GUANGDONG PROVINCE
General Background
Guangdong - abbreviated as Yue - is located in
southern China adjacent to Hong Kong. The province's capital city is
Guangzhou.
Guangdong was one of the two provinces in China
that were firstly opened to foreign direct investment by means of special
economic zones. In 1980,
three special economic zones (SEZs) -- Shenzhen SEZ, Zhuhai SEZ and
Shantou SEZ -- were established
to attract technology transfers.
To attract foreign investments, favourable policies were granted
by the State Council to these SEZs which include a high degree of autonomy
to handle its economic affairs and tax benefits.
In 1985, the state designated the whole Pearl
River Delta as an open economic zone.
Most counties and towns of Guangdong are now open to foreign
investors and enjoy favourable economic policies.
The open zone include Guangzhou, Shenzhen, Zhuhai, Shantou, Shaoguan,
Heyuan, Meizhou, Huizhou, Shanwei, Dongguan, Zhongshan, Jiangmen, Foshan,
Yangjiang, Zhanjiang, Maoming, Zhaoqing, Qingyuan, Chaozhou, Jieyang
[1]
.
Guangdong is endowed with a wealth of mineral
reserves, of which pyrite, zircon and silicon rank first in China in
terms of deposits and output.
Besides, offshore oil reserves is abundant.
The province is China's fifth largest crude oil production base
with an annual output of over 12.8 million tons in 1999.
Guangdong's sub-tropical weather is favourable
for agriculture. The province's
agricultural output ranked the fifth in the country. Of which production
of sugar is the third largest. Besides, Guangdong has a strong fishery and aquaculture industry
which ranked the first in the country in 2000.
Infrastructure
Water Transport ⌒ Guangdong has more than 51 state-approved ports. In recent years, container ports at Shenzhen
have developed rapidly. Some
54% of Shenzhen's total container throughput was handled in Yantian,
while 27% was handled in Shekou and 16% in Chiwan. Yantian International Container Terminals
(YICT) is capable of accommodating the 4th generation container vessels.
Yantian, which is now the second largest in China in terms of
container handling capacity, is able to handle more than 2 million TEUs
a year. When the planned
Phase 3 expansion project is completed, Yantian will be able
to play a more active role in promoting Shenzhen's overall port transportation
service.
At present, there are regular direct calls at
Shenzhen's ports by major shipping operators such as the Global Alliance,
Hapag-Lloyd, P&O Containers, Maersk Line, Sea-Land Service, Hanjin
Shipping, Hyundai, Merchant Marine, Mediterranean Shipping Company,
Norasia Lines and Madrigal Wan Hai Lines. Improvements in port services
including computerisation of the inspecting network and simplification
of the inspecting procedures have brought the port's customs procedures
closer to the international practices.
Railways ⌒ The province is a major railway hub in southern China, providing easy transportation
to most parts of the country. Major railways running through the province include the Beijing-Guangzhou
Lines and the Beijing-Kowloon Railway. The opening of the Beijing-Kowloon Railway
has shortened the travel time between Guangzhou and Beijing to only
27 hours.
Travel time from Guangzhou to Shantou was also
shortened to about 10 hours with the Guangzhou-Meizhou-Shantou Line. A new railway ⌒ the Guangdong-Hainan railway
thoroughfare connecting Zhangjiang in Guangdong with Sanya in the Hannan
Island ⌒ is under construction. This
will be the first crossed-seas railway in China. The northern part of the railway thoroughfare will be put into
trial service towards the end of 2001 and the whole project is expected
to be completed in 2003.
Highways ⌒ Road links have been greatly improved with the completion of Guangzhou-Shenzhen
Expressway and numerous locally-funded highways such as the Shenzhen-Shantou
Expressway. The Humen Bridge
which connects the Guangzhou-Shenzhen Expressway with the Guangzhou-Zhuhai
Highway is already complete and in operation. During the Ninth Five-Year Plan, coastal
expressways have been planned to be built on the eastern and western
parts of the province. The
Guangdong authorities also plan to build a network of 25 major roads
linking major cities of the province with Hong Kong and Macau.
Air Transport ⌒ The province has 7 civil airports (including Guangzhou Baiyun, Guangzhou
Huadu, Zhuhai, Shenzhen, Shantou, Zhanjiang). Direct flight services are available to most major domestic
cities. There are also
international flight services to Manila, Bangkok, Singapore, Brisbane,
Jakarta, Kuala Lumpur, Los Angeles, Melbourne, Sydney, Seoul, and Hong
Kong at the Guangzhou Baiyun International Airport.
A new Baiyun International Airport was approved by the State
Council in July 1997 and is currently under construction. It is expected to complete by 2010 to handle 80 million travellers
and one million tons of cargo annually.
Telecommunications ⌒ Guangdong has one of the most advanced telecommunication networks in the
country. At the end of
2000, mobile phone subscribers in Guangdong were over 12.5 million,
accounting for about 12% of the countryˇs total.
By the end of March 2001, the mobile phone penetration of population
was 18.4%, ranked third after Beijing and Shanghai.
With a sophisticated telecommunications network,
ATM systems are now adopted by banks in Guangdong. Electronic data interchange
(EDI) systems are also introduced in Guangdong to enhance communication
between banks, manufacturing enterprises and the customs offices.
Electricity ⌒ Electricity supply in the province is ample. The total installed electric power generating capacity in the
province was over 30 million kWh by end-1999. Except the existing Daya Bay Nuclear Power Station which has
a capacity of 1.8 million kWh, the provincial government plans to build
a second nuclear power station near the Daya Bay.
Industries
In 2000, the province's total industrial
output was Rmb1,224.5 billion (+19%), ranked the highest among all provinces
in China. Major industrial
production bases included Guangzhou, Shenzhen,
Foshan, Huizhou and Zhuhai.
Guangdong is the largest light industry production base
in China. Output of light
industries accounts for over half of the province's total industrial
output. Guangdong-made
consumer products including electrical appliances
such as television sets, electrical fans and refrigerators, garments,
bicycles, toys, shoes and electronics items are popular among Chinese
consumers.
Besides, Guangdong has developed into a major export-processing
base for investors from Hong Kong, Macau and other
foreign investors. Foreign-invested enterprises (FIEs) now account for
about 60% of Guangdong's industrial output. However, Guangdong's industries rely heavily on other provinces
and imports for raw material supplies, such as cotton, coal, plastic
chips and paper pulps.
In the coming years, the province will invest heavily
in infrastructure projects; develop a strong production base of automobile,
electronics, iron and steel, building materials; and expand the tertiary
sector.
Tourism
Guangdong attracts a large number of business visitors each year due to
its role as a trade center in southern China. In addition, a number of theme parks including the "the
Window of the World" in Shenzhen, "the Grand View of the World"
in Guangzhou have been developed in recent years to attract tourists. The province received more than 12 million
tourists in 2000, up 36.8% over 1999 and generated total revenue of
US$4.1 billion, up 25.7% from 1999.
Consumer Market
Guangdong is the largest consumer market in China though its population
ranks the 4th largest among all provinces, municipalities and autonomous
regions. Retail sales of
consumer goods increased by 11.4% to Rmb407.2 billion in 2000, accounting
for 12% of the country's total.
Guangdong's retail sector is one of the most developed in China with a
broad mix of retail outlets including department stores, shopping malls,
supermarkets, specialty stores, chain stores and warehouse clubs. Guangzhou
and Shenzhen were selected by the State Council in 1992 as two of the
11 designated pilot cities to establish pilot Sino-overseas joint venture
retail enterprises with import & export rights.
The Guangzhou Hualian-Broadway Co. Ltd., Guangzhou Zhengjia Enterprise
(Commercial) Co. Ltd. and the Shenzhen Wal-Mart were approved by the
State Council as three of the 19 pilot retail JVs in China. Other major
overseas-invested cooperative retail enterprises approved by the local
government include Chia Tai Makro from Thailand, Wal-Mart from the US
in Shenzhen, Carrefour from France, Jusco from Japan, and dozens of
franchised chain stores (such as U2, G2000, Baleno, Bossini, Fortei,
etc.) from Hong Kong.
Major department stores and shopping centres in Guangdong include Guangzhou
Friendship Department Store, Guangzhou Department Store, Guangzhou Xindaxin
Co., Nanfang Shopping Centre, Dongshan Department Store, Shenzhen Duty
Free Shop Enterprises Group, Guangzhou Chia Tai Makro Co., Zhuhai Duty
Free Shop Enterprise Group, Shenzhen Wanjia Department Store Co., Fushan
Xinghua Shareholdings Co., Shenzhen Tianhong Department Store Co., Guangzhou
Huaxia Department Store, Zhuhai Department Store Co., Guangzhou Wangfujing
Department Store Co., etc.
Foreign Trade
Guangdong's external trade totalled US$175.5 billion (+22.3%) in 2000,
accounting for 39.8% of the country's total and ranked the top among
all provinces and municipalities.
Exports amounted to US$93.4 billion (+18.5%) in 2000. Major export items included agricultural
products, chemicals, electrical appliances, electronics, textiles, garments,
toys and shoes. Hong Kong
is Guangdong's largest export market, accounting for 34% of the province's
total. Other major markets
included the US, the EU, Japan and Taiwan.
Imports totalled US$82.1 billion (+26.9%) in 2000. Major imports included raw material and
other resources-based intermediate goods, electronics, machinery, and
complete set of equipments. Major
import sources included Japan, Taiwan, Republic of Korea, the US and
the EU.
Foreign Investment
Guangdong ranked the top in attracting foreign investment
among all provinces and municipalities. In 2000, the province approved 4,243 (+40.8%) foreign-invested
projects with contracted capital of US$11.5 billion (+109.1%).
However, actual utilized foreign investment in the
year dropped by 3.4% to US$11.3 billion.
Foreign investments in Guangdong
are mainly engaged in manufacturing industries including computer accessories,
computer, biological products, mechanical and electrical products, refined
chemicals, toys, garments and hardwares. Many world top multinationals such as
P&G, Amway, ICI, Erission, Nestle, Pepsi, Coca-Cola and Mitsubishi
have established their production bases in Guangdong. Foreign investments
have increasingly been chanelled into infrastructure, agriculture,
property and capital- and technological-intensived projects in recent
years.
Hong Kong is the largest source of foreign direct investment
in Guangdong. Up to 1999,
there were 63,144 investment projects were funded by Hong Kong companies
with a total contractural foreign capital of US$119.3
billion.
Hong Kong's investment mainly involved in electronics,
toys, garment, shoes, plastic, computer and accessories, commerce, food
catering, materials warehousing, distribution,
real estates, and other infrastructural development. In recent years, Hong Kong's investment in the Guangdong's
province has been diversified from manufacturing to the services sector.
Other major investors in Guangdong were from the Virgin
Island, Taiwan, Singapore, and the US.
FIEs played an increasingly important role in Guangdong's economy.
Their exports in 2000 rose by 25.6% to
US$49.5 billion, which accounted for 41% of all FIEs' exports in China
and 53% of the province's total exports.
Foreign investments were mainly concentrated in Shenzhen, Guangzhou, Dongguan,
Foshan, Zhuhai, Shantou and Huizhou. In 1999, Guangzhou's export reached US$9.9 billion, accounting
for12.7% of the province's total. Hong Kong was the major trading partner
of Guangzhou, accounted for 33% of the cityˇs exports in 1999. Hong Kong was also the largest foreign
investors in the city with contractual and actual FDI amounting to US$670
million and US$1.3 billion respectively in 1999.
According to Guangdong's strategies
for the coming decade, Guangzhou, Shenzhen, Zhuhai, Foshan, Dongguan
and Zhongshan (i.e. the centre of Pearl River Delta) will be developed
into a commercial, trade, and hi-tech manufacturing centre; while Huizhou,
Zhanjiang, and Shaoguan will become key production
centres for automobiles, petrochemicals, iron and steel; and the relatively
less developed mountainous regions of Heyuan, Shanwei, Meixian, etc.,
will strive to attract more overseas investments in order to exploit
local natural resources and to take advantage
of the region's low wages. Besides, Zhaoqing and Qingyuan will focus on the development
of tourism, with participation by overseas investors.
To reform the existing processing trade system, the Chinese
government has selected 15 pilot cities to establish
export processing zones. Guangdong
is selected as one of the provinces in this trial program.
Export processing zones are special restricted areas administered
by the Customs, which only engage in processing products for export. Enterprises concerned with export processing, storage and transportation
are allowed to be set up in the zones.
Major Economic & Technological
Development Zones (ETDZs)
1. The Pearl River Delta Open Economic
Zone
The Pearl River Delta Open Economic Zone covers an area of 42,000 sq. km. (or about 25% of the province's
area) with 14 cities and towns
which include Guangzhou, Shenzhen, Zhuhai, Fushan, Jiangmen,
Dongguan, Zhongshan, Huizhou city, Huiyang county, Huidong county, Poluo
county, Zhaoqing city, Gaoyao and Sihui.
The zone's population, GDP and retail sales of consumer goods
accounted for 31%, 76% and 68% of the province's total in 1999.
2. Shenzhen Special
Economic Zone
Covering an area of 391 sq.km, has been developed into an export-oriented
economic zone since its establishment in 1980. Its most developed industries include electronics,
toys, food processing, textiles and garment. By end-1999, a total of 23,608 foreign
investment projects with contracted investment of US$29.8 billion were
signed. Actually utilised
foreign capital totalled US$20.1 billion.
Nearly 75% of foreign investment in Shenzhen came from Hong Kong. Those projects mainly involved in producing
electronics, telecommunication tools, light building materials and machinery.
In recent years, Hong Kong investments have been diversified into the
tertiary sector including property development, tourism, entertainment
business, and computer services provision.
Exports by the zone grew by 26.4% in 2000. The city's exports,
totalled US$16.1 billion, accounted for 6.5% of the country's exports.
The hi-tech industry, especially the electronic and IT industries,
dominate Shenzhen's export-oriented processing trade.
Zhuhai Special Economic Zone
Covering an area of 121 sq.km, Zhuhai SEZ has developed into an export-oriented
economic zone since its establishment in 1980.
The zone's major industries include electronics, toys, food processing,
textiles and garments, and petrochemicals. The local government strives
to develop the zone into a hi-tech production base.
In the 1990s, Zhuhai has utilised more than 3 billion of foreign direct
invesmtent. Most foreign investments involved in property development,
tourism, electronics, garments, foodstuffs, toys, footwear, plastics
and other light industries. Major investment sources include Hong Kong,
Macau, Taiwan, Japan, the US and the EU.
In 2000, the zoneˇs exports grew by 30.1% to US$2.9 billion.
Shantou Special Economic Zone
Covering an area of 376 sq.km, Shantou SEZ was established in 1980 with
the approval of the State Council to attract foreign direct investment
and develop export-processing trade.
Major industries in the zone include chemicals, electronics,
pharmaceuticals, textiles, machinery and garments. The zone is expected to become a powerhouse of hi-tech industrial
development in a decade. In
the coming years, Shantou will focus on developing electronics and information,
bio-engineering, new materials and photo-electric industries. The city will specially build six centers
involving high-tech industrial development, modern agricultural demonstration
and experiments, technological innovations, maritime developments.
5.
Economic and technological development
zones
Apart from the designated open economic zone and special economic zones,
Guangdong has 11 state-level economic and technological development
zones, 6 bonded zones and 59 provincial-level economic and technological
development zones.
The state-level ETDZs include:
(1)
Guangzhou Economic and Technological Development Zone
(2)
Zhanjiang Economic and Technological Development Zone
(3)
Nansha Economic and Technological Development Zone
(4)
Huizhou Zhong Kai New and High-Tech Development Zone
(5)
Foshan New and High-Tech Development Zone
(6)
Guangzhou Nansha Economic and Technological Development Zone
(7)
Shenzhen Industrial Park
(8)
Daya Bay Economic and Technological Development Zone
(9)
Guangzhou Tianhe New and High-Tech Development Zone
(10) Zhongshan
Torch New and High-Tech Development Zone
(11) Zhuhai
New and High-Tech Development Zone
6. Bonded zones
The six bonded zones include:
Futian Bonded Zone, covering an area of 1.35 sq km, was approved by the
State Council in May 1991. Overseas investent projects in import and
export trade, information, consultancy serices, commodities exhibition,
transaction and membership market, hi-tech and export-oriented manufacturing,
high value-added assembling and compensation trade, bonded warehousing,
finance, telecommunication and other tertiary industries are especially
enouraged.
In 2000, total exports of the Futian Bonded Zone grew by 42.9% to reach
US$1.1 billion, while industrial output grew by 29.5%. On entering 2001, exports and industrial
output continued to increase by 115% and 198% respectively in the first
five moths.
Guangzhou Bonded Zone, was approved by the State Council in May 1992. Both overseas and domestic investors
are encouraged to invest in product processing, international trade,
bonded warehousing, commodities exhibitiion, transportation, financial
services, and telecommunications.
In 2000, the amount of utilized foreign direct investment grew by 18% to
reach US$72 million, while total trade surged by 94% to US$775 million.
Yantian Bonded Zone, was approved by the State Council in September 1996.
Zhuhai Bonded Zone, was approved by the State Council in November 1996.
Targetted to attract foreign investment in export processing
and re-export trade. In 2000, the amount of utilized foreign direct investment grew
by 262% to US$50.8 million.
Shatoujiao Bonded Zone, was formally set up in 1991. The major three industry sectors existing
in the zone are computer parts, jewellery and electronic toys.
Shantao Bonded Zone, has an accumulated industrial output at RMB2.3 billion
by July 2000 and total trade reached US$2.1 billion.
Economic Indicators
|
|
1999
|
2000
|
|
Economic
Indicators
|
Value
|
Growth
|
Value
|
Growth
|
|
|
|
(%,
y-o-y)
|
|
(%,
y-o-y)
|
|
Area (sq km)
|
177,901
|
--
|
177,901
|
--
|
|
Population (mn)
|
72.7
|
1.8
|
86.4 ^
|
1.8
|
|
Gross Domestic Product (RMB bn)
|
846
|
9.5 *
|
951
|
10.5
*
|
|
Per Capita GDP (RMB)
|
11,739
|
5.0
|
N/A
|
N/A
|
|
Income Per Capita
|
|
|
|
|
|
- urban (RMB)
|
9,126
|
3.2
|
9,762
|
7.0
|
|
- rural (RMB)
|
3,629
|
2.9
|
3,654
|
0.7
|
|
Fixed-assets Investment (RMB
bn)
|
293.7
|
11.1
|
320.6
|
9.2
|
|
Added Value Output
|
|
|
|
|
|
- primary industry (RMB bn)
|
102.1
|
1.6
|
99.0
|
-3.0
|
|
- secondary industry (RMB bn)
|
426.4
|
6.8
|
485.3
|
13.8
|
|
- tertiary industry (RMB bn)
|
317.9
|
8.8
|
366.3
|
15.2
|
|
Retail Sales (RMB bn)
|
365.6
|
10.2
|
407.2
|
11.4
|
|
Inflation (Consumer Price Index,
%)
|
-1.8
|
|
1.4
|
|
|
Exports (US$ bn)
|
78.8
|
3.2
|
93.4
|
18.5
|
|
- by FIEs (US$ bn)
|
39.4
|
0.6
|
49.5
|
25.6
|
|
Imports (US$ bn)
|
64.7
|
17.2
|
82.1
|
26.9
|
|
- by FIEs (US$ bn)
|
33.9
|
6.9
|
42.5
|
25.4
|
|
Foreign Direct Investment
|
|
|
|
|
|
- number of projects
|
3,013
|
-30.7
|
4,243
|
40.8
|
|
- contracted amount (US$ bn)
|
5.5
|
-40.2
|
11.5
|
109.1
|
|
- utilized amount (US$ bn)
|
11.7
|
-3.0
|
11.3
|
-3.4
|
Notes: * In
Renminbi real term
^ Latest full
population census figure, 1999 figure was estimation based on previous
census.
Sources: Statistical
Yearbook of Guangdong and National Bureau of Statistics of China
UK -China Business Links.
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