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Business / Policy Watch

Guangdong pledges to prioritize local consumption

By Li Wenfang in Guangzhou (China Daily) Updated: 2012-07-13 13:37

The governor of Guangdong province has pledged to prioritize the growth of internal demand, stabilize export activity, and help facilitate overseas investment by local companies, after revealing lower-than-expected economic growth forecasts for the first half of this year.

Zhu Xiaodan said that the province's GDP is projected to grow by 7.4 percent year-on-year, fixed-asset investment by 10.1 percent, retail by 11.5 percent and exports by 6.9 percent in the period.

All the figures are below national averages, he said.

Guangdong provincial government has set a full-year GDP growth target of 8.5 percent, compared to 10 percent last year.

Blaming structural problems and economic fluctuations for the lower performance expectations, Zhu said Guangdong has come under the double pressure of ensuring economic growth while still carrying out its dramatic transformation of recent years.

He added that GDP and exports did grow faster in the second quarter compared with the first quarter.

"Despite the stabilizing signs, the downward pressure has not been solved," he said.

Looking ahead, Zhu said the province will prioritize the expansion of internal demand by reversing the decline in investment and promoting new consumption modes like e-commerce.

He promised more efforts to stabilize exports by issuing policies on promoting trade in services, and facilitating overseas investment by local companies.

And he pledged, particularly, to help small and micro-businesses in the region weather the current economic conditions.

Of the positive signs within his economic update, Zhu said relatively fast growth was reported in cargo throughput at ports, imports for the processing industry, industrial power consumption, new loans and projects in Guangdong in the second quarter.

Zuo Liancun, a professor with the Institute of International Economy and Trade at Guangdong University of Foreign Studies, said he still expected the province's economy to fare better in the second half with new projects getting started.

Despite the still-weak demand in overseas markets, Guangdong, the largest exporter among provinces, should sharpen its competitive edge in foreign trade, Zuo said.

At this stage of its economic restructuring, he added that it should retain some low-end but not heavily polluting industries to meet the relatively stable fundamental demand overseas, and promote innovative products, exports of which are less affected.

Investment should be stepped up by, for example investing in public facilities in underdeveloped regions in the province and by extending public services to more people, he said.

Meanwhile, a survey by Shenzhen-based One Touch, the largest foreign trade process outsourcing service platform in the country, indicated that orders received by exporters in the Pearl River Delta climbed slowly in the first half of this year.

Xiao Feng, deputy general manager of One Touch, part of Alibaba Group, China's biggest e-commerce company, said with the traditionally busy season in the second half, foreign trade in the region is expected to continue to rise.

In the latest boost to its local investment activity, Guangzhou, the capital of Guangdong, received approval from the central government to build seven metro lines, totaling 228.9 kilometers, according to the Guangzhou Development and Reform Commission.

Shu Meng contributed to this story.

liwenfang@chinadaily.com.cn

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