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Friday 2 January 2009
Experts Glum about Guangdong
Guangdong has rapidly lost its competitive edge to other provinces, and its traditional export-driven model means it will be the jurisdiction worst hit by the global financial torment, according to a provincial think-tank’s annual report.
Guangdong has rapidly lost its competitive edge to other provinces, and its traditional export-driven model means it will be the jurisdiction worst hit by the global financial torment, according to a provincial think-tank’s annual report.
The Guangdong Academy of Social Sciences said in the report that no new prospects for growth had emerged in the province since 1997, and that Guangdong was “inevitably losing its driving forces for long-term development”, the Nanfang Daily said yesterday.
The report said the global economic crisis had added to the woes of Guangdong’s manufacturing industry, which is heavily reliant on overseas investment.
The report’s author, economist Ding Li, said the global downturn’s destructive impact on the province would emerge in the first half of this year and could last for three to five years or even longer.
“Guangdong depends more heavily on exports than any other province ... [We expect] local production lines will shrink dramatically due to decreasing overseas orders,” he noted, saying a regional recovery could take as long as a decade.
The report said reduced overseas investment, foreign protectionism and weak domestic demand would mean massive factory closures and layoffs. What’s more, regulatory efforts are unlikely to boost provincial consumption enough to salvage sinking manufacturers because of the huge wealth gap and the limited social insurance scheme.
It highlighted regional co-operation between Guangdong, Hong Kong and Macau as one key way to alleviate the impact of the financial crisis, saying existing cross-border collaboration was unsatisfactory.
“Hong Kong is an important source of foreign investment and provides meaningful experience with its economic systems and a streamlined government ... but the primary task for cross-border collaboration is to co-ordinate cities within the Pearl River Delta and stop them from acting as competitors,” the report said.
Provincial authorities need to step in and stop local governments from pursuing quick successes rather than a long-term strategy, the report said.
Although Guangdong accounted for one-eighth of the country’s total economic growth last year, its economic growth rate had been on a par with those of Jiangsu and Shandong since 1996, it said. Because of inequalities in Guangdong’s development, the Pearl River Delta had enjoyed 80 per cent of the province’s economic growth and wealth, leaving the other three-quarters of the province in poverty, it noted.
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Experts Glum about Guangdong
Fiona Tam
2 January 2009
Guangdong has rapidly lost its competitive edge to other provinces, and its traditional export-driven model means it will be the jurisdiction worst hit by the global financial torment, according to a provincial think-tank’s annual report.
The Guangdong Academy of Social Sciences said in the report that no new prospects for growth had emerged in the province since 1997, and that Guangdong was “inevitably losing its driving forces for long-term development”, the Nanfang Daily said yesterday.
The report said the global economic crisis had added to the woes of Guangdong’s manufacturing industry, which is heavily reliant on overseas investment.
The report’s author, economist Ding Li, said the global downturn’s destructive impact on the province would emerge in the first half of this year and could last for three to five years or even longer.
“Guangdong depends more heavily on exports than any other province ... [We expect] local production lines will shrink dramatically due to decreasing overseas orders,” he noted, saying a regional recovery could take as long as a decade.
The report said reduced overseas investment, foreign protectionism and weak domestic demand would mean massive factory closures and layoffs. What’s more, regulatory efforts are unlikely to boost provincial consumption enough to salvage sinking manufacturers because of the huge wealth gap and the limited social insurance scheme.
It highlighted regional co-operation between Guangdong, Hong Kong and Macau as one key way to alleviate the impact of the financial crisis, saying existing cross-border collaboration was unsatisfactory.
“Hong Kong is an important source of foreign investment and provides meaningful experience with its economic systems and a streamlined government ... but the primary task for cross-border collaboration is to co-ordinate cities within the Pearl River Delta and stop them from acting as competitors,” the report said.
Provincial authorities need to step in and stop local governments from pursuing quick successes rather than a long-term strategy, the report said.
Although Guangdong accounted for one-eighth of the country’s total economic growth last year, its economic growth rate had been on a par with those of Jiangsu and Shandong since 1996, it said. Because of inequalities in Guangdong’s development, the Pearl River Delta had enjoyed 80 per cent of the province’s economic growth and wealth, leaving the other three-quarters of the province in poverty, it noted.
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