by
Mr. Gao Dianying
Director-general of Statistics Bureau of Guangzhou Municipality
January 25, 2005

Mr. Gao Dianying, Director-general of Statistics Bureau of Guangzhou Municipality,outlined the economic developments of Guangzhou in 2004.Guan Zhijian, director of Guangzhou Municipal Government News Office hosted the press.

Ladies and gentlemen, friends from the media,  

How are you? Today I am pleased to outline to all of you the economic developments of Guangzhou that took place in 2004. As we are approaching the Chinese Spring Festival, I want to take the occasion to wish you good health and a propitious year ahead.  

Guangzhou adopted technological development as our guideline, prioritizing growth as our foremost mission in 2004. We have thoughtfully implemented the national macro adjustment and control policy, our national economic expansion continuously and rapidly reached a healthy development stage, constantly demonstrating "speed, quality, quantity and efficiency co-ordination.''

Our economic growth took place in the following areas:

1. Rapid GDP expansion

Our initial computation indicated that our GDP broke through the RMB 400 billion mark to reach RMB 411.58 billion; the comprehensive economic strength reached a new stage and was 15 % over 2003, representing a growth of 15 percentage points in two consecutive years. The value of primary industry rose to RMB 11.5 billion, representing a growth of 5.4 % while the secondary industry rocketed to RMB 181.7 billion, representing a growth of 17.2 percentage points. The productivity value of third industry reached RMB 218.2 billion, a growth of 13.8 %. To sum up, the economic productivity of Guangzhou topped the other key cities in the nation.

2.  High-quality property structure continuously adjusted

In 2004, the ratio of Guangzhou's three properties was adjusted from 3.02: 43.13: 53.85 in 2003 to 2.81: 44.16: 53.03 while the ratio of secondary property rose 1.03 percentage point. The ratio of primary and third property dipped 0.21 and 0.82 percentage points. The primary, secondary and third industry that contributed to our economic growth was 1.12 %, 51.22 %, and 47.66 %. The economic growth was driven by the corresponding interplaying forces in secondary and third industry.  

3.  Economic growth helped quality to rise phenomenally

Firstly, revenue from tax income rose rapidly. In 2004, the city collected RMB 113.14 billion in tax, representing a rise of 17.7 percentage points against 2003. The figure included the national tax and local tax totaling RMB 77.6 billion and RMB 35.5 billion, representing a growth of 21.3 and 10.5 percentage points. The general budgeted income was RMB 30.2 billion, with a growth of 19.2 % against 2003, breaking the RMB 30 billion record.

Secondly, efficiency was benefited from enterprises. Our accumulated figures of 2004 showed that the comprehensive efficiency industrial index for Guangzhou's large-scale enterprises reached an all-time high at 191.43, a surge of 13.4 percentage points compared with the previous year. The comprehensive industrial economic index for China and state-owned enterprises was 302.55, higher than the city's average 111.1 points.

The city's large-scale industry realized profit tax at RMB 64.8 billion, a growth of 20.7 % while the profit reached RMB 39.4 billion, an increase of 23.1 percentage points.

4. A slow rise of consumer prices and a noticeable increase in production material prices

In 2004, the consumer spending in city rose 1.7 % compared with the previous year while the consumer price index rose 2.2 % and prices for service rose 0.8 %. Three out of the eight leading price index, including those for food, cigarette and beverage, household items and property rose 5.4 %, 2.5 %, and 2% respectively while the other five deceased. Due to the rise of production cost, the general peasant consumer price index increased to 5.3%. That included the living consumer price index, which rose 4.8 %. The productivity consumer price rose 8.7 %. Affected by the growing demand for production material, purchase price of raw materials, fuel and power carried on from 2003 to grow for 10 consecutive months until November and December when it started to decline. The purchase price of raw materials, fuel and power rose 11.7 % in the whole year.

Meanwhile, some of the production cost rose relatively higher than the others, the factory price from the city rose from the lowest point since 2001 and gradually edged up in the first 11 months despite slowly dropping in December. However, it rose 2.1 % in the whole year.

5. Agricultural production registered a steady growth consistently

In 2004, the city focused on implementing the spirit of the number one document issued from the Central Government. Agricultural production enjoyed a steady growth. The city realized agricultural production worth RMB 20.14 billion, a rise of 5.1%.

6. Industrial productivity rapidly grew while the trend for heavy industrialization became obvious

Firstly, we enjoyed rapid growth. In 2004, the newly added annual production value broke our record at RMB 100 billion, reaching RMB 104.3 billion. The city realized the total industrial productivity worth RMB 574.94 billion, a rise of 19.7%. The whole city's industrial production value recorded at RMB 162.7 billion, a surge of 18.6 %, representing the city's gross domestic productivity of 49.57 %.

Secondly, the productivity and growth of heavy industry outperformed the light industries. The productivity of light industry and heavy industry reached values of RMB 267.9 billion and RMB 306.9 billion, representing a growth of 15.1% and 23 %. The heavy industry grew faster than light industry by 7.9 percentage points. The ratio for light and heavy industry adjusted from the previous year of 50.5: 49.5 to 46.6: 53.4%, representing a breakthrough in Guangzhou's industrial restructuring and marking a success and a new era for industrialization.

Thirdly, strong productivity prevailed in our pillar industry. Large-scale electronic product manufacturing, automobile manufacturing and petroleum manufacturing formed the three pillar industries that contributed to a productivity value worth RMB 223.4 billion, a rise of 35.4%. That included productivity value of electronic product manufacturing, automobile manufacturing and petroleum manufacturing at RMB 67.8 billion, RMB 62.9 billion, and RMB 92.6 billion, representing a growth of 46.8 %, 31.5 % and 30.7 % respectively. The productivity value of automobile parts recorded RMB 6.1 billion, a growth of 41.9 %.

Fourthly, high-technological industry expanded rapidly. In 2004, the city produced a high-technological product value of RMB 143 billion, a surge of 34.5 %, growing faster than the whole city's industrial productivity by 14.8 percentage points, representing the whole city's industrial productivity 24.9 % and a rise of 1.6 percentage points.

7. Third industry maintained rapid development.

Firstly, the wholesale-retail trade moved in a fast pace while the consumer market continued to be active. In 2004, we have 1,108 commodities trading markets, a rise of XX from the previous year. The consumer spending at the retail level reached RMB 167.5 billion, a rise of 12.1 %, representing an increase of 3.1 percentage points from the previous year. That included a growth in trade by 13.8 % and restaurants at 6.6 %.  The total of commercial good sales reached RMB 517.8 billion, a rise of 22.7 %.

Secondly, transportation grew fast. In 2004, the city's goods turnover stood at 348 million tons, a rise of 18.9 % and 16 percentage point over 2003. Freight turnover was 274.6 billion tons per square meter, a growth of 9.5 % while passenger traffic capacity was 346 million person times, a rise of 16.4 % and 14.8 percentage points against 2003. Passenger turnover was 55.1 billion times per square meter, a rise of 22.3 %. Cargo throughput at ports turnover was 234 million tons, a rise of 22.4 %, including container volume turnover, at 3.7 million, a growth of 12.7%. The income from post and telecommunications was RMB 21 billion, a rise of 14.3%, including RMB 1.1 billion from postage income, a rise of 6 %, and RMB 20 billion from telecommunication income, a rise of 14.8%.

Thirdly, growth from the financial sectors remained steady. At the end of 2004, the balance of deposits (RMB and Foreign exchange) in banking institutions was RMB 1,032 billion, representing a growth of 10.2 % from the previous year. The balance of deposits (RMB and Foreign exchange) of urban and rural residents was RMB 475 billion, a growth of 12.1 % from the previous year. The balance of loans (RMB and Foreign exchange) in banking institutions was RMB 720 billion, a rise of 10 % from the previous year. That included the middle-and long-term loan balance valued at RMB 398 billion, a growth of 18.5%.

Lastly, there was strong development in tourism. In 2004, we have realized an income of RMB 54.70 billion from tourism, a growth of 20.2%. The city received 2674.1 thousand overnight tourists, a rise of 12.1%. Among them, we have 4371.5 thousand oversea tourists, a growth of 20.6%.

8. High-quality structure for fixed asset investment while renewing the city's infrastructure.

Firstly, under the direction of national macro control and adjustment, fixed asset investment maintained a healthy growth and the structure continuously improved. In 2004, the fixed investment asset was RMB 132 billion, a growth of 12.5 %. That included investment for basic infrastructure, standing at RMB 62 billion, a rise of 36.8 % and investment for renewal was RMB 16 billion, a drop of 12.8 % and investment for property RMB 44 billion, an increase of 5.1 %. The ratio of Investment for basic infrastructure, city renewal and property development to the total investment on fixed asset shifted from 38.7%, 15.7% and 35.7% in 2003 to 47.1%, 12.2% and 33.3% while the investment ratio for primary, secondary and third industry in 2003 was adjusted from 0.12:19.28:80.60 to 0.23:23.88:75.89.

Secondly, property sales rose. As for the property market, in 2004, the trading floor space in the city was 19.69 million square meters, a rise of 20.2%, including commercial property and secondhand property at 11.2 million square meters and 8.47 million square meters, representing a growth of 7.2% and 43.4%. Property trading was RMB 78.96 billion, including commercial and secondhand property at RMB 56 billion and RMB 22.9 billion, an increase of 26.2 % and 43.4 %. By the end of 2004, the vacated floor space stood at 6 million square meters. It was the lowest in the recent 4 years.

Thirdly, there was a huge success in our key development projects. The phase-one project of Guangzhou Higher Education Mega Center, phase one project of Guangzhou Baiyun International Airport and the four 500,000-ton berths in the phase one project of Nansha branch of Guangzhou Port, the completion of Nanzhou Water Works and the commencement of Guangzhou Nansha expressway at the end of the year, no. 3 Guangzhou Metro line project and Guangzhou Science City proceeded with great success.

9. Exports reached a historical high and its structure was improved.

Firstly, the development was fast. In 2004, the exports and imports of the city's foreign trading stood at US $ 44.79 billion, a rise of 28.2%, including US$ 21.47 export value, a rise of 27.1%, representing a historical record since 1994. The import value was US$ 23.3 billion, an increase of 29.2%.

Secondly, the trade structure for exports improved. As the city was moving towards a high level of manufacturing processing and value added products, export of electronic product stood at RMB 10.46 billion in 2004, a rise of 34.9%, representing 48.7% the overall export to foreign countries, a rise of 2.8 percentage point from the previous year. The export value of high-technological products reached RMB 4.3 billion, a surge of 58.7%, representing the total export worth of 20.1%, a rise of 4 percentage point against 2003.

10. The trend of increased foreign investment was heartening and quality was improved.

In 2004, the city had attracted US$ 2.4 billion from foreign investors, a growth of 64.4%; contracts with foreigners reached US $ 3.2 billion, an increase of 25.6%, including 1046 contracts with foreign investors and a rise of 20.2%. Until now, investors from more than 70 foreign countries and regions have established 7933 foreign corporate in Guangzhou. According to the incomplete statistics, 127 out of the top 500 international companies had made their homes in Guangzhou. Developments in international investment were as follows:

Firstly, there were large projects with serious investment. We had recorded 160 investment projects over US$10 million, representing 15.3% of newly approved projects, a growth of 4 percentage point from the previous year. Foreign contracts represented 53 % of all contracts in the city, that included 13 projects under the category of expansive investment at US$10 million, representing 20 % investment at US$10 million and contracts with foreign investment at 21%.

Secondly, investment extended to the manufacturing industry, especially those in the pillar industries. The foreign investment involved in the three pillar industries reached 2.8 times, representing 28.1 % of the city's foreign investment. Automobile manufacturing increased by 4.6 times and which accounted for 11 % of the city's total foreign investment.

11. Employment rate rose and there were better living standards

At the end of 2004, people working in the city was 3.08 million, a growth of 11.2% while the registered unemployment rate was 2.42%, a drop of 0.28 percent points from the previous year, the lowest level in the last five years. 

In 2004, the annual wage for working people per person in average was RMB 30,807, a rise of 9.1 %. The average rate for rural people was RMB 16,884, an increase of 12.5%. Average spending per head was RMB 13,121,a rise of 13.4%. The annual average income of a peasant was RMB 6625, a rise of 8.1%, breaking the record of 1997. As the earning power of the people became more robust, the spending ability strengthened.  

Firstly, the general household expenditure related to service consumption was gradually expanding in the city. In 1998, the GDP (gross domestic productivity) reached US $3000 per head; the spending on consumer items constituted 25% of the all commodities relation consumption index. In 2002, the GDP came to US$5000 per head and the spending took up 33.8%. As we hit our GDP to US $6000 per head in 2004, the average spending per head was 35.5%. In 2004, it was 38.3% in the computation of Engel's Coefficient of the Urban Resident theory, a drop of 0.7 percentage points compared in 2003.

Secondly, spending on automobiles and travel slightly heated up. In 2004, we recorded the automobile turnover from retail sales of the large-scale trading companies in the city increase 30.8% against a year ago. The number of automobiles owned by the residents in the city. The spending on educational, cultural and entertainment rose 17.8% against 2003.

12. Full-scale development for all social events and living standards improved.

In 2004, we achieved great success in the area of education, technology, culture, health and sports. The project for rebuilding mini-schools has been completed. The investment and construction of 12 out of 24 model secondary schools have been finished. The phase one project of Guangzhou Higher Education Mega Center was completed in September 2004, taking in 42,000 teachers and students from10 secondary schools. According to the theory "the competitiveness of a city is ultimately based on its culture,'' we built the city in the direction of strong culture and pushed forward with blossoming of cultural events and business.

We organized a series of important cultural exchange programs and events, namely the Guangzhou International Arts Fair, Ram City International Canton Drama Festival, International Vocal Music Contest, Guangzhou International Ballet Contest, International Costume Cultural Festival and Chinese Drama Festival to demonstrate the charm and charisma of Guangzhou.    

In the 28th Olympic Games, our athletes won two gold medals, one sliver medal, and a third runner-up place, which ranked the first in the provincial capitals. In July 1, 2004, the city also won the bid for the 2010 Asian Games, showing our comprehensive strengths.  

Guangzhou also made major strides in building a healthy and sanitary city as we improved the natural eco-environment. Our city met five requirements of the national standard for a healthy and sanitary city. In September 2004, the Provincial Patriotic Sanitation Committee had recommended to the National Patriotic Sanitation Committee that Guangzhou be declared a city of sanitation at the national level. We were preparing to build Guangzhou into a model City of Sanitation and City of Civilization at the national level.

In building up the software for the environment, we had implemented stiff measures for construction of infrastructure, enforcing a project of "Security and Reliability,'' with an aim to develop an economy with system, fair trade, competitiveness and a standardized environment. We valued public security and strove for a safe and crime-free society. In 2004, we recorded 111,745 criminal cases, a drop of 3.8%. The crime-solving rate was 32.13%, an increase of 2 percentage points.

According to the above report, we had an overall good economic environment in 2004 as we entered a new era. Thanks to the leadership of Municipal CPC Committee and Municipal Government, the good year was also a result of the hard work of all working people, internal economic growth and the domestic and international economic environment. We would like to sum up the good results in 2004 from the following factors:

Firstly, Guangzhou now closely matched the direction from the national macro adjustment and control; the city increased its motive force of economics and ability of resisting fluctuations. In the last few years, we learnt from the changes of properties that our success was the result of implementation of scientific development and of listening to the rhythm of objective economic development and national economic policy. We had studied our internal characteristics, adjusted our properties in the direction of development and met the requirements of the national macro adjustment and control, synchronizing our efficiency with needs for economic growth.

This was evident in the speedy development of three pillar properties, contributing both to the industries as well as the city economy in general. These measures and its efficiencies created a milestone for the economic benefits circle, injecting a powerful stimulus with which the city resisted economic-fluctuation. Comparatively speaking, only a limited number of industries were under the categories of restriction according to the macro adjustment and control policy. The effect of the macro adjustment and control policy had therefore less impact in the city.

For long-term growth, economic development was generated from "investment first'' to change of "mutual movement of investment and spending.'' To cope with the change of the macro adjustment and control policy, we maintained a growth of investment while we paralleled the growth with a slight expansion on consumer spending.

As large-scale investment slowed down, the needs for consumer spending pushed our growth upward. In 2004, the difference between fixed-asset investment and consumer spending at retail level was adjusted from 7.4 percentage points in 2003 to 0.4 percentage point. The gap between the consumer spending rate and the investment rate since 2000 became wider.

Capital investment for high-quality property was protected. In 2004, industrial loans took up 40% of the short-term loans in RMB in the national banks in the city, helping foreign investments move to the pillar industries.

In the view of reform from the overall perspective, non-public and mixed economic sectors developed steadily which further promoted the growth of the economy.

Regarding industry, foreign businesses together with Hong Kong and Macau investors took up 25.7% of our productivity growth, representing 63.1% of the overall growth in the city and 3.3 percentage points from the previous year. Privately owned enterprises represented of 22.5% of the overall productivity output in the city. Our exports resulted from joint ventures, and individual and privately owned enterprises rose 34.9 % and 1.2 times, representing the city's overall productivity value at 62.7% and 6.4%, a rise of 3.6 percentage points and 2.8 percentage points compared to 2003.

Secondly, economic growth moved toward an intensive economy. Reading from the scales of the industries, it is obvious that contributions from key industries rose and economy of scale was noticeable. In 2004, large-to-medium scale industries completed productivity valued at RMB 341.2 billion, a rise of 25.9%, representing an average growth of 6.2 percentage points in the city, taking up the overall productivity valued at 59.3%, a rise of 3.3 percentage points from 2003. Support from the large-scale industries gave rise to the general profit in the city. In 2004, the city's large-to-medium industries reached RMB 33.29 billion, constituting the city's large-scale commercial profit of 84.4 %, a rise of 1.3 percentage points from 2003. Retails under the categories of limited wholesale and retail were valued at RMB 42 billion, a rise of 20.2 %, higher than the city's average at 8.1 percentage points.

We recorded a downtrend movement of spending of RMB 10,000 in the comprehensive GDP energy consumption from 1996 and 2004. In 1996, it was 1.19 tons for standard coal/per RMB10,000 and it was 0.8 tons for standard coal/per RMB10,000 in 2003. It meant that in every RMB10,000 spending, 0.39 tons of standard coal were saved from 1996 to 2003, representing a saving rate of 32.77% and an annual saving rate of 3.61%.

From the view of contribution of science and technology to the economic growth, the factor of science and technology played a crucial role. Between 1996 and 2003, technological advances were a key to economic expansion, increasing from 42.6% in 1996 to 50.10% in 2003. High-technological advances propelled the overall industrial productivity output yearly from 6.5% in 1996 to 24.9% in 2004.

However, we did have some outstanding problems in our economic development in 2004. Resource management was at a bottleneck. For example, we had tight supply in electric supply while prices of raw materials continued to climb. In regard to electric supply, the Municipal CPC Committee and Municipal Government had paid attention and adopted a series of effective measures to deal with the issues. With the national macro adjustment and control policy, the rising trend of prices of raw materials had stalled. In addition, we were aware that the pace of development of privately owned enterprises had also slowed and the pay gap between rural and city residents had widened, causing concern.

In short, we believe we are heading toward strong growth in 2005; that will not change. In terms of three major needs, exports may slow down while investment and consumer spending continue to maintain a steady growth

Editor: Olivia