An Economic Overview
Since the reform and opening up was initiated, Guangzhou has enjoyed a fast and sustainable growth. The city’s gross product has increased by 45 times (calculated at comparable price) from 4. 09 billion yuan in 978 to 705.078 billon yuan in 2007 and its GDP Per Capita, by times (calculated at comparable price) from 907 yuan to 71 , 219 yuan in the same period.
With sophisticated industrial clusters and a strong industrial foundation, Guangzhou has been one of the country’s key manufacturing bases. Its industrial development has entered into a new stage which features with heavy and chemical industries. The three pillar industries, namely automobile, petrochemicals and electronic information, have constituted a modern industrial system with a complete range of products, excellent comprehensive auxiliary service, and strong scientific research and development capability.
Meanwhile, biomedicine has been developed into a new pillar industry while hi-tech and modern service industries emerge as a new growing highlight of Guangzhou’s economy. In this way, Guangzhou has strengthened its economic impacts on surrounding regions as the trade, finance, technology and information center in South China.
Guangzhou has a huge consumption market and a commodity-distributing center as well.
The city ranks the first among the top ten Chinese cities with over 100,000 retailing stores, or 25.7 retailing stores per 1,000 people. Its diversified commercial network consists of large-scale shopping malls, warehouse-like wholesale or retailing supermarkets and terminal markets. In 007, the total retail sales of consumer goods was259.5 billion yuan and the wholesale and retail sales realized 1099.658 billion yuan. In wholesale and retail sale trades above designated size, the retail sales of automobiles increased by 25% and those of various kinds of jewelry and goods for education, office, sports and entertainment purposes, by more than 30%. Statistics released showed that Guangzhou plays a significant role in China’s consumption market. Meanwhile, the city, with its strong influence, exerts direct and leading impacts on the consumption of 40 million wealthy consumers in the Pearl River Delta.
Relevant Websites for Policy Consultation
If you want to learn the relevant policies related to foreign trade and economy, please feel free to consult: http://www.gov.cn or http://www.mofcom.gov.cn;
As to the relevant policies and rules released by the Guangdong Provincial Government,please refer to http://www.gd.gov.cn or http://www.gddoftec.gov.cn
For more information related to the policies and rules issued by Guangzhou MunicipalGovernment, you are welcome to the websites: http://www.gz.gov.cn or http://www.gzboftec.gov.cn
Follow the smart money
In another era, a city called Canton was well known to businessmen throughout the world who came here to trade with the world’s most populous country. But these days, Guangzhou sometimes requires a longer introduction.
Guangzhou is in fact a city with more than 2,000 years of history. It is known as the cradle of Buddhism in China, and has been a test-bed of intellectual, economic, and political reform for the country throughout the centuries. In recent history, it is perhaps best known as the place where Sun Yat-sen began the Republican revolution in 1911 that established the modern Chinese state.
In the first few decades after the Communist Party came to power in 1949, when the city took the pinyin style of writing its name, its commercial vibrancy, like the rest of the country, was subject to waves of political change, much of which was unknown to foreigners. Since 1978, however, once the late Deng Xiaoping opened China to the world, Guangzhou has wasted no time reclaiming its position as a commercial hub in the world’s fastest-growing big economy.
Guangzhou has a long and distinguished history of international trade. In the 1980s and early 1990s, the city was the envy of the country, as Deng’s reforms were focused on Guangdong. Once the open-door policy was extended northward, the media spotlight was widened, yet Guangzhou has remained as productive as ever. The city had a GDP of US$81 billion in 2006, a per-capita GDP nearing US$10,000, and it is still growing very fast – by more than 12 percent in 2006.
As a result, perhaps, those foreign companies that have chosen to focus on Guangzhou as the hub for their regional operations have been well-rewarded. There are more than 151 members of the Fortune 500 invested here, and their profitability has, according to the surveys by the American Chamber of Commerce, led them to continue to increase their investments at a rapid pace in recent years. As AmCham president Harley Seyedin is so fond of saying, ”This is where the smart money is.”
Hype aside, the city’s commercial strength is obvious. Its hinterland of the Pearl River Delta is still the best place in the world to run a manufacturing plant, and will become more so as transport links to the poorer inland provinces grow under the Pan-PRD framework. Guangdong’s factories continue to crank out most of the world’s clothing, footwear and toys, and product lines keep moving up the value chain. Standing at the Pearl River Delta’s centre, geographically and politically, Guangzhou has been profiting like no other.
And now, with 2010 fast approaching, Guangzhou is transforming itself yet again. Heavy industry, hi-tech manufacturing and the services sector are pushing per-capita incomes to levels that will make Guangzhou the first city in China to attain the central government’s goal of being a comfortable- income city. An indication of this trend can be seen in the way Guangzhou residents spend their money: dining out is a passion. According to a recent nationwide survey by the Ministry of Commerce, they spend RMB 4,143 (US$512) per person per year on restaurants, nearly seven times the national average and three times as much as the runner-up.
Admittedly, despite its wealth, Guangzhou is sometimes hard to appreciate for its natural attractions. Decades of breakneck growth have left their toll on the environment, and traffic can be difficult at times. Nevertheless, these are challenges faced by most cities in China, and Guangzhou is undoubtedly showing rapid and sustainable progress in tackling them.
Moreover, for all its lack of glamour, Guangzhou has a way of getting under the visitor’s skin. Its people are not known for putting on airs. They don’t dress up ostentatiously – which might explain why there is no Tatler here – yet they are known for their generosity. The restaurants seldom dazzle with their décor, but the food is delicious. The shop- front might be nondescript, but the interior will be buzzing with custom. The neighborhood can be densely packed, but its streets will be humming with community spirit. This is not a city of facades. What you see is what you get.
There is an obvious reason for this lack of pretension, besides the innate pragmatism of the Cantonese. Guangzhou has been exposed to the vagaries of a market economy long enough to anticipate its inevitable ups and downs. Property bubbles have popped here several times since reforms began. Export- oriented firms have keenly felt the effect of interest-rate and exchange-rate fluctuations in the global economy. Everyone is more careful with their money, and more careful about who they do business with.
That said, Guangzhou is also learning how to better spend it. Porsches, Rolls Royces and Bentleys can now be seen cruising along elevated highways that have sprung up in the past five years to ease traffic congestion. Long-promised infrastructure projects such as the new MTR lines are coming to fruition, bringing more shoppers into the mammoth malls of the Tianhe district. The new Baiyun International Airport is sending more people overseas each month, and they are coming back with heightened lifestyle expectations. These are starting to be met by the five-star hotels, which are upgrading in anticipation of the arrival of several international chains over the next few years.
None of this change is happening in a flash. The effect is often felt only months after the necessary regulations are issued. For instance, rules prohibiting advertisements from blocking pedestrians’ right of way, including the ubiquitous xiaolingtong (short-range mobile phone) antennae, have only recently started to make a difference. Motorcycles have been banned from the city center. since last year, and the improvement to traffic and pollution is already being felt. It will take awhile for many of these policies to make a substantial overall impact, yet change is noticeable.
Guangzhou’s task to revamp its image is a challenge, no doubt. Yet what is often overlooked is that it is more of a collective task here than in other Chinese cities: a large share of the economy is in private hands. What makes Guangzhou a laggard in the beauty stakes often makes it a leader in joint public-private initiatives: the government knows how to work better with investors to achieve common aims.
Flexible policymaking goes a long way to explaining the sustained growth in fixed-asset investment. They might be little known to foreigners, yet big corporations like the Kingold Group and Fuli Real Estate Development have chosen Guangzhou as their home base for a reason. There is less red tape, and it is easier to find customized regulatory solutions to the challenges of doing business in a rapidly changing country.
Foreign investors are certainly not taken for granted here, as Guangzhou has the longest history of any Chinese city in dealing with the outside world. The 49 -year-old bi-annual trade extravaganza, the Canton Fair, continues to pull them in. At last year’s October session, overseas buyers from many countries turned up to meet mainland suppliers, generating nearly US$30 billion in deals. Socially, every April and October the city is transformed as “the fair” comes to town.
As readers will discover on the following pages, there are good reasons for foreign visitors to stick around and become expatriates. The expatriate population, estimated at around 25,000, consists of a people from a wide variety of countries. Chambers of Commerce, meanwhile, are thriving: the American Chamber of Commerce in Southern China has nearly 1,000 members.
Proximity to Hong Kong and the experience gained from its investors have naturally been instrumental to Guangzhou’s success. The Kowloon-Guangzhou train brings in 8,000 passengers a day, more than the ferries going into the rest of the PRD combined. Unsurprisingly, the Hong Kong Chamber of Commerce in China has an active team closely linked to the Hong Kong Trade Development Council’s office in Guangzhou.
Hongkongers have the advantage of a common language and culture. Recently, however, many commentators in Guangzhou have begun to question a key component of Cantonese culture – the uniquely pragmatic approach to life’s challenges. Some wonder whether this pragmatism has also served to suppress many of the city’s ambitions.
Indeed, it is only in the past few years that an awareness has emerged in society of the need for Guangzhou to dust itself off and gain more national and international prominence. The government has been pushing through mega-projects on an eye-popping scale. The new international exhibition centre is Asia’s largest. The 20 billion-yuan international airport, which opened in 2003,has 50 square miles of land to grow into, and has attracted Federal Express to set up its regional hub there. The extension of the MTR will by 2010 add another third to its capacity. Then there is the creation of a massive car-manufacturing cluster to the south, which will eventually become the biggest in China.
Yet all of these mega-projects are just a taste of what is to come. The one being spoken of as a watershed in Guangzhou’s evolution is the 2010 Asian Games. The sporting spectacle may not mean much to outsiders, but in Guangzhou it is being treated as if it were the Olympics. Like what is happening in Beijing with the 2008 extravaganza, it is hoped that the Asian Games will be Guangzhou’s coming-out party, a chance to show the world – and its own people – that Guangzhou is as deserving of a place in history as Canton once was.
Indeed, Guangzhou is ready to take its place on the world stage with pride in its economic,social and cultural accomplishments.