Consumption has replaced investment as the most powerful engine for Shenzhen's economic growth in 2009 for the first time since 1979, the People's Daily reported Monday (March 15).
Quoting a report by the China Development Institute (CDI), the paper said a new engine for economic growth had started in Shenzhen.
Export and investment have long been the main driving forces of Shenzhen’s economic growth. In 2009, although exports shrank amid the global financial crisis, the city's gross domestic product (GDP) grew 10.7 percent year-on-year in 2009, two percentage points higher than the national GDP growth.
Domestic consumption contributed to 40 percent of GDP in 2009, with the total volume of retail sales increasing by 15.4 percent over the previous year, according to official statistics.
"The change in the development mode is taking effect," said Deng Ping, director general of the city's statistics bureau.
Shenzhen had taken various measures to change the development mode and boost consumption in 2009, such as improving infrastructure and social security, and encouraging innovation.
Nearly 80 percent of the 170.9-billion-yuan (US$25 billion) government investment was spent on projects aimed at improving people's livelihoods and well-beings. A total of 10,293 affordable apartments are being built at a cost of 4.8 billion yuan. Eight Metro lines are being built to connect suburban Bao' an and Longgang districts to the city center. This boosted housing sales in the two districts.
In 2009, Shenzhen raised the basic monthly pension of 146,000 enterprise retirees by 227 yuan and there were plans to raise the minimum wage. In early 2010, the social security scheme began to insure migrant workers against unemployment.
Products of innovative companies were attracting more consumers. Four Shenzhen companies including Huawei, ZTE, Tencent and BYD, were the top four among the 30 Most Innovative Companies in China in 2009.
Shenzhen still had much to do to boost consumption, however. As a city with the highest per capita GDP among Chinese mainland cities, Shenzhen's total retail sales and per capita retail sales still lagged behind Shanghai and Beijing, the report said.
