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          BIZCHINA> News
          China economic hubs face tough times amid crisis
          By Xin Dingding in Beijing and Wang Zhenghua in Shanghai (China Daily)
          Updated: 2009-01-09 07:36

          China economic hubs face tough times amid crisis

          An aerial view of the Pudong New Area in Shanghai is shown in this file photo taken on November 10, 2008. [Xinhua] 

          Guangdong and Shanghai, the two economic powerhouses of China, have suffered setbacks because of the global financial crisis and forecast even worse prospects.

          Guangdong province, which neighbors Hong Kong and is host to a large cluster of export-oriented manufacturing units, now faces the most severe challenge since the Asian financial crisis in 1998, Deputy Governor Huang Longyun said Thursday.

          China economic hubs face tough times amid crisis

          The province's GDP growth last year was 10.1 percent, down from 14.7 percent in 2007, while its exports grew by just 5.6 percent, down from 22.3 percent from the previous year, Huang told a news conference in Beijing.

          In terms of GDP, Guangdong's economy crossed Singapore's in 1998 and Hong Kong's in 2003. It caught up with Taiwan when it topped 3 trillion yuan ($439.2 billion) in 2007, making up nearly one-eighth of the Chinese mainland's total GDP.

          The latest figures from Shanghai have been so alarming that city-based economists say the municipal government would have to try its best to "prevent East (China) from falling".

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          According to the Chinese-language magazine, Caijing, Shanghai's industrial output saw a record double-digit decline in December 2008.

          The city's revenue in the first quarter of this year, too, could be worrisome, Caijing quoted city mayor Han Zheng as having said.

          Shi Lei, professor of Fudan University and a consultant to the Shanghai municipal government, said the slowdown had exposed the city economy's structural problem, or its lack of competitive edge in manufacturing technologies and high-end services, compared with provinces neighboring it.

          The threat to the economy is also reflected in the discouraging job market data.

          Guangdong Deputy Governor Huang said the slowing economy might have forced as many as 600,000 migrant workers to leave the South China province and return home last year.

          In other words, nearly one in every three migrant workers employed in Guangdong might have left. According to Guangdong-based Nanfang Monthly, about 19 million workers from outside the province had been working there at the end of 2007.

          Officials, however, said, Guangdong would not abandon its ambition to develop into a world-class manufacturing and service base. Nor would it halt its efforts to raise its per capita GDP from the existing $7,000 to $20,000 by 2020.

          Much closer business ties will be forged between the province and Hong Kong and Macao, said Cheng Jiansan, an economist with the Guangdong Academy of Social Sciences.

          Policies are being drafted, said Huang, to provide more help to Hong Kong businesses to sell their products on the mainland.


          (For more biz stories, please visit Industries)

           

           

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