Flat year ahead for Guang­dong trade, re­port warns

Low fore­cast re­flects lo­cal au­thor­ity’s de­ter­mi­na­tion to change eco­nomic growth model, ex­pert says

China Daily (Canada) - - BUSINESS - By QIU QUANLIN in Guangzhou qi­uquan­lin@chi­nadaily.com.cn

Guang­dong prov­ince, a long­time eco­nomic and ex­port pow­er­house in south­ern China, ex­pects its to­tal trade to ex­pand only 1 per­cent in 2014, a gov­ern­ment work re­port re­vealed on Thurs­day.

The re­port, which cited un­cer­tain global de­mand and the prov­ince’s ef­forts to de­velop a new eco­nomic growth model, was de­liv­ered by Guang­dong Gov­er­nor Zhu Xiao­dan at the open­ing of the an­nual lo­cal leg­isla­tive ses­sion.

“We will make more ef­forts to bal­ance trade, con­sump­tion and in­vest­ment to re­al­ize a healthy eco­nomic de­vel­op­ment model,” Zhu told deputies to the an­nual Guang­dong pro­vin­cial peo­ple’s congress, which opened in Guangzhou, the cap­i­tal of Guang­dong.

The trade growth tar­get is far lower than the ac­tual fig­ure for 2013, when Guang­dong’s to­tal trade ex­panded 10.9 per­cent to ex­ceed $1 tril­lion.

“We have made more ef­forts to trans­form and op­ti­mize the for­eign trade and eco­nomic struc­ture in the past few years to en­sure sta­ble trade growth,” said Zhu.

Ac­cord­ing to Zhu, ex­ports of new and high­tech­nol­ogy prod­ucts, as well as the ser­vice trade, grew quickly in 2013.

Years of ef­forts to trans­form the prov­ince’s trade struc­ture paid off, with ex­ports of orig­i­nal de­sign man­u­fac­tur­ing and orig­i­nal brand man­u­fac­tur­ing prod­ucts ac­count­ing for 63 per­cent of the to­tal last year, ac­cord­ing to Zhu.

“The in­creased ex­ports of such prod­ucts sig­naled that the pro­duc­tion method for tra­di­tional pro­cess­ing and trade busi­nesses has been op­ti­mized,” said Feng Shengping, a se­nior re­searcher with the Guang­dong Pro­vin­cial Sit­u­a­tion Re­search Center.

As of Dec 31, more than 7,500 com­pa­nies in Guang­dong that pre­vi­ously car­ried out pro­cess­ing trade had trans­formed into ODM and OBM ex­porters, ac­cord­ing to Guang­dong Cus­toms.

Lin Jiang, a pro­fes­sor at Sun Yat-sen Univer­sity, said Guang­dong’s low trade growth goal for 2014 rep­re­sented the lo­cal au­thor­ity’s de­ter­mi­na­tion to change its eco­nomic growth model.

“It sig­nals that Guang­dong will no longer rely heav­ily on trade to main­tain eco­nomic growth,” Lin told China Daily.

“Given the global eco­nomic and trade sit­u­a­tion, the prov­ince should change its eco­nomic growth model. Set­ting a lower trade growth tar­get means that Guang­dong has to de­velop new eco­nomic growth en­gines to sus­tain its lead­ing role in the coun­try’s econ­omy,” Lin said.

Ac­cord­ing to the gov­ern­ment work re­port, Guang­dong au­thor­i­ties will strive to ex­pand do­mes­tic con­sump­tion de­mand by pro­mot­ing Guang­dong’s prod­ucts across the coun­try.

The prov­ince will also ac­cel­er­ate con­struc­tion of com­merce and trade cen­ters and in­ter­na­tional pur­chas­ing towns out­side Guang­dong. Those steps will help build a do­mes­tic sales net­work to pro­mote prod­ucts made in the prov­ince, ac­cord­ing to the re­port.

Guang­dong will also con­tinue to “op­ti­mize” in­vest­ment, ac­cord­ing to the re­port.

In 2014, the lo­cal au­thor­i­ties will start con­struc­tion of 285 key in­vest­ment projects val­ued at 450 bil­lion yuan ($74.3 bil­lion), ac­cord­ing to the re­port.

“The re­port sends a strong sig­nal that Guang­dong will rely more on con­sump­tion and in­vest­ment to change its eco­nomic growth model and boost its eco­nomic de­vel­op­ment,” Lin said.

How­ever, Lin said that ac­tual trade growth this year would ex­ceed the 1 per­cent goal, given that the prov­ince re­mains the na­tion’s trade leader, with more than one-fourth of to­tal ex­ports and im­ports.

“A grow­ing num­ber of ex­porters in Guang­dong have be­come more con­fi­dent about over­seas mar­kets, es­pe­cially emerg­ing coun­tries and re­gions that are de­mand­ing more Chi­nese prod­ucts,” Lin said.

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