail sales coming to 42.97 billion yuan, up by 9.4 per cent or 0.9 percentage point s on a year-on-year basis. Analyzed by sector, the wholesale and retail industry was 130.94 billion yuan, up 13.7 per cent. Due to the brisk market in New Year's Day and the Spring Festival holidays, the catering industry continued to grow. During the first three months, the catering industry rose by 10.9 per cent. The consumption of cars, housing and telecommunications kept good momentum. The cars sold by the trade enterprises above designated size were 68.1 per cent. As for the housing construction and decoration materials and household appliances and video equipment, their retail sales grew by 56.6 per cent and 11.9 per cent respectively. The retail sales of telecommunications equipment dominated by cell phones increased by 120.5 per cent.

The market prices continued to grow by a small margin. The general consumer price index was up by 1.7 per cent, of which the consumer price indexes of urban residents and rural residents grew by 1.4 per cent and 2.4 per cent respectively. The price index for consumer goods was up by 2.3 per cent, whereas the price index for service items was down by 0.2 per cent.

Fifthly, fairly fast growth was registered in imports and exports.

In the first quarter, the total value of import and export stood at 72.74 billion US dollars, a growth of 24.5 per cent year-on-year. Of this total, the value of export topped 37.27 billion US dollars, up 22.2 per cent, and the value of import reached 35.47 billion yuan, up 26.9 per cent. In terms of the export of mechanical and electrical products and high-tech products, they increased by 27.0 per cent and 40.2 per cent respectively. The export of the general trade surpassed that of the processing trade, whose value was 7.45 billion US dollars, up by 29.9 per cent, or 10.3 percentage points quicker than that of the processing trade. Analyzed by destination, the export to major trade partners was further quickened, of which the export to Hong Kong was up by 22.1 per cent, to the United States was up by 21.2 per cent and to the European Union countries was up by 20.8 per cent.

Sixthly, the incomes of residents grew fast and the business climate kept high level.

Steady increase was registered in the incomes of urban and rural residents. The per capita disposable income of urban residents was 4,186 yuan, up 12 per cent year-on-year if price factor was excluded. The per capita cash income of rural residents was 1,231 yuan, a real growth of 9.1 per cent. Of this total, the per capita cash income from household business grew by 10.4 per cent and the per capita wages income increased by 9.8 per cent.

The management confidence of entrepreneurs was strengthened. The entrepreneur confidence index in Guangdong was 138.5, 8.1 percentage points higher than that of the same period of the previous year, representing a fairly high level in recent years. The business climate index was 134.4, up by 2.9 percentage points year-on-year.

All in all, Guangdong's economy in the first quarter followed the quickening development steps of 2003 and acquired a good beginning. Our economy was in the upturn period of the new economic cycle. Continuous improvement was achieved in economic structure. All these indicated that Guangdong's economy was stepping into a new phase of expansion.

Guangdong's sustained economic growth not only is closely connected with the upturn of the global economy, but also is the result of a variety of policies and measures of deepening reform and promoting development formulated by both the central government and the provincial government.

It is features with the following items. First, the innovation of systems is quickened in Guangdong. Our market environment becomes better and the basis of self-growing economy is further consolidated. Second, the industrialization is remarkably improved. Guangdong has stepped into the phase of quickening heavy industrialization, which indicates that the whole economy is in the new growth period. Third, the urbanization was obviously accelerated. Guangdong attract s the essential factors of production at home and abroad in an all-round way, including capital, technology and talents. These put a strong impetus to the new expansion of our economy. Fourth, the external economic level is continuously promoted and the internal economy is accelerated. The room for economic development is expanded and the whole economic strength grows.

In terms of the development trend, there are more favorable factors though some problems still remain in economic performance. Analyzed by domestic factors, the economic expansion is just started and the economic growth is in the upturn period. The central government strengthens the macro-adjustment and control, and basically maintains the continuity and stability of macro-economic policies. The implementation of the scientific concept of development guides us how to solve the existing problems and plays a positive role in achieving a sustained and healthy economy. Analyzed by the international environment, the better economic performance in US and Japan at the beginning of 2004 and the fairly stable global economic environment are all favorable to Guangdong's development. Based on these factors, a quick growth in Guangdong's economy will be expected in the next phase.
Fully affirming the good economic performance, some new problems emerging from the quick growth should not be neglected. The shortage of electric power supply is worsening. In the first quarter, a total of 22,881 electricity transmission lines have been controlled to supply in Guangdong, 17.7 times more than the same period of the previous year. High price level is seen in some of the upstream products and basic products. The purchasing price index of raw materials, fuels and power was 108.3. The prices of grain and oil (or fat) grew by 13.4 per cent and 19.8 per cent respectively. Obvious rise was also found in the price of agricultural means of production with a growth of 4.7 per cent. These indicated that the supply of some basic products and industries was tightening. The structural problems are prominent. The growths between the secondary industry and the tertiary industry are unbalanced and the growth of consumption is well behind that of investment. The macro-adjustment and control confronts new test.

To maintain a quick, sustained and effective economic growth, the concept of putting people first should be established. Less attention should be put on those macro-indicators like GDP growth. We must work hard to expand the employment and promote the consumption growth. The scientific control must be implemented. The supply of farm product s need be increased. More measures should be taken to prevent the duplication of low-level construction. We should make full use of the development opportunities, accelerate the restructuring and sharpen the industrial competitiveness. The sustained confidence and deepening of reforms will promote the development. Focus ought to be given on export-oriented economy and ensure the sustained growth of export. It is very important to realize the scientific concept of development into the concrete economic life and try to solve the existing problems. Only in this way can a coordinating, all-round and healthy economy and society be promoted.

Editor: Wing