II . Economy
(i) GDP Statistics
In 2005, Guangdong鈥檚 economic operation was further accelerated and the national economy maintained steady and fast growth. Its GDP registered 2.236654 trillion yuan, accounting for 11.9% of the total in China鈥檚 mainland. Of the figure, the value added of the primary industry was 139.523 billion yuan, the secondary industry 1,133.993 billion yuan and the tertiary industry 963.137 billion yuan.
GDP Growth Status of Guangdong Province From 2000 to 2005
Proportion of the Primary, Secondary and Tertiary Industries in Guangdong
(ii) Statistics of Resources, Industries and Agriculture
Resources
Guangdong has rich mineral and marine resources. The rich land mineral resources are distributed extensively. Among the over 150 minerals that can be utilized, 116 have been discovered in Guangdong. The diversifi ed marine resources are mainly tropical warm water marine biology.
Guangdong provides land for industrial use with full facilities and services, and reasonable prices. The three Special Economic Zones, namely, Shenzhen, Zhuhai and Shantou, 21 state-level development zones and a large number of provinciallevel development zones all have favorable matching environment.
The industrial structure of Guangdong is sound and complete, the manufacturing industry especially advanced. At present nine pillar industries have taken shape, i.e. garment and textile, food and beverage, construction material, electronics and information, electrical appliances, machinery and specialized equipment, petrochemicals, forestry and papermaking, pharmaceuticals, and automobiles. The industries have strong production, processing and matching capacities, forming one of the manufacturing bases in China or even the world at large.
At present, Guangdong is accelerating the new industrialization and the development of hi-tech industries that focus on information technology, biotechnology, optical-electronic-machinery integration and new materials. Emphasis will be given to constructing the鈥 Guangdong IT Industry Corridor鈥 of Guangzhou, Huizhou, Dongguan and Foshan, and the petrochemical industrial belt of Guangzhou, Huizhou, Maoming and Zhanjiang. As a result, a large number of matching industries will take shape, which will provide investors with favorable conditions to develop their businesses in Guangdong.
Guangdong also encourages the development of three matching productive services, i.e. commerce, logistics and exhibition to facilitate the investors. Intermediary commercial institutions have developed rapidly, overall service capability has been upgraded substantially, and commercial intermediary service products have kept innovating. The logistics market is more open and a logistics information platform has been established. Centering on the central cities of Guangzhou and Shenzhen, logistics resources have been readjusted and logistics enterprises have enhanced their cooperation so as to raise efficiency. Exhibition industry that features internationalization, specialization and trade-orientation has gained key development. New international exhibition brands with Chinese charac-teristics have been cultivated, and cooperation between Guangdong and Hong Kong has been enhanced, so the industry develops soundly and orderly.
The following is a brief review of the characteristics of Guangdong鈥檚 industries:
Manufacturing
Guangdong is one of the leading industrial provinces of China. In recent years, the Guangdong Provincial Committee of Communist Party of China and Guangdong Provincial People鈥檚 Government have promulgated a series of documentations on the readjustment of the industrial structure, the enhancement of the industrial competitiveness, and the development plan of the nine pillar industries. All of these documentations have accelerated the support to the pillar industries and gradually optimized Guangdong鈥檚 industrial structure.
These days the leading role of the nine pillar industries, namely, electronics and information, electrical appliances and machinery, petrochemicals, garment and textile, food and beverage, construction material, papermaking, pharmaceuticals, and automobiles has kept enhancing. The three new pillar industries, i.e. electronics and information, electrical appliances, machinery and specialized equipment and petrochemicals maintain strong development momentum. The three traditional industries, i.e. garment and textile, food and beverage, and construction material develop steadily. The three potential industries, i.e. papermaking, pharmaceuticals and automobiles develop tremendously. The structures of these industries are being optimized. In 2005, the nine industries completed a total industrial added value of 620.307 billion yuan, accounting for 73.7% of the added value of large-scale industries.
1) Electronics and Information Industry
The scale of Guangdong鈥檚 electronics and information industry ranks first in China鈥檚 mainland and Guangdong has become one of the most important IT p r o d u c t i o n b a s e s i n C h i n a a n d e v e n the world at large. In 2005 Guangdong electronics and information industry maintained its position as the No. 1 pillar industry, an importance force in pushing Guangdong鈥 s economic growth. Now over 20 enterprises in Guangdong have been listed among the Top 100 Electronics Enterprises in China.
A batch of competitive products have been produced in Guangdong鈥檚 key electronics and information industries. In communications equipment manufacturing, programmed controlled exchanges, optical communications products have relatively high advantage in performance-price ratio. In electronic appliances manufacturing, products such as color-tubes, discrete devices lead China in competitiveness. In electronic components manufacturing, products such as PCB and SMT occupy very important positions in China. In software industry, imbedded software accounts for more than half of the mainland鈥檚 total.
Guangdong鈥檚 IT industry mainly concentrates in the Pearl River Delta. The famous electronic and IT corridor has been formed, the mainstay of which includes Shenzhen, Guangzhou, Dongguan, Huizhou, Foshan and Zhongshan.
2) Electrical Appliances and Machinery Industry
Guangdong has formed the electrical appliances and machinery industrial clusters that are centered on cities with favorable basis in equipment manufacturing, such as Guangzhou, Shenzhen and Foshan, and which radiate towards the Pearl River Delta and spur the east and west regions to develop together. The industry has a number of advantageous products that have large market shares in China.
The production growth efficiency of Guangdong鈥檚 machinery industry has been improved. The overseas market has been further expanded. Development of new products has been accelerated. The economic benefits of a group of key enterprises have been remarkably improved. the industrial aggregate has ranked among the top in China鈥檚 mainland.
Guangdong鈥檚 electrical household appliances industry holds a very important position in China鈥檚 electrical household a p p l i a n c e s i n d u s t r y . G u a n g d o n g i s an important export base of electrical household appliances in China and the whole world. The electrical household appliances industry in Guangdong is characterized by a wide and complete range of products, advanced matching production and excellent product quality, and active involvement in developing new products. The production, export and competitiveness have constantly taken the lead in China. In household audio-video equipment manufacturing, the competitiveness of color TV sets, laser disk players and Hi-Fi all ranks fi rst in China.
With mature industrial clusters of electrical household appliances, Guangdong has nurtured a batch of core enterprises and famous brands, such as Gree and Media in air-conditioning industry, Kelon in refrigerator industry, Glanz in microwave industry, TCL and Konka in color TV sets industry. In the Pearl River Delta area, electrical household appliances industrial clusters and export processing zones with distinct features have taken shape.
3) Petrochemical Industry
The aggregate scale of Guangdong鈥檚 petrochemical industry ranks among the top in China. The main products, such as crude oil, petrol, kerosene and diesel oil, ethylene, synthesis resin, paints, and rubber shoes all rank among the top three in China. In 2005, the petrochemical industry continued to maintain steady growth.
Guangdong鈥檚 petrochemical industry mainly concentrates in Maoming, Guangzhou, Huizhou and Zhanjiang. Maoming Petrochemicals, Guangzhou PetroChemicals and Zhanjiang Dongxing are the three backbone oil refinery enterprises of Guangdong. The former two are also famous ethylene production enterprises of Guangdong. In 2005, after the 12 million tons/year oil refinery project and 800,000 tons/year ethylene project in Huizhou finished construction and were put into production, Huizhou has become the 3rd largest oil refinery and chemicals center in Guangdong after Maoming and Guangzhou.
4) Garment and Textile Industry
Guangdong is a major textile producer and exporter in China, and the third largest garments export base in the world. All the main indicators of Guangdong鈥檚 textile industry, including major products, varieties, quality, brands, industrial output value, and sales volumes all lead the country. In 2005 the growth rate of Guangdong鈥檚 garment and textile industry hit 24.8%. The export of clothing and textiles registered 22.01 billion US dollars.
The cluster development of the textile industry has become a unique feature of development and an important source of competitiveness of the textile industry in Guangdong. The development advantages of Guangdong鈥檚 garment and textile industry are embodied in specialized production that has led to the formation of鈥 chunk鈥 industry. Specialized production is small but exquisite, small but professional, matching and coordinating with each other. Casual wear of Zhongshan, clothing and knitwear of Dongguan, materials, knitting, children鈥檚 wear, and underwear of Foshan and shirts and blouses of Jieyang (Puning) all enjoy great reputation at home and abroad.
The key clusters of Guangdong鈥檚 garment and textile industry are concentrated in over 40 towns (districts) in Guangzhou, Shenzhen, Foshan, Zhongshan, Dongguan and Jiangmen.
5) Food and Beverage Industry
Guangdong is a leading province in China in the production and export of food and beverage. The food and beverage industry in Guangdong has attached high importance to technical renovation and the introduction, adaptation and absorption of advanced foreign technologies, which provides a reliable foundation for the upgrade of the industry and the guarantee of quality. Guangdong鈥檚 product series such as beverage, baked goods, health products and seasonings have maintained a leading position in China, with significant advantages and a large number of famous brands, such as Pearl River Beer and Kingway Beer. Through integration and adjustment, the food and beverage industry becomes one of the pillar industries of Guangdong Province.
6) Construction Material Industry
Guangdong is a major producer of construction materials, ranking the first in China in terms of total amount of production.
A number of product clusters have been formed in Guangdong鈥檚 construction material industry, with their respective characteristics and positive influence both home and abroad. These include ceramics in Foshan, coatings in Shunde of Foshan, aluminum profiles in Dali of Foshan, sanitary wares in Chaozhou, stone materials in Yunfu, and plumbing, heating and bathroom products in Kaiping of Jiangmen. Guangdong鈥檚 construction materials feature a rich variety and rapid development of new products, especially in decorating materials, where it holds a leading position in China. The construction material industry in Guangdong boasts a high degree of
privatization and marketization, further developed foreign-oriented economy
and active export, with its export volume accounting for 30% of the total of the Chinese Mainland, ranking the fi rst in China. The export volume of architectural ceramics, advantageous products of Guangdong, has been increasing by an average annual rate of over 70% for the recent years. Of China鈥檚 12 famous ceramics producers, 8 are stationed in Guangdong.
7) Papermaking Industry
Guangdong is now a key province with a decisive role in papermaking and paper products in China. The province now hosts the State Key Laboratory of Pulp and Paper Engineering and the National Engineering Research Center of Papermaking and Pollution Control, both of which are the only institutes of their kind in the papermaking industry in China, while the latter of which involves integrated operations in production, scholarly study, research, science, industry and trade.
Guangdong has an advantageous geographic location for the development of the papermaking industry. Influenced by the warm and wet subtropical monsoon climate which brings abundant rainfall, the major areas of the province are suitable for fast-growing and high-yield plantation, which practically guarantees both fiber and water resources for the development of the papermaking industry. This significant advantage in geographic location has attracted a large number of foreign investors in wood and pulp production in Guangdong in recent years.
A cluster of papermaking enterprises has primarily been formed around the Pearl River Delta in Guangdong. These enterprises are mainly located in the municipalities of Guangzhou, Foshan, Jiangmen, Zhuhai, Shenzhen and Zhanjiang, which are also the location of near 80% of enterprises in Guangdong. At present the papermaking industry in Guangdong is on the track of scale-up, with the plan to achieve an annual output of 11 million tons of paper and cardboard and 850 thousand tons of commodity pulp in 2010.
8) Pharmaceutical Industry
Guangdong has strong power as a province in terms of its pharmaceutical industry, which ranks among the first in China in comprehensive strength. Specifically, the province maintains a leading position in the fields of traditional Chinese medicine, chemico-pharmaceutical preparations, and bio-pharmaceutical products. A remarkable advantage has also taken shape in medical instruments with higher technical content. The year 2005 witnessed a considerable output growth rate of 14.8% in Guangdong鈥檚 pharmaceutical industry.
The concentration of Guangdong鈥檚 pharmaceutical industry is above average in China. A comparatively complete system of pharmaceutical enterprises has been basically formulated, including chemical medicine, traditional Chinese medicine, biomedicine, medical instruments, and pharmaceutical commerce. A number of large comprehensive pharmaceutical enterprises have been established.
T h e p r o v i n c e h a s a l s o a c h i e v e d remarkable development in chemicopharmaceutical preparations. Biopharmaceutical enterprises such as Shenzhen Kexing, Kangtai, and Guangdong Techpool, and medical instrument manufacturers such as Anke and Mindray all have strong competitiveness in their respective arenas.
9) Automobile Industry
The automobile industry of Guangdong ranks among the top in China in terms of comprehensive economic indices related to the industry, such as the industrial valueadded, industrial profi ts and sales revenue of whole vehicles. In recent years, Guangdong has been committed to the creation of favorable investment environment and increased absorption of foreign investment in the adjustment of industrial structure, to the effect of an ever-expanding scale of automobile manufacturing and effective promotion of manufacturing capacity. Famous foreign automobile manufacturers such as Honda, Isuzu, Nissan, and Toyota have built their workshops in Guangdong successively.
Guangdong has become the largest automobile manufacturing base in South C h i n a . A u t o m o b i l e m a n u f a c t u r i n g enterprises have formed a distributive pattern with Guangzhou as the manufacturing center, sedan cars as key products, accessories as the foundation, and buses and special purpose vehicles as supportive sectors. This distribution is further enhanced by motorcycle enterprises with strong product development capacity and export competitiveness. Luxury sedan cars produced in Guangdong have cultivated strong competitiveness in the market. In 2005, the value-added of Guangdong鈥檚 automobile industry increased by 40.5%, ranking the fi rst among the nine pillar industries. In the same year, a number of 413,583 vehicles were produced in Guangdong.
With the development of the automobile industry, a large number of accessory suppliers have aggregated in Guangdong. The Pearl River Delta region has become the cluster of automobile industries and largescale accessory bases have been formed in Guangzhou Economic and Technological Development Zone, Guangzhou Nansha Economic and Technological Development Zone and Huadu District of Guangzhou.
The Service Industry
By the end of 2005, an accumulative number of 20,908 projects with foreign direct investment in the service industry had been approved in Guangdong, involving a contracted amount of 75.91 billion USD in foreign capital, of which 39.46 billion USD were actually absorbed. These fi gures accounted respectively for 17.5% of the total number of the projects with foreign direct investment approved in Guangdong, 30.0% of the total contracted amount of foreign capital, and 24.3% of the total amount of foreign capital actually absorbed.
Within the service industry in Guangdong, the range of fields absorbing foreign capitals has been expanding, from real estate, wholesale and retail, hotels and restaurants, transport, storage and post, to financial, leasing and commercial service, scientific research, technical service, information transmission, computer service and software, as well as education, culture and sports.
Constant optimization has been evident in the structure of foreign investment in the service industry, with a tendency of development from the conventional fields of real estate, commerce, restaurants and transport to the rising fields with higher technical content, such as commercial service, scientific research, technical service, information transmission, computer service and software.
Famous multinational corporations have actively invested in the service industry of Guangdong. To name a few, among Fortune 500 corporations, Wal-Mart and McDonald鈥檚 from the US, Carrefour from France, Metro from Germany, BP from the UK and Shell from the Netherlands have invested in the commercial circulation and restaurants; Citibank and AIG from the US have invested in banking and insurance; Marubeni from Japan has invested in circulation.
G u a n g d o n g h a s t a k e n a n a c t i v e part in tendering for service outsourcing contracts. By the end of 2005, 2,787 service outsourcing enterprises had been established in the province with foreign investment, involving a total investment of 8.3 billion USD, achieving a turnover of 13.03 billion RMB and a service export volume of 2.77 billion USD. Service outsourcing enterprises invested by multinational corporations have served as the mainstream of service vendors for their large scales. Currently service provided by Guangdong mainly involves software and information technology outsourcing, while commercial procedure outsourcing has displayed a promising prospect, including various operations, such as office support, data input and processing, software coding and testing, IT support, call center, financial management, human resource management, and R & D center. Tendering for service transferred and outsourced from Hong Kong is a major characteristic of Guangdong, and cooperation between Guangdong and Hong Kong in tendering for overseas service outsourcing has a promising future.
Agriculture
In 2005, Guangdong achieved a gross agricultural output of 242.28 billion RMB, with a value-added of 142.18 billion RMB, an annual per c a p i t a i n c o m e o f 4 , 6 9 0 . 5 RMB for rural residents, an import/export volume of 7.456 billion USD for agricultural products (including agricultural products according to WTO categorization and aquatic p r o d u c t s ) , o f w h i c h 3 . 5 7 4 billion USD was attributed to export.
Output of Main Agricultural Product in Guangdong Province in 2005
(iii) Commercial Statistics
Foreign Trade
Import and export has maintained a rapid growth in Guangdong. In 2005, the import/export volume of Guangdong totaled 427.98 billion USD, an increase of 19.8% over the preceding year, accounting for over 30% of the total import/export volume of the Chinese Mainland. The total volume of import and export were 238.16 billion USD and 189.82 billion USD respectively.
The structure of export commodities in Guangdong has undergone constant optimization. In 2005, the export volume of mechanical and electrical products reached 164.42 billion USD, that of new and high-tech products 83.58 billion USD, and that of garment and textile 22.01 billion USD. The structure of export market has also been further optimized. While rapid growth has been sustained in trade between Guangdong and its major trade partners, including Hong Kong, the US, Japan, the EU and the ASEAN nations, there is now rapid expansion of export to new markets such as Africa, Latin America and Russia, where a growth rate of over 40% were achieved in 2005.
In terms of import, a rapid growth in major categories of commodities has been registered, while prices of resource-intensive products have been on the rise. Mechanical and electrical products and new and high-tech products account respectively for 60.4% and 37.1% of the total import volume of Guangdong.
Percentage of mechanical and electrical products in the total export volume in 2005
Percentage of new & high-tech products in the total export volume in 2005
Absorption of Foreign Capital
With constant development in economy and society in recent years, the soft and hard environment for investment in Guangdong has undergone constant improvement, providing favorable conditions for foreign i n v e s t m e n t a n d s p e e d i n g u p f o r e i g n investment in Guangdong. In 2005, foreign capital actually absorbed by Guangdong totaled 12.364 billion USD, an increase of 23.5% over the same period of the preceding year, ranking the first in the Chinese Mainland. By then, Guangdong had actually absorbed an accumulative amount of 162.9 billion USD in foreign capital, accounting for 1/4 of the total of the Chinese Mainland.
The structure of industries with foreign investment has continually been optimized. In 2005, foreign direct investment actually absorbed by the primary, secondary and tertiary sectors was 77 million USD, 9,675 million USD and 2,612 million USD respectively. Investment in manufacturing industries continued to grow to a large extent. The whole year witnessed the approval of 2,478 service projects with foreign investment, increasing by 18.8%. Six industries in the service sector absorbed greater amounts of foreign investment, including real estate, leasing and commercial s e r v i c e , t r a n s p o r t , s t o r a g e a n d p o s t , information transmission, computer service and software, and wholesale and retail.
Investment from developed countries has grown at a faster speed, with contracted foreign capital from Australia, France, Canada and Denmark growing at rates over 150%. Investment from foreign-funded large enterprises and large projects has been sped up; R & D centers with independent foreign legal persons have also picked up speed of development in such industries as electronics and information, pharmaceutical research, and automobile technology; the service industry as represented by logistics, convention and exhibition, advertising, and consultation has also displayed a strong tendency for development; while foreign investment to development zones, mountainous areas and the eastern and western wings of the province has been growing in activity.
Percentages of foreign capital absorbed by the Primary, Secondary and Tertiary industries
Overseas Investment and Cooperation
Overseas investment and cooperation of Guangdong has been developing in a favorable manner, with large enterprises picking up speed in international operations and private enterprises actively investing in projects overseas. By the end of 2005, Guangdong had set up 1,527 enterprises overseas or in Hong Kong and Macao, with an accumulative amount of 4,725 million USD in contracted investment, covering 45 countries and regions, mainly in Hong Kong and Macao, Southeast Asia, Africa and South America. The year 2005 witnessed the approval of 123 new overseas enterprises, with an investment of 442 million USD, of which 328 million USD was from Chinese investors. Development of energy resources has become a new focus in overseas investment and cooperation, while Guangdong enterprises have become increasingly active in investing to Hong Kong and Macao. By the end of 2005, Guangdong has approved the establishment of 836 enterprises in Hong Kong and Macao, involving a contracted amount of 2,931 million USD in investment.
O v e r s e a s e n g i n e e r i n g c o n t r a c t s and labor service cooperation involvingGuangdong have also gained a rapid growth rate. As of 2005, the number of newlysigned engineering and labor service contracts totaled 16,069, growing by 30.7% over the same period of the preceding year, involving a contracted amount of over 3.6 billion USD, with an 83.6% growth, of which completed amount totaled near 2.8 billion USD, an increase of 46.5% and a new high in history. Of this amount, 80% was attributed to communication systems engineering and complete sets of mechanical and electrical equipment.
Technology Introduction
The year 2005 witnessed the signing of 537 agreements on technology introduction in Guangdong, an increase of 71 in number a t a g r o w t h r a t e o f 1 5 . 2 4% o v e r t h e same period of the preceding year. These agreements involved a total contracted amount of 847 million USD, of which 645 million USD was entered as technical fees, on a par with the same period of the preceding year, accounting for 76.15% of the contracted total; while 202 million USD was entered as equipment costs, with a growth rate of 3,270.74% over the same period of the preceding year, accounting for 23.90% of the contracted total. Technology introduction has concentrated in Guangzhou, Shenzhen and other economically developed areas in the Pearl River Delta, while the contracted amount of Guangzhou and Shenzhen account for 73.86% of the provincial sum.
Commodity Circulation
In 2005, Guangdong achieved an amount of 788.264 billion RMB in total retail sales of consumer goods, of which 595.062 billion RMB was attributed to retail sales at and above county-level, while 193.201 billion RMB to retail sales below county-level. In terms of industries, the retail sales of wholesale and retail trades amounted to 657.534 billion RMB, those of the catering services amounted to 117.434 billion RMB, while other industries achieved 13.296 billion RMB in retail sales. Modern modes of circulation represented by chain operation and logistics distribution have been promoted, while new trades and new business modes have boomed to satisfy consumer needs and meet market competition and are now spreading from the Pearl River Delta to the whole province. By the end of 2005, the number of chain businesses has grown to 183, with 11,076 branch stores, achieving a sales volume of 163.588 billion RMB. Modern logistics has also gained fast development in Guangdong, with a value-added of 376.527 billion RMB.
