Guangdong gearing to top Taiwan economy

PUBLISHED : Tuesday, 11 July, 2006, 12:00am
UPDATED : Tuesday, 11 July, 2006, 12:00am

Governor confident the province will make up the US$8 billion gap by 2010

Guangdong's economy will overtake Taiwan's by 2010, making up the US$8 billion economic gap with its island neighbour by expanding at US$2 billion more than Taiwan on average every year, governor Huang Huahua says.

'We are confident that we will overtake Taiwan in 2010 because our average annual growth rate during the 10th Five-Year Programme [2000-2005] was in the double digits, whereas Taiwan grew at rates of more than 3 to more than 4 per cent,' Mr Huang said.

'Every year, our economy expands by US$3 billion, whereas Taiwan grows by US$1 billion or so. In five years, we will have expanded by US$10 billion [more than Taiwan].

'By 2010, we aim to have an economy of more than 3.35 trillion yuan and a per capita income of 34,400 yuan, double that in 2000.'

Mr Huang has been under pressure from the central government to maintain Guangdong's lead in economic growth and is expected to be affected by the ongoing leadership reshuffle.

Despite the rosy forecasts, he admitted that even when Guangdong's economy overtook Taiwan's, it would still lag behind the island in terms of scientific and innovative capacity.

Mr Huang said that in 1992, then leader Deng Xiaoping set Guangdong the goal of overtaking the Four Tigers - Hong Kong, Singapore, Taiwan and South Korea - in economic terms within 20 years. Guangdong reached the midpoint of its growth target last year when it outstripped Hong Kong.

Guangdong Academy of Social Sciences economist Cheng Jiansan said the province could overtake Taiwan next year or in 2008 but it would take until 2015 at the earliest to surpass South Korea.

'In terms of value, it is not a problem but it would not be significant because the make-up of the economies on the mainland, Hong Kong and Singapore is so different. We have to look at things like the per capita indicator,' he said.

Guangdong's per capita gross domestic product was nearly US$3,000 last year, whereas Hong Kong's exceeded US$25,000.

Professor Cheng said Guangdong already outstripped Taiwan in terms of its export-import trade but half of the trade volume was generated by foreign-invested businesses.

He said the gaps in social indicators, such as income disparity and the urban-rural divide, were even greater and Guangdong would not be able to reach the equity standards of the Four Tigers in 10 or 20 years.

In the 1990s, when Deng set his target for Guangdong, the economy was growing at more than 20 per cent a year.

But that rate has gradually slowed and last year laggard provinces like Jiangsu and Shandong caught up.

The Yangtze River Delta has also made rapid progress in the past few years, with its GDP at 3.38 trillion yuan last year. Those advances add to the pressure on Mr Huang, who is under orders from President Hu Jintao to ensure Guangdong keeps its lead.

Guangdong was confident and determined to continue setting the pace for economic development, Mr Huang said.