Guangdong: Pioneer in Opening-up

Strong comprehensive economic strength

Since 1978 when Guangdong took the lead to embark on the journey of reform and opening up, the comprehensive economic strength of the province has leapt to the top rank in the country, and its economic scale has successively exceeded Singapore, Hong Kong and Taiwan, three of the “Four Asian Tigers”. In 2016, the total GDP of Guangdong reached 7.95 trillion yuan (10.7% of the national total), which increased by 7.5% compared to that in 2015, ranking first for the 28th year in a row. The per capita GDP was 72,787 yuan, which was 1.3 times higher than the national average. Guangdong also topped the country with its excellent performance in key economic indicators such as tax revenue, fiscal revenue, total retail sales of consumer goods, industrial added value and household savings.

Upgrade and optimization of industrial structure

Guangdong is driving its development of modern industries through innovation and continuously optimizing its industrial structure. In 2016, the ratio of the primary, secondary and tertiary industries was adjusted to 4.6: 43.3: 52.1. Producer services such as technology service, industrial design, supply chain management and information technology service have witnessed rapid growth. The proportion of the added value of modern service industry increased to 61.7%. There were 219 projects in advanced manufacturing industry along the west bank of the Pearl River with a total foreign investment amounting to 187.62 billion yuan, and the added value of equipment manufacturing was up by 12%.

Guangdong grants great support to the development of intelligence manufacturing. Fifteen backbone enterprises specialized in robotics were incubated with an annual output value over 100 million yuan. Twenty-two thousand new robots were put in use, which expanded the total number of robots in operation to over 60,000 in Guangdong. The proportion of the added value of advanced manufacturing and that of the high-tech manufacturing increased to 49.3% and 27.6% respectively in the total added value created by industrial enterprises above designated scale. Guangdong is also pushing forward the pilot projects in developing clusters of emerging industries with strategic significance. The production of new energy vehicles increased by 76.3%. Sectors including bio-pharmaceuticals, new energy and new materials are booming fast.

Increasing domestic consumption

Guangdong has a strong market consumption capacity. The disposable per capita income of the local residents exceeded 30,000 yuan in 2016, representing a year-on-year increase of 8.7%. The local market showed a booming trend with a fast development of the circulation sector.

In 2016, the total sales of consumer goods reached 3.47 trillion yuan with a year-on-year increase of 10.2%, ranking first in China for the thirty-fourth consecutive year. The consumption of vehicles, information and tourism has been increasing rapidly. The total online sales volume grew by 27.6%, and the express delivery service witnessed an increase in revenue by 42.8%.

Top province of trade in goods

The total import and export volume of Guangdong in 2016 amounted to 6.3 trillion yuan, topping the country for thirty-one years in a row. The export was 3.95 trillion yuan, taking up 28.5% of the national total with an increase rate of 0.2 percentage point. The innovation and development of processing trade has been accelerated. The export of “ODM + OBM” took up 71% of the total export. The proportion of general trade exceeded that of OEM to 45.3%. Comprehensive foreign trade services, export of goods purchased by cross-border tourists, cross-border e-commerce and other new types of business showed a record of rapid growth.

Hong Kong, United States, ASEAN, EU, South Korea and Japan are the major trading partners of Guangdong, whose total export and import trade volume took up 67.5% of the total volume of Guangdong. Recently, there has been an increase in the export and import trade with the emerging market countries and regions, including India, Mexico and Chile, which maps out a diversified market structure.

The Market Distribution of Foreign Trade of Guangdong 2016

Rapid increase of trade in services

The trade in service in Guangdong has shown a steady increase in recent years. The total import and export volume of trade in service of Guangdong reached 965.12 billion yuan (an increase of 17.6%) in 2016, ranking first in the country for the first time. The increase rate was 3.4 percentage point higher than the national average. The proportion of trade in service of Guangdong in the national total remained the same as that in 2015. It took up 13.3% in foreign trade of Guangdong as a whole, 1.9 percentage point higher than that in 2015. In 2016, the contract value of the outsourced service (including offshore and onshore) undertaken by the companies in Guangdong was registered as US$ 23.178 billion, up by 39.89%. The executed amount was US$ 13.947 billion, representing a year-on-year increase of 22.73%.

Booming e-commerce

Guangdong has been leading the development of e-commerce in the country. In 2016, the total transaction volume of e-commerce of Guangdong gained 4.35 trillion yuan and the cross-border e-commerce trade volume stood at 22.8 billion yuan, both of which were the largest in China, representing a year-on-year increase of 25.2% and 53.8% respectively. The B2B e-commerce transaction and the online retail transaction volume increased by 23.8% and 29.3%, equivalent to 72.7% and 27.3% of the entire e-commerce transaction.

A number of influential e-commerce platforms have been established in the industries such as steel, petrochemicals, plastics, grain, automobile and electronic products. Vipshop, GMC, Just One Touch, Lightinthebox and other local e-commerce champions are growing at a high speed.

Growing foreign investment

Guangdong has been encouraging foreign investors to seek their business opportunities in the province. By the end of 2016, Guangdong had accumulatively attracted 194,000 projects under direct foreign investment, with a total contractual foreign capital of US$ 686.12 billion and an actually absorbed foreign investment of US$ 400.83 billion, equivalent to 1/4 of the national total. In 2016 alone, there were 8,078 projects under FDI established in Guangdong with a contractual value of US$ 86.7 billion and an actual absorption of foreign capital of US$ 23.3 billion. The actual foreign investment absorbed from the United States and Europe increased by 22.3% and 12.3% to US$ 230 million and US$ 940 million respectively. One thousand and five hundred enterprises invested by the Fortune 500 companies have set their foot in Guangdong.

Robust and orderly development of overseas investment

Guangdong has been rigorously implementing the strategy of “Going Global” and actively participating in the development of “Belt and Road” to optimize the global distribution of investment and cooperation. By the end of 2016, the enterprises from Guangdong had established 8,603 non-financial enterprises in over 100 countries and regions. The total contractual value of the Chinese investment reached US$ 90.53 billion, with a major focus on the markets in Hong Kong, Macau, ASEAN countries and North America. In 2016, Guangdong approved 1,429 companies set up by domestic enterprises outside China’s mainland with a new investment volume amounting to US$ 28.276 billion. The accomplished turnover of foreign contracted projects was US$ 18.164 billion, and the actual income of the contract workers was US$ 892 million.

Continuously optimizing the pattern of opening up

Guangdong has been strengthening its direct exchanges and cooperation with developed countries such as North American and European countries. Sisterhood relationship has been established between Guangdong and 6 provinces and 30 cities in North America. Guangdong has also joined 3 China-US provincial-level trade and investment cooperation joint working groups. Such bond has also been bridged with 19 provinces and 41 cities in Europe.

Economic and trade communication agencies have been established to further promote the cooperation between Guangdong and the countries in North America and Europe. Guangdong Economic Development and Trade Promotion Offices to Europe, North America and Southeast Asia have been erected in Munich, Los Angeles and Kuala Lumper respectively. The Association of German Chambers of Commerce and Industry (DIHK), the European Union Chamber of Commerce, the Japan External Trade Organization, the Korea Trade-investment Promotion Agency (KOTRA) and other foreign commercial agencies have also set up their representative offices in Guangdong.

The cooperation between Guangdong and emerging market countries has been developing with great momentum, which can be demonstrated by Guangdong’s in-depth involvement in the China-ASEAN Free Trade Zone, its active participation in the China-Africa “Ten Major Cooperation Plans”, and its closer cooperation with South Asian countries, South Pacific Island countries, Latin American countries and Middle Asian Countries.

By now, foreign countries have also established consulates general in Guangzhou, including eighteen G20 member states, twenty-three OECD countries, eight ASEAN countries, eight African Union countries, six Middle East countries and four South Asian and Central Asian countries.

Pilot Free Trade Zone looking up to high standards

The China (Guangdong) Pilot Free Trade Zone (Guangdong PFTZ) was officially established in April, 2015, covering an area of 116.2 km2, including Nansha New Area of Guangzhou, Qianhai and Shekou Districts of Shenzhen and Hengqin New Area of Zhuhai. Guangdong PFTZ has been pushing forward various missions steadily and achieved periodical success. In 2016, there were 77,000 newly established companies who set their sail for businesses here with a total utilization of contractual foreign investment of US$ 54.62 billion, up by 160%. Guangdong PFTZ is expected to be built into a high-level gateway hub for opening up to accommodate the international trade center, international shipping center, international financial center and global metropolitans.

Active participation in the development of “Belt and Road”

Guangdong is taking the initiative in building the exchange platforms for the “Belt and Road” countries and successfully staged the 21st Century Marine Silk Road International Expo & International Forum and the 2nd Investing in Africa Forum.

The province is also furthering its cooperation with these countries and regions in international productivity and equipment manufacturing and facilitating the establishment of overseas cooperation parks including the Guangdong Photoelectric Industrial Park in the China-Belarus Industrial Park, the Saudi(Jizan)-China Industry Cluster and the Ethiopia-Guangdong Industrial Park along the “Belt and Road”.

Guangdong will speed up to build the Guangdong (Shilong) Railway International Logistics Center into an important node connecting “Belt and Road” and accelerate the development of the China-Russia Trade Industrial Park.

Meanwhile, Guangdong is also expanding its trade and cooperation with the countries along the route. Recently, the province has witnessed a booming momentum of cooperation with these countries and regions, in particular those along the “Marine Silk Road”.

High-level Guangdong-Hong Kong-Macau Great Bay Area

Guangdong will benchmark itself against the world-class bay areas and global metropolitan clusters to build the Guangdong-Hong Kong-Macau Great Bay Area into the highland for global innovation, a place with the most vibrant economic development and the best quality of life in the world, the upland for international cultural exchanges, and the pioneering area for China’s further reform and opening up. Centering on the development of a world-class metropolitan cluster at the Pan Pearl River Delta, Guangdong will spare no effort to realize the overall interconnection of the cross-border infrastructure linking Guangdong, Hong Kong and Macau, to strengthen the cooperation in innovation and entrepreneurship, and to create an excellent environment for living and working.

Guangzhou’s influence and driving forces as the capital of Guangdong will be fully utilized to lead the development. The cooperation between Shenzhen and Hong Kong will be strengthened to develop the global financial center, logistics center, trade center, innovation center and the international cultural and creative industry center. Zhuhai and Macau will be supported to work together in creating the world-class tourism and entertainment center. Priorities will be given to the cooperation between Jiangmen Daguang Bay Area, Zhongshan Cuiheng New District and Hong Kong and Macau to build the Guangdong-Hong Kong-Macau area into a tourist destination with global influence.

The projects of Guangdong-Hong Kong Scientific and Technological Innovation Corridor, Shenzhen-Hong Kong Innovation Circle and Guangdong-Hong Kong-Macau Pilot Cooperation Park for Innovation and Entrepreneurship will be further implemented to transform the Guangdong-Hong Kong-Macau region into an important innovation center and research achievement transformation base in the Asia-Pacific Region.