In 2003, the people of Guangdong stood united to fight against SARS and continued the economic development. The SARS impact was effectively dispersed. New achievements were made in economic construction and social development. The year saw a quick growth in national economy with a record high in recent years. The economic structure, efficiency and quality were also improved. Guangdong's economy obviously stepped into a new cycle of expansion. Preliminary statistics showed that the gross product value of Guangdong was 1, 344. 99 billion yuan, up by 13.6 per cent or 1.9 percentage points higher than the previous year. Of this total, the value-added of the primary industry grew by 1.2 per cent; that of the secondary industry grew by 10.8 per cent, and that of the tertiary industry grew by 10.8 per cent. The main features of the economic performance came as follows:

Firstly, the agricultural production steadily developed.

The gross output value of agriculture of 2003 would be expected to reach 177.53 billion yuan, up by 1.8 per cent. The sown areas of farm crops were 70,127,400 mu, down by 2.7 per cent. Rapid growth was registered in the staples among farm products such as vegetables, melons, medicinal plants, flowers and aquatic products, etc. However, slight decline was seen in the sown areas and outputs of grains, canes, oil-bearing crops and tobacco, etc. And the number of livestock was fewer than before due to the impact of SARS.

Secondly, the industrial production maintained good momentum.

The value-added of the industrial enterprises above designated size reached 560.63 billion yuan, up by 21.9 per cent or 6.9 percentage points higher than the previous year. The dominating role of industry to the national economy was further promoted. The industrial sector contributed 67.1 per cent to the total GDP growth, or 9.2 percentage points to push forward the economic growth with an increase of 2.6 percentage points over the precious year.
New progress was made in the restructuring of industry. The trend of heavy and chemical industry became further obvious. The year saw a 25.0 per cent growth of the value-added of the heavy industry, 6.2 percentage points quicker than that of the light industry. The rising pillar industries kept a good momentum. The equipment industry rapidly increased. The gross industrial output value of three sectors including electronic information, electric equipment and machinery, petroleum and chemicals topped 1,065.71 billion yuan, an increase of 30.5 per cent, taking up 50.7 per cent of the total value of the industrial enterprises above designated size. The output value of these three sectors contributed 66.5 per cent to the growth of industry. Significant development was achieved in the private economy. The gross output value of the private industrial enterprises above designated size was 424.85 billion yuan, up by 29.9 per cent over the previous year.

The economic efficiency of the industrial enterprises continued to turn for better trend. The January--November period of 2003 witnessed a 150.7 of the overall economic efficiency index for the industrial enterprises above designated size, 10.6 percentage points higher than the same period of 2002. The growth speed of the sales revenue of industrial products was accelerated. The total profits maintained a fairly high increase. During this period, the sales revenue of the industrial enterprises grew by 20.8 per cent and the total profits grew by 34.8 per cent, representing an increase of 4.9 percentage points and 11.6 percentage points respectively.

Thirdly, the investment in fixed assets showed a rapid growth.

The investment in fixed assets totaled 498.89 billion yuan, up by 26.5 per cent. Of this total, the investment in capital construct ion and technical updating and transformation increased by a large margin, with the cumulative investment completed reaching 189.89 billion yuan and 63.43 billion yuan, up by 40.4 per cent and 24.1 per cent respectively. Smooth progress was made in the Ten Projects. Among the 125 subprojects determined at the beginning of the year 2003, a total of 119 projects were started, with 70.5-billion-yuan investment completed. Under the adjustment of policies, the investment in real estate development showed an obvious slowdown, with the cumulative investment completed coming to 120.99 billion yuan, up by 8.3 per cent, or a decline of 10.3 percentage points compared with the same period of the previous year. Fast growth was achieved in the investment made by the non-state economy, with its completed investment topping 347.61 billion yuan, up by 26.5 per cent or 2.8 percentage points quicker than the investment made by the state economy. The proportion of the non-state investment was 69.7 per cent of the total investment compared with the 69.2 per cent of the previous year.

Fourthly, the sales in the domestic market smoothly developed and the market prices slightly went up.

In 2003, the retail sales of consumer goods were 558.72 billion yuan, up by 11.4 per cent over 2002. Fairly quick growth was registered in the wholesale and retail trade above designated size, with its retail sales growing by 32.8 per cent. And the retail sales of automobiles, communication equipment, household appliances and audio-video equipment grew at a fast speed, up by 46.6 per cent, 14.1 per cent and 26.7 per cent respectively.
The market prices showed an upturn by a slight margin. The general consumer price index was up by 0.6 per cent, of which the consumer price indexes of urban residents and rural residents grew by 0.7 per cent and 0.4 per cent respectively.

Fifthly, the foreign trade and the utilization of foreign capitals grew significantly.

Under the promotion of the entry into WTO, the depreciation of US dollars and the upturn of domestic demand, Guangdong's imports and exports kept fast growth. In 2003, the total value of import and export reached 283.64 billion US dollars, up by 28.3 per cent over the previous year. Of this total, the value of export was 152.94 billion US dollars, up by 29.1 per cent or 4.9 percentage points higher than the growth rate of the year 2002, and that of import was 130.70 billion US dollars, up by 27.3 per cent. A total of 22.24-billion-US-dollar surplus was realized. The export structure continued to be optimized. Tremendous growth was registered in the export of mechanical and electrical products and high-tech products. The export of mechanical and electrical products increased by 37.3 per cent, and the export of high-tech products dominated by IT products grew by 55.5 per cent.

Rapid growth was achieved in the utilization of foreign capitals. In 2003, the contracted foreign capitals totaled 24. 47 billion US dollars, up by 29.5 per cent, and the foreign capitals actually utilized reached 18.94 billion US dollars, up by 14.2 per cent on a year-on-year basis. Of this total, the foreign direct investment came to 15.58 billion US dollars, up by 18.8 per cent.

Sixthly, the transportation and tourism basically returned to the normal level.

During the SARS period, Guangdong's transportation, tourism, catering and other sectors were greatly affected. The first half year of 2003 witnessed a decline of 8.8 per cent and 0.5 per cent in the volume of passenger traffic and freight traffic respectively. In the third quarter, the transportation and tourism gradually began to recover. Their operation returned to the normal level in the fourth quarter. In the single month of December, the volume of passenger traffic and freight traffic grew by 2.6 per cent and 3.4 per cent respectively. The total volume of passenger traffic in the whole year of 2003 reached 1.82 billion persons, a year-on-year decrease of 3.4 per cent with an obvious narrowing decline range compared with the first half year; and that of freight traffic was l.40 billion tons, an increase of 2.5 per cent. A gradual recovery was also found in the catering industry with its retail sales totaling 88.76 billion yuan, up by 7.0 per cent.

In the second quarter of 2003, tourism was most affected by the SARS epidemic. After the third quarter, tourism and the relevant industries showed a quick recovery. The number of tourists staying overnight was gradually growing. From July to November, some 40,086,100 tourists stayed in Guangdong for at least one night, keeping a year-on-year close level with the previous year (a total of 41,286,600 tourists). Inland tours and exit tours stepped into the recovery track. During the July-November period, a total of 3,326,200 tourists participated in the package tours to the domestic scenic spots and a total of 656,100 tourists went abroad through travel agencies, up by 20.2 per cent and 20.0 per cent respectively on a year-on-year basis.

Seventhly, an obvious upturn was seen in the economic climate and certain growth was registered in the incomes of residents.

In the fourth quarter, the entrepreneurs' confidence index and the business climate index maintained the upturn momentum on the basis of greatly rebounding trend of the third quarter, representing 135.7 and 139.3 respectively, or up by 3.8 points, 10.2 points and 3.8 points, 8.7 points compared with the third quarter of 2003 and the same period of 2002.

In 2003, the per capita net income of rural residents was 4,054.58 yuan, up 3.6 per cent or a real growth of 3.4 per cent year-on-year if price factors were excluded. Of this total, the rapid growth of the per capita wages income was the main contributor to the growth of the farmers' income, taking up 48.5 per cent of the per capita net income. The per capita disposable income of urban residents was 12,380.43 yuan, up 11.2 per cent or 2.1 percentage points higher on a year-on-year basis.

In sum, rapid progress was made in Guangdong's industrial production, investment in fixed assets, imports and exports and utilization of foreign capitals. The industrial structure was further optimized. The quality of economic performance was promoted. And the self-growing impetus of micro-economy was strengthened. A good anticipation was hold by both investors and consumers. These favorable factors indicated that Guangdong's economy would step into a new phrase of expansion.

Prospecting for the economic development of 2004, there are more favorable factors than unfavorable ones though some uncertainties still remain in economic performance. In terms of the international environment, the moderate recovery of the global economy is favorable to the export-oriented Guangdong's economy. In terms of the domestic environment, favorable factors come as follows: First, based on the current upturn of economic development, the potential of economic growth will be further tapped and brought out. Second, a new cycle of hot points for consumption has been established such as automobiles, telecommunications products and housing, which will bring about a great impetus to the economic development. Third, the opening of the 16th CPC National Congress and the 3rd Plenary Session of the 16th CPC Central Committee are accelerating the pace of reform and opening-up. The market environment and systematic preparation for the economic growth are further improved. Fourth, with the better understanding of the WTO rules, we find that the positive effects of the entry into WTO further emerge. Fifth, there are still other factors to push forward our economy. For example, CEPA will surely make our relationship with Hong Kong and Macro much closer, which can promote the integration pace of the Pearl River Delta and eventually strengthen the regional competition. Moreover, Guangdong's quick development will also depend on the implementation of new industrialization, construction of a Cultural province and strategy of regional coordinating development. All in all, Guangdong's economy of 2004 will still keep good momentum. The gross product value of Guangdong for the whole year will be expected to maintain a two-digital growth.

Fully affirming the better trend of the overall economic performance, some problems remaining in the quick growth of the current economy should not be neglected, which include: the prominent problems concerning agriculture, rural areas and farmers besetting Guangdong's economic development for a long term, difficulties in increasing farmers' income, arduous task of economic restructuring, trade protectionism hindering further growth of export, unbalance in regional development, over-heating in some fields, certain shortage of part of basic industries and supply of energy, and the possibility of new impact by sporadic cases of SARS. The above-mentioned problems should be solved in the process of development.

In order to achieve a more desirable result of the economy of 2004, continuity and stability of policies should be kept in macro control. It is important to follow the trend of development and make full use of the positive market factors. Always keeping clear-headed, we should further strengthen the sense of urgency about lagging behind, i.e. pursuing runners are examples and rivals are teachers. Only in this way, can we seize the opportunities to quicken the development. A scientific development concept should be established. Strictly adhering to the Five overall Planning, we should enhance the weak links and solve the existing problems to ensure a sustained, fast, coordinating and healthy economic development and overall progress of the whole society.

Note: According to the regulation of the National Bureau of Statistics, Guangdong's GDP will be replaced by the gross product value of Guangdong as of 2004.

Editor: Wing