Market Profiles on Chinese Cities and Provinces
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11.2008

GUANGDONG PROVINCE

Major Economic Indicators

Economic Indicators

2007

Jan - Sep 2008

Value

Growth
(%, y-o-y)

Value

Growth
(%, y-o-y)

Gross Domestic Product (RMB bn)

3,108.4

14.7 1

2,530.0

10.4 1

Per Capita GDP

33,151

13.1 1

Added Value Output
- Primary industry (RMB bn)

169.6

3.2 1

137.5

3.0 1

- Secondary industry (RMB bn)

1,593.9

17.0 1

1,341.7

11.8 1

- Tertiary industry (RMB bn)

1,345.0

13.4 1

1,050.8

9.4 1

Value-added Industrial Output 2 (RMB bn)

1,410.4

18.2 1

1,110.1

13.3 1

Fixed-assets Investment (RMB bn)

959.7

18.0

722.6

17.6

Retail Sales (RMB bn)

1,059.8

16.2

937.0

20.5

Inflation (Consumer Price Index, %)

3.7

6.7

Exports (US$ bn)

369.3

22.3

261.9 3

13.2

- By FIEs (US$ bn)

232.2

19.8

166.9 3

15.4

Imports (US$ bn)

264.8

17.6

189.5 3

13.6

- By FIEs (US$ bn)

175.7

16.2

122.6 3

11.7

Utilized Foreign Direct Investment (US$ bn)

17.1

18.0

15.6

19.5

Notes: 1 In Renminbi real term 2 For all state-owned and other forms of enterprises with annual sales over RMB 5 million
3 Jan-Aug 2008
Sources: Statistical Yearbook of Guangdong 2008, China's Customs Statistics 8.2008

General Background

Guangdong has a total area of 179,757 sq.km. Total population stood at 94.5 million in 2007.

The Pearl River Delta (PRD) Economic Zone is the province's economic hub, its GDP was RMB2,542 bn, accounting for 79.7% of Guangdong's GDP in 2007. The PRD Economic Zone covers 9 cities -- Guangzhou, Shenzhen, Zhuhai, Foshan, Jiangmen, Dongguan, Zhongshan, Huizhou city and Zhaoqing city.

To increase regional cooperation and integration, Guangdong initiated the Pan-PRD development concept in 2003. Pan-PRD comprises nine provinces on the Mainland that include Guangdong, Guangxi, Fujian, Hainan, Jiangxi, Hunan, Guizhou, Yunan and Sichuan, and the two Special Administrative Regions -- Hong Kong and Macau. A framework agreement on cooperation among all Pan-PRD constituents was signed in June 2004. A major part of the Pan-PRD development plan is to speed up construction of an integrated transportation network within the region.

Economic Competitiveness and Future Development

Guangdong's economy led the country in many aspects in 2007:

  • The largest GDP among all provinces and municipalities, accounting for 12.5% of the national total
  • The largest exports value among all provinces and municipalities, accounting for 30.3% of the national total
  • The largest retail sales value of consumer goods which accounted for about 11.9% of the national total

Guangdong has a strong private sector. Many indigenous enterprises have also developed a strong brand name in their specialised areas and become market leaders in China, such as Galanze, Midea, Gree etc.

Industries

Guangdong's manufacturing industries developed rapidly as a result of foreign investment, particularly in the PRD. Guangdong is a major export-processing base for foreign investors mainly from Hong Kong and Taiwan. Cities that have the largest industrial production include Guangzhou, Shenzhen, Dongguan, Foshan, Huizhou, Jiangmen and Shantou.

Composition of GDP (%)

1980

2007

Primary

33.2

5.4

Secondary

41.1

51.3

.....Industry

36.0

48.0

Tertiary

25.7

43.3

Source: Statistical Yearbook of Guangdong, 2008

Guangdong is strong at light manufacturing industry. Output of light industries used to account for over half of the province's total industrial output. Major products include electrical appliances such as television sets, electrical fans and refrigerators, and other consumer products like garments, toys, shoes and electronics. Exports of most of these products rank the highest in China.

In recent years, Guangdong's is moving towards heavy, new and high technology industries. The share of heavy industries in gross industrial output increased from 47.1% in 2000 to 61.6% in 2007. The output value of high technology industry above designated size was RMB1,475 billion in 2007, about 5.4 times of which in 2000.

Output Share of Leading Industry Groups 2007

% share of total industrial output

Leading New Industries

48.7

.....Electronic Information

24.2

.....Electric equipment and Special Purpose Equipment

15.4

.....Petroleum and chemistry

9.1

Leading Traditional Industries

13.8

.....Textile and garments

5.5

.....Food and beverage

4.3

.....Building materials

4.0

Leading Potential Industrial

7.8

.....Logging and Papermaking

2.4

.....Medicine

0.8

.....Motor Vehicle

4.7

Source: Guangdong Statistical Yearbook 2008

As for the service sectors which accounted for 43.3% of GDP in 2007, Guangdong aims to further increase their overall relative share in GDP within its 11th five-year programme. While development of the service sectors will be expedited across the board, their structure will be optimized to develop Guangdong into a regional financial center, modern logistics hub in southern China, as well as an international business travel and shopping center. Development of specific sectors such as wholesale and retail, logistics, finance, convention and exhibitions and business (professional) services will be strengthened and encouraged.

Tourism

In 2007, Guangdong received 122 million (+13.0%) domestic tourists and 23.3 million (+15.3%) overseas tourists with tourism receipts at RMB179 billion (+17.8%) and US$66 billion (+10.0%) respectively. The number of tourists from Hong Kong and Macao increased by 15.4% to 15 million.

Foreign Trade

Guangdong as a leading industrial base as well as an export processing base for a wide range of products contributed markedly to the country's export growth. In 2007, Guangdong exported US$369.3 billion (+22.3%), accounting for 30.3% of the nation's total. Major export product types included electric and electronic products, computer and communication technology, machinery and equipments, etc. In 2007, Hong Kong was still the largest export market, accounting for 35.2% of the total, other major export markets included the US and Japan.

In 2007, Guangdong imported US$264.8 billion (+17.6%), accounting for 27.7% of the nation's total. Being a manufacturing base, Guangdong imports a large number of capital and intermediate goods. Leading import product types include electric and electronic products, electronic techonology, computer and communication technology, etc. In 2007, Taiwan was the largest source of import accounting for 15.1% of the total. Other major import sources included Japan and the US.

Foreign Investment

Up to end-2007, Guangdong accounted for 20.5% of China's total utilized FDI. Foreign investments in Guangdong are mainly engaged in manufacturing industries (61.0% of the utilized FDI in 2007) including computer accessories, computer, biological products, mechanical and electrical products, refined chemicals, hardwares and traditional industries such as toys and garments. For tertiary industry, real estate was one of the most attractive areas, absorbing 20.5% of the total utilized FDI in 2007.

FDI in Guangdong

1979 - 2007

2007

No. of contracts

137,668

9,506

Contracted amount (US$ bn)

323.4

33.9

Utilised amount (US$ bn)

194.5

17.1

Source: Guangdong Statistical Yearbook, 2008

Foreign-invested enterprises (FIEs) are playing an important role in Guangdong's economy, with a share of 62.9% to the total export.

Hong Kong is the largest source of foreign direct investment in Guangdong. During the period of 1979-2007, Hong Kong companies signed 99,156 investment contracts with contracted amount of US$203.8 billion in Guangdong, and the utilized capital from Hong Kong amounted to US$120.5 billion, accounting for 62% of Guangdong's total.

Hong Kong's investment mainly involved in electronics, toys, garment, shoes, plastic, computer and accessories, commerce, food catering, material warehousing, distribution, real estates, and other infrastructural development. Major Hong Kong companies including V-Tech, Gold Peak, Johnson Electrics, Hutchison and Hopewell have participated extensively in Gunagdong's industrial and infrastructural investments. In recent years, Hong Kong's investment in Guangdong has been diversified from manufacturing to the service sector. Hong Kong brand names are highly visible in Guangdong's retail sector.

Other major investors in Guangdong were from Taiwan, Japan, Virgin Islands, Singapore and the US. Many world leading multinationals such as IBM, Intel, Hitachi, Samsung, Nokia, Sony, General Electric, P&G, Amway, ICI, Ericsson, Siemens, Panasonic, Bosch, Toshiba, Sanyo, Nestle, Pepsi, Coca-Cola, Toyota and Mitsubishi have established their presences in Guangdong. Foreign investments have increasingly been channeled into infrastructure, agriculture, property and capital- and technological-intensive projects in recent years. Given China's is further liberalising its services sector, an increasing share of FDI is going into the service sectors.

Consumer Market

Guangdong is the largest consumer market in China with retail sales of consumer goods increased by 19.2% to RMB1,059.8 billion in 2007, accounting for 11.9% of the nation's total.

In 2007, annual per capita disposal income of urban households reached RMB17,699.3(+10.5%). With the rising income level and the economic structure adjustment, the consumer expenditure pattern is also undergoing structural change. While the share of food declined, the share of services such as transportation and communications, recreational, educational and cultural services increased.

Composition of Per Capita Expenditure of Urban Household (%)

2000

2007

Food

38.6

35.3

Clothing

4.6

5.7

Medicine & medical services

4.3

5.3

Transportation & communications

13.4

20.7

Household Appliances and Services

7.5

6.0

Recreational, Educational and Cultural Services

11.5

13.9

Residence

13.7

10.1

Source: Guangdong Statistical Yearbook, 2008

The retail distribution landscape in Guangdong is changing rapidly. Apart from traditional department stores, various forms of modern operation such as chain stores, supermarkets, ware-house type markets and convenience stores proliferate. The concept of shopping mall is promoted in the PRD where integrated shopping and entertainment centres are under construction.

Guangdong's retail market is one of the most developed markets in China. Major overseas-invested retail enterprises that have presence in Guangdong include Wal-Mart from the US, Carrefour from France, Jusco from Japan, Park'N shop, Watsons and Mannings from Hong Kong, Trust-Mart from Taiwan. Dozens of franchised chain stores (such as U2, G2000, Baleno, Bossini, Fortei, Giordano, etc.) from Hong Kong, and convenience stores such as 7-Eleven under Hong Kong Dairy Farm and Circle K have also entered Guangdong.

Economic Indicators of PRD Cities (2007)

Cities

GDP
(RMB bn)

Per Capita GDP (RMB)

Value-added industry output *
(RMB bn)

Retail Sales
(RMB bn)

Exports
(US$ bn)

Guangzhou

710.9

71,808

241.1

259.5

37.9

Shenzhen

680.2

79,645

329.9

191.5

168.5

Zhuhai

89.6

61,693

47.5

30.1

18.5

Foshan

360.5

61,199

233.2

94.7

26.2

Huizhou

110.5

41,044

50.3

35.4

14.6

Dongguan

315.2

46,027

143.1

69.6

60.2

Zhongshan

123.8

49,488

82.5

39.6

17.3

Jiangmen

110.7

37,779

57.6

40.9

8.7

Zhaoqing

59.3

35,695

16.8

19.7

2.2


* For all state-owned and other forms of enterprises with annual sales over RMB 5 million.
Source: Guangdong Statistical Yearbook 2008