Growth in Guangdong edges forward
Guangdong's economy showed initial signs of improvement last month, but a strong rebound is not expected in the near future, the provincial statistics bureau says.
The growth rate of the province's industrial output, fixed-asset investment, retail sales and local government revenues all picked up in June from the previous month, indicating the economy had stabilised after slowing down over the past few months, the bureau said.
The southern coastal province, which was the export powerhouse of the mainland, was seen as a bellwether of the country's economy because any changes in its situation usually took place three to six months before other regions, the bureau said.
In the first half of this year, the Guangdong economy grew 7.4 per cent from a year ago, lagging the 7.8 per cent expansion posted by the mainland.
However, June growth of industrial output edged up 0.4 percentage points from May, fixed-asset investment accelerated 6.7 points, retail sales improved 1.9 points and local government revenue rose 6.3 points.
'There are clear signs that the short-term economic outlook is getting better,' the bureau said. 'However, a strong rebound is unlikely as the stimulus policies introduced recently will show effects from as early as the fourth quarter.'
In April, the mainland shifted its focus from fighting inflation to stabilising growth, after growth in the first-quarter gross domestic product touched a three-year low of 8.1 per cent. Since then, the government has sped up approvals for investment projects, cut interest rates and issued guidelines to encourage private investment in some industries dominated by state-owned enterprises such as railways, energy and telecommunications.
According to the bureau, the lower-than-average economic growth in Guangdong was the result of crimped external demand because of the European debt crisis as well as efforts to restructure factories so they can produce higher value-added products, part of a government goal.
Plant closures have been widely reported in the province as companies have been hit by rising costs and weaker demand.
Ares Asia, a shoe manufacturer for brands including Merrell and Timberland, had closed five plants in Guangdong in recent years because it could not pass on increasing costs in labour, land and other areas to customers, the Shanghai-based National Business Daily reported yesterday. The company could not be reached immediately for further comment.