China's richest province wants more
By Olivia Chung
HONG KONG - South China's Guangdong province, one of the country's economic
powerhouses, has made another step toward its goal of economically overtaking
"the four little dragons of Asia" - Hong Kong, Taiwan, Singapore and South
Korea, as its gross domestic product (GDP) will overtake Taiwan's this year.
The wealthiest province on the mainland overtook Singapore and Hong Kong in
terms of GDP a few years ago. However, in terms of yearly per capita GDP,
Guangdong is still far behind compared with any of the four "little dragons".
Since Deng Xiaoping launched the reform and open-door policy in
the late 1970s, Guangdong cities on the Pearl River Delta such as Shenzhen,
Dongguan and Guangzhou have been magnets for foreign investment from or through
neighboring Hong Kong.
During Deng's visit to Guangdong in 1992, he challenged the province to meet
the goal of overtaking "the four little dragons of Asia" in 20 years.
Guangdong Governor Huang Huahua declared last week at a public function that
the province could overtake Taiwan this year and would continue to strive to
catch up with South Korea.
Chinese media quoted Huang as saying that Guangdong's GDP was expected to reach
more than US$390 billion for the whole of 2007, after registering a
year-on-year growth of 14.7% from January to October.
According to official estimates, Taiwan's economy is expected to grow 5 % to
more than $380 billion this year. In 1998, Guangdong's economy reached $103
billion and that of Singapore generated $82.8 billion. In 2003, the province's
economy hit $191.4 billion, surpassing Hong Kong's $158.5 billion.
"From 1991 to 2006, Guangdong registered an average annual economic growth of
14.4%, which was not only more than four times the average annual growth in the
world, but also higher than the average annual growth of 'the four little
dragons' in the 1970s when they experienced rapid growth," Huang said.
"Guangdong generated an economy of 2.6 trillion yuan [US$351 billion] last
year, increasing by 14.1% when compared with 2005. The figure doubled that in
2001 and accounted for one-eighth of the country's total," he said.
However, experts say it may not be easy for Guangdong to catch up with South
Korea in a few years. In South Korea, the Ministry of Finance and Economy in
July revised its GDP growth estimate for the whole of 2007 to 4.6% from 4.5%,
due to strong export and domestic demand. In 2006, South Korea's GDP grew by 5%
to $897.4 billion, due to popular demand for key export products such as mobile
phones.
That means currently the South Korean economy is twice as strong as
Guangdong's.
And, as noted earlier, in terms of per capita GDP, Guangdong is still a long
way behind Hong Kong and three other "Asian dragons", given its population of
more than 90 million - a figure which even does not include the rural migrant
workers from other provinces.
For example, the yearly per capita GDP of Guangdong reached 28,077 yuan in
2006, according to a report jointly released by Guangdong provincial Statistics
Bureau and the Guangdong Investigation Team of the China National Statistics
Bureau. The per capita GDP of Hong Kong reached $27,466 in the same year.
Cheng Jiansan, an economist with the Guangdong Academy of Social Sciences, said
given the greater gaps in income disparity and the urban-rural divide, the per
capita GDP of Guangdong in fact lags far behind that of Hong Kong and three
other "Asian dragons".
The province realized an urban per capita income of 5,283 yuan per year in the
first quarter of this year, while the rural per capita income was 1,716 yuan
per year, the increase rate of both lower than the GDP growth rate, partly due
to the provincial government placing too much emphasis on industrial
development, according to the report.
Besides, other mainland provinces like Jiangsu, Shandong and Zhejiang on the
Yangtze River Delta have been catching up with Guangdong in terms of GDP, Cheng
said.
Jiangsu's GDP, which ranked third in the country, reached 2.15 trillion yuan in
2006, increasing by 14.9% from 2005, while Shandong's GDP, which ranked second
in the country after Guangdong, reached 2.18 trillion yuan in 2006, up by
14.7%.
Zhejiang's GDP, which ranked the fourth in the country, reached 1.56 trillion
yuan last year, up by 13.6%.
Cheng said Guangdong's competitiveness has been threatened by other provinces
in recent years, so it should strengthen co-operation with other cities in the
region.
"With fierce competition coming from the Yangtze River Delta and the Bohai Bay
region, Guangdong was no longer the biggest production base in China," he said.
Yangtze River Delta cities such as Shanghai, Nanjing in Jiangsu province and
Hangzhou in Zhejiang province, started to attract investments from Taiwanese
and Japanese electronic firms in the 1990s.
The Bohai Bay region including Beijing, Tianjin municipality, Hebei province,
Dalian in Liaoning province and Qingdao in Shandong province, are all competing
to become the country's third economic powerhouse.
In order enhance its advantage Guangdong has joined hands with other provinces
in the region including Fujian, Jiangxi, Hunan, Hainan, Sichuan, Guizhou,
Yunnan provinces and the Guangxi Zhuang Autonomous Region as well as two
Special Administrative Regions of Hong Kong and Macau to develop as the biggest
economic bloc in the country.
The above Pan-Pearl River Delta account for about one-fifth of the mainland's
total land and have one-third of the country's population and one-third of the
country's GDP.
However, Guangdong lacks resources when compared with the Bohai Bay region,
which has undersea petroleum resources and rich mineral resources, and more
than 90% of Guangdong's energy resources are imported
Compared with the Bohai Bay region and the Yangtze River Delta region,
Guangdong has also lags behind in developing its information technology and
financing sectors.
In recent years, Guangdong has been plagued by the combination of a chronic
shortage of labor and increasing cost of doing business, which has forced
itself to develop tertiary industries such as the service industry and less
emphasis on its original manufacturing base.
Ding Li, an economist with the Guangdong Academy of Social Sciences, however,
said Guangdong should not place too much emphasis on developing its service
industry and instead concentrate on the manufacturing sector. industry.
"Guangdong still relies heavily on the manufacturing industry for economic
growth, and production-demand services such as logistics, financial and
information technology should be strengthened," he said.
Olivia Chung is a senior Asia Times Online reporter.
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