Officials of Guangdong at the briefing

This year (2003), the overall economy in Guangdong sees an obviously fast growth under the earnest implementation of various tasks of the central government and the State Council and the effective dispersal of the SARS impact by the Guangdong Provincial Party Committee and People's Government. Preliminary statistics indicated that the gross domestic product (GDP) of the first nine months reached 930.20 billion yuan, an increase of 13.0 per cent or 2. 5 percentage points higher than that of the same period of last year (2002). Of this total, the value--added of the primary industry was 63. 51 billion yuan, down by 0. 5 per cent; that of the secondary industry was 496.02 billion yuan, up by 17.1 per cent; and that of the tertiary industry was 370.67 bi11ion yuan, up by 10.5 per cent.

The main features in Guangdong's economic performance included:

Firstly, the agricultural production showed an upturn with a smooth performance. Since this year (2003), the overall situation in agricultural production has been in a low growth level. In terms of the development trend, the decline rate touched the bottom in May and saw a rebound in June with a gradually narrowing decline range. During the January--September period, the gross agricultura1 output value kept the same pace with the previous year.

Secondly, the industrial production maintained good momentum with a continually better efficiency. From January to September, the value--added of the industrial enterprises above designated s lie was 388.71 billion yuan, representing a growth of 20.8 per cent or 7.0 percentage points higher than the same period of the previous year. Further growth was achieved in the heavy industry, with its value-added increasing 23.8 per cent, or 1.8 percentage points higher than that of the first six months of this year. And its supporting role to the growth of industry was strengthened. In this period, the gross industrial output value of four sectors took up 45. 9 per cent of the total of the industrial enterprises above designated size, with their output value up by 30. 3 per cent over the first nine months of last year. The four sectors included chemical raw materia1s and chemical products manufacturing, transport equipment manufacturing, electric equipment and machinery manufacturing, telecommunications computer and other electronic equipment manufacturing.

Bo xinmin, Director General of Guangdong Provincial Bureau of Statistics reads the economic report at the briefing.

The economic efficiency of the industria1 enterprises continued to turn for better trend. The January--August period witnessed a 147.0 of the overa11 economic efficiency for the industria1 enterprises above designated size, 12.5 percentage points higher than the previous year. Fast growth was registered in the sales revenue of industrial products and the total profits. In the first nine months of this year, the sales revenue of the industrial enterprises grew by 22.1 per cent and the total profits increased by 36.6 per cent, representing a growth of 7.7 percentage points and 17.8 percentage points respectively.

The dominating role of industry to the nationa1 economy was further promoted. The industrial sector contributed 67.5 per cent to the total GDP growth, or 8.8 percentage points to push forward the economic growth with an increase of 3.0 percentage points on a year--on--year basis.

Thirdly, fast growth was kept in the investment in fixed assets. In the January--September period, the investment in fixed assets totaled 305.67 billion yuan, up by 29.0 per cent, or 11.7 percentage points higher than the first nine months of last year. Of this total, the investment in capita1 construction and technical updating and transformation registered a tremendous growth, with the cumulative investment completed reaching 112.57 bi11ion yuan and 35.93 bi11ion yuan, up by 42.9 per cent and 34.1 per cent respectively. Under the adjustment of policies, the investment in rea1 estate development showed an obvious slowdown, with the cumulative investment completed topping 80.81 bi11ion yuan, up by 10.0 per cent, or a decline of 20. 0 percentage points compared with the same period of the previous year.

Fourthly, an upturn growth was seen in the retail sales of consumer goods with basically stable market prices. In the third quarter, the sales in the consumer goods market were brisk. In July, August and September, the retai1 sales of consumer goods grew by 12.5 per cent, 12.8 per cent and 13.0 per cent respectively. From January to September, the retail sales totaled 399.74 billion yuan, up by 11. 0 per cent year--on--year, or 0.6 percentage points higher than that of the first two quarters of this year. The catering industry was gradua11y recovering. In September, the retai1 sales of catering were up by 9.8 per cent compared with the same month of the previous year. The retail sales of catering in January--September period topped 62.93 billion yuan, up 6.7 per cent. Though this growth range dropped by 4.9 percentage points compared with the same period of 2002, it grew by 1. 7 percentage points over the first half-year of 2003. In this period, continued growth was registered in the retai1 sales of automobiles, telecommunications equipment, household electric appliances, audio--video equipment and furniture, representing an increase of 56.5 per cent, 27.9 per cent, 22.4 per cent and 10.1 per cent respectively. The consecutively low price level was ended. From January to September, the cumulative consumer price index rose a year-on year 0.3 per cent.

Fifthly, the imports and exports recorded another historical high and the utilization of foreign capitals grew significantly. Under the effect of the entry into WTO and the promotion of favorable factors like upturn of global economy, great growth was found in Guangdong's exports. The monthly export size created a record high. In the first nine months, the total value of import and export reached 200.93 billion US dollars, up by 25.8 per cent over the previous year, of which the value of export was 106.71 billion US dollars, up by 26.2 per cent and that of import was 94.22 billion US dollars, up by 26.6 per cent.

The utilization of foreign capitals maintained a fast growth. In this period, the foreign capitals actually utilized reached 12.66 billion US dollars, an increase of 16.9 per cent on a year-on-year basis. Of this total, the foreign direct investment came to 10.71 billion US dollars, up by 19.1 per cent.

Sixthly, a recovering growth was continued in transportation and tourism. The SARS outbreak brought about great impact on Guangdong's transportation and tourism. The third quarter witnessed a gradual recovery in transportation. In September, the volume of passenger traffic and freight traffic slightly exceeded that of the same month of last year, up by 1.5 per cent and 3.4 per cent respectively. In the first three quarters, the volume of passenger traffic reached 1.36 bi11ion persons, a year-on-year decrease of 5.3 per cent with an obvious narrowing dec1ine range compared with the first half year of 2003; and that of freight traffic was 1.04 bi11ion tons, an increase of 1.0 per cent.

Tourism was most affected by the SARS epidemic. In the third quarter, tourism and its relevant industries recovered quickly. The tourists from overseas returned to the normal level. In August, 7,217,600 tourists from overseas were received through Guangdong ports, up 2.7 per cent on a year-on-year basis. The tourists staying overnight were gradually growing. In September, 7,676,000 tourists were expected to stay in Guangdong for at least one night, keeping the same level with the same month of last year. Inland tours and exit tours restarted to come back to the normal track. In September, 511,000 Chinese were expected to travel in China and 92,000 Chinese would go abroad through trave1 agencies.

Seventhly, obvious upturn was seen in the economic climate and some growth was registered in the incomes of residents. In the third quarter, the entrepreneurs' confidence index and the business climate index rebounded to 132 points and 135.4 points respectively, up by 16.3 points, 14.9 points and 11.3 points, 5.6 points compared with the second quarter of this year and the same period of last year. The figures were the record high in the recent two years.

The income of rura1 residents grew. During the January-September period, the per capita cash income of rural residents was 2,931 yuan, up 5.6 per cent or a real growth of 5.7 per cent year-on-year if price factors were excluded. Of this total, the per capita income from the migrant farmers grew by 23.7 per cent and the per capita wages income increased by 17.2 per cent, playing the major role in the income growth. The per capita disposable income of urban residents was 9,411 yuan, up 11.0 per cent or 1.9 percentage points on a year-on-year basis.

All in all, Guangdong's industrial production was obviously accelerated. The market demand continued to expand. Quick recovery was found in the SARS-affected sectors. Abundant foreign capitals flew in. The conditions to support economic performance were optimized. Obvious upturn went to the economic efficiency of enterprises. Pr ices returned to the positive growth range. The economic climate obviously turned for better trend. These favorable factors indicated that Guangdong's economy might go into a new phrase of expansion.

Such hard-earned achievement s mainly benefited from the following factors:

First, the correct macroeconomic policies were formulated by the centra1 government and the provincial government in recent years. The correct decisions during the SARS period helped Guangdong's economy maintain a sustained and stable momentum. And the positive effects combined by the expansion of domestic market, active fiscal policy and sound monetary policy in these years made it possible for Guangdong's economy to go into a new cycle of development.

Second, the active effects made by the entry into WTO were further revealed. In the second year as a WTO member, Guangdong witnessed a fast growth of imports and exports and great momentum of foreign investment. Obvious decline was seen in the prices for some consumer goods including automobiles and telecommunications, which directly stimulated the consumption of residents.

Third, the over 20-year development since the reform and opening-up provided Guangdong with the abundant material base. A relatively perfect industrial chain and market environment were established. With the optimization of economic structure, the efficiency of overall economic performance was obviously strengthened, which greatly pushed the economy to step into the virtuous cycle.

Fourth, a series of major measures taken by the provincial CPC committee and people's government were playing active roles. This year, the provincial government put forward Ten Events and Ten Projects. A series of new policies were formulated to encourage non-State-owned enterprises and promote urbanization and the coordinated development of regions, which greatly pushed forward Guangdong's economy.

Fully affirming the better trend of the overall economic performance, some problems remaining in the current economy could not be neglected, which included: the relatives lowdown of agricultura1 production and negative increase of its value-added; the growth of consumption obviously lagging behind the growth of investment and exports; fairly big pressure from employment; and too fast increase of financial credits.

Reviewing the economic development of this year (2003) and next year (2004), Guangdong wi11 stand before a

Mr. Bo Xinmin receives interviews of reporters

basica1ly s table economic and social environment. Given the international environment, the overall economy is in moderate recovery. The economies in USA and Japan are better than expected. China, in a stable political situation, is also expecting a promising future. And the positive effects by the entry into WTO are further released. Such globa1 environment is favorable to Guangdong's economy. However, we cannot be neglected the facts that the unstable factors remain in global economy and politics, the pressure of RMB appreciation is growing and the trade frictions are possibly escalating. Considering the domestic environment, the main favorable factors include:

1. The policies from the central government will be basically stable, which also means no sudden stop or step on the policies in order to maintain the sustainability. And since the Third Plenary Session of the Sixteenth CPC, new breakthroughs should be made in the reform of economic system and will greatly promote the economic development.
2. The current economy is in an upturn period. Gaungdong's economy keeps good momentum in recent years. The potential of economic growth is further released and tapped with its self-growth dynamism continually strengthening. A new cycle of hot points for consumption has been established such as automobiles, telecommunications products and housing, etc.
3. Many positive factors are pushing forward the economic development. CEPA will surely bring Guangdong and Hong Kong closer than before, which is favorable to the integration of the Pearl River Delta to sharpen the regional competitiveness. Moreover, Guangdong's economy will be accelerated with the quickening promotion of market, internationa1ization, information and urbanization.
4. The successful fight against SARS has established a good image of China and Guangdong before the international society. The Linnan culture is in full bloom. The new Cantonese spin is fostering during the reform and opening-up are putting through and distilling to another new high. It will be a powerful impetus to accelerate the construction of modernization. However, the prominent problems in economic performance wi11 also continue to exist and hinder the economic expansion. Particularly speaking, the adjustment of the export rebate policy will bring some effects on the export-oriented Guangdong's economy like a decline of 3 percentage points in average tax rebate rate and the share of the rebate figures exceeding the base data by the central finance and local finance. And the possible rebound of SARS will also make a new impact on the economy.

Consulates in Guangzhou attend the briefing.

Based on the current economic performance and comprehensive consideration of various factors concerning production and demand and the quantitative analysis, a 13 per cent of GDP growth wi11 be expected for the whole year of 2 003.

In sum, the current economic speed is moderate. Guangdong should seize the opportunity to realize a quick, forerunning and coordinating development. Main points in recent policies are:

1. To quicken the development of rural economy. The infrastructure in mountainous areas and backward regions need be strengthened and fostered. Focus should be put to improve the investment environment in order to quicken the social and economic development. The po1icy of "more devotion, 1ess acquirement, flexibi1ity" should be firmly implemented to promote the agricultural industra1izat ion, accelerate the construction of small cities and towns and strengthen the capacity of cities to absorb the surplus rura1 laborers.
2. To expand consumption, push forward the development of non-State-owned economy and lessen the reliance on the government investment and international market. Efforts should be made to improve the consumption environment. The socia1 security system must be established and perfected. The income of residents should be increased to improve the consumption predication. New hot points for consumption ought to be fostered and expanded.
3. To update the international competitiveness of Guangdong's industry and explore a new industrializing path to quicken the construction of a powerful economic province. Under the increasingly fierce competition from the international market and the challenge from the Yangtze River Delta, Guangdong should be fully aware of its own weakness. The strategy of "revitalizing Guangdong through science and education" should be implemented to promote the optimization and updating of industrial structure and sharpen the internationa1 competitiveness of industry.
4. To actively involve itself in the internationa1 economic cooperation and competition. With the pressure of RMB appreciation and the adjustment of export rebate policy, Guangdong need quicken the innovation of its system, give aid to the advantageous enterprises to go abroad for resource exploration and expand the cooperation with Hong Kong, Macao and Taiwan.
5. To accelerate the development of the tertiary industry and foster new hot points for consumption to alleviate the pressure of employment. The construction of cultural industry must be quickened to promote the development of Guangdong's economy and society in an all round way.
6. With the strengthening of the winding-up of gardens and management of credits, the market system should be quickly constructed to guide the garden projects and to control the credit size. In this way, the economy will be developed in a healthier way.
7. To take preventive measures and quicken the tackling of scientific and technological problems. A better emergency system need be established to prevent the rebound of SARS.
   

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Editor: Catherine