Guangdong’s economy is expected to grow by only 8.5 per cent this year, the slowest since the mainland embarked on economic reforms 30 years ago, its governor Huang Huahua said yesterday at the opening of the provincial people’s congress.
Even achieving 8.5 per cent in GDP growth will take enormous efforts, Mr. Huang said, given the global financial crisis and the province’s push to phase out low-end and labour-intensive industries.
The province, which produces nearly a third of mainland exports, has been badly hit by the global slump. Millions of migrant workers have lost their jobs as factories closed.
Guangdong’s gross domestic product growth slowed to 10.1 per cent last year from 14.7 per cent in 2007, while its export growth tumbled to 9.4 per cent from 22.3 per cent. It expects zero growth in exports this year.
Mr. Huang warned of a bleak trade outlook.
“This will be the toughest year for [Guangdong] since the beginning of the economic reforms, as the global financial crisis has yet to bottom out and the world economy is slowing down significantly. We anticipate growing downward pressure on the country’s economy,” he said.
“The economy of our province is closely linked to the outside world, and the task of maintaining stable and fast economic growth is extremely difficult,” he said.
However, he said Guangdong must continue to transform and upgrade from low-end manufacturing to high-end industries.
Under pressure on both fronts, Guangdong for the first time saw a drop in the number of migrant workers. It has lost 450,000 migrant workers and expects to lose more.
Mr. Huang pledged to keep unemployment at 4 per cent, while the figure last year was 2.56 per cent.
To stimulate growth, he promised the government would invest 303 billion yuan (HK$344 billion) on 200 projects, nearly double the total investment last year.
The investment will push the provincial government expenditure up by 16 per cent, while government income is projected to grow by only 6 per cent.
A supplementary document seen by the South China Morning Post showed a budget surplus of only 209 million yuan.
The document describes the financial situation as acute but says the government will make the best use of resources by looking for new revenue sources and cutting costs.
Analysts say Guangdong’s economic forecast for this year will cast a shadow on the mainland’s goal of achieving 8 per cent growth, as the province accounts for one ninth of the economy.
Both Beijing and Shanghai have targeted GDP growth of 9 per cent this year.
Zheng Tianxiang, a professor at Sun Yat-sen University’s Pearl River Delta Research Institute, said Guangdong’s modest growth target would affect the mainland’s ability to achieve 8 per cent GDP growth.
“It is inevitable because Guangdong’s contribution to the country’s growth is tremendous ... The problem with investing in infrastructure is that it will take time to see the impact,” he said.
Li Miaojuan, director of the province’s development and reform commission, said: “Our target has already taken into account the national goal. But as our economy is tightly knitted with the international environment, if we’re able to reach our projection, it would already be a big contribution to the country.”
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Guangdong’s economy to grow by only 8.5pc
Province sees slowest expansion in 30 years
Chloe Lai in Guangzhou
14 February 2009
Guangdong’s economy is expected to grow by only 8.5 per cent this year, the slowest since the mainland embarked on economic reforms 30 years ago, its governor Huang Huahua said yesterday at the opening of the provincial people’s congress.
Even achieving 8.5 per cent in GDP growth will take enormous efforts, Mr. Huang said, given the global financial crisis and the province’s push to phase out low-end and labour-intensive industries.
The province, which produces nearly a third of mainland exports, has been badly hit by the global slump. Millions of migrant workers have lost their jobs as factories closed.
Guangdong’s gross domestic product growth slowed to 10.1 per cent last year from 14.7 per cent in 2007, while its export growth tumbled to 9.4 per cent from 22.3 per cent. It expects zero growth in exports this year.
Mr. Huang warned of a bleak trade outlook.
“This will be the toughest year for [Guangdong] since the beginning of the economic reforms, as the global financial crisis has yet to bottom out and the world economy is slowing down significantly. We anticipate growing downward pressure on the country’s economy,” he said.
“The economy of our province is closely linked to the outside world, and the task of maintaining stable and fast economic growth is extremely difficult,” he said.
However, he said Guangdong must continue to transform and upgrade from low-end manufacturing to high-end industries.
Under pressure on both fronts, Guangdong for the first time saw a drop in the number of migrant workers. It has lost 450,000 migrant workers and expects to lose more.
Mr. Huang pledged to keep unemployment at 4 per cent, while the figure last year was 2.56 per cent.
To stimulate growth, he promised the government would invest 303 billion yuan (HK$344 billion) on 200 projects, nearly double the total investment last year.
The investment will push the provincial government expenditure up by 16 per cent, while government income is projected to grow by only 6 per cent.
A supplementary document seen by the South China Morning Post showed a budget surplus of only 209 million yuan.
The document describes the financial situation as acute but says the government will make the best use of resources by looking for new revenue sources and cutting costs.
Analysts say Guangdong’s economic forecast for this year will cast a shadow on the mainland’s goal of achieving 8 per cent growth, as the province accounts for one ninth of the economy.
Both Beijing and Shanghai have targeted GDP growth of 9 per cent this year.
Zheng Tianxiang, a professor at Sun Yat-sen University’s Pearl River Delta Research Institute, said Guangdong’s modest growth target would affect the mainland’s ability to achieve 8 per cent GDP growth.
“It is inevitable because Guangdong’s contribution to the country’s growth is tremendous ... The problem with investing in infrastructure is that it will take time to see the impact,” he said.
Li Miaojuan, director of the province’s development and reform commission, said: “Our target has already taken into account the national goal. But as our economy is tightly knitted with the international environment, if we’re able to reach our projection, it would already be a big contribution to the country.”
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