"There are more banks than grain stores on the streets." This traditional Cantonese saying is an accurate depiction of modern-day Guangdong, where financial service businesses are enjoying a big boom, especially with local real estate and stock market rallies. Besides financial services, other modern service sectors, such as exhibition and logistics, are also expanding rapidly. Last year, Guangdong's service economy produced over 1 trillion RMB and became one of the most energetic sectors pushing Guangdong's overall development forward.

The evolution of an economy from one dominated by manufacturing industries to one dominated by service industries is natural. Guangdong cannot always rely on its cheap labour and high resource cost in boosting its economic growth. Research discovered that with the old growth mode, Guangdong's sustainable development resources peaked in 2005. Developing the service economy is one of the must-dos to earn the province a stand in the world's future competition. From 1979 to 2005, the contribution of the service economy to Guangdong's total output jumped from 24 to 44 percent, far above the increase of its manufacturing economy.

"GOLDEN SHELL"

In February this year, Guangdong Governor Huang Huahua said the province would accelerate the development of its tertiary industry, especially in product-ion service industries.

There are three essential elements for a region to develop production service industries. They include: geographical advantages, resource allocation and human resources. Guangdong, especially the Pearl River Delta region, has all three. This city cluster, with Guangzhou as its core, is described by economic experts as a "golden shell" breeding a beautiful pearl - its production service industries.

Currently, logistics, exhibition, telecommunications and culture are the top four high-value-added service economies of the province. In the exhibition industry, there are on average three exhibitions held in the province simultaneously every day, and the industry is expanding at an annual rate of over 20 percent, with the Canton Fair, SMEs Fair, Zhuhai Airshow, Shenzhen's Hi-tech Product Fair and Culture Fair gaining more international fame and influence.

As the lead of the modern service economy, the financial service industry won unprecedented support from the provincial government, which set up a special fund and input 50 million RMB every year to stimulate the industry's development. Shenzhen has put innovation of financial services at the top of its list in the service industry development and Dongguan's e-financial pro-ducts are experiencing rapid expansion. These new moves in financial services have started to help Guangdong's SMEs in corporate financing and other aspects.

IMPROVING TRAFFIC SYSTEMS

To stimulate the development of the production service industry in its city cluster, Guangdong government spent much of its effort to improve traffic systems, including road and rail network, waterways and ports, as well as airports.

The Guangzhou Baiyun Airport will become a regional aviation hub, receiving 80 million passengers and handling 4 million tons of cargo in 2010. FedEx's Asian Pacific Transfer Centre are under construction and will be put into use next year, adding 600,000 to 800,000 tons of cargo throughput to the airport. Expert predicts that the FedEx project will bring Guangdong a direct output of 13 billion USD, and in 2020 the output will jump to 74 billion USD.

Guangdong is developing its petrochemical industry in its costal area and uses the Pearl River waterways to develop inland and cross-ocean cargo transport. In 2006, Guangzhou and Shenzhen ports handled over 475 million tons of cargo together. Guangdong and Hong Kong have cooperated to become the world's biggest port cluster.

Nine rail projects, with an input of 139 million RMB, are under construction. By 2020, Guangdong will extend its railway to over 4,000 km. The Guangzhou-Wuhan passenger railway will be put into use in 2010, shortening the rail journey between Guangzhou and this strategic inland city to just four hours. An "A" shape light rail will connect some cities in Pearl River Delta by 2010, and the network will then extend to cover all cities in the region and Hong Kong and Macao. The network is expected to stimulate another round of talent flow and development of logistics, business, industry, living environment and real estate within the region. 

Editor: Yan