Guangdong's growth surge shows slight slowdown
The Guangdong economy grew at a rate of 13 per cent in the first quarter, slowed by a drop in investment and exports, according to the Guangdong Provincial Bureau of Statistics.
First-quarter gross domestic product growth was down 0.7 percentage points compared with the same period last year, the bureau's vice-director Ou Weidong told a news conference.
Despite the slower growth, Mr Ou said it was impossible that the rate of growth would drop to 9 per cent, the target set by Governor Huang Huahua for the full year.
'I do not know why the provincial Development and Reform Committee set this goal,' he said. 'Maybe it is just symbolic.
'You can check with the data of the last several years during which they set the same targets of 9 per cent but at the end, the actual growth rate was 13 to 14 per cent.'
The total planned investment in newly-started projects was 92.63 billion yuan, down by 19.3 per cent, while planned investment in transport dropped sharply by 67.7 per cent.
Investment in industry also slowed, dropping by 11.6 per cent or 20.3 percentage points on a yearly basis.
Mr Ou said that greater difficulties in land requisition for projects had been the main cause of the drop in investment.
'We have been implementing the land requisition regulations strictly from last year. Projects, which have not completed compensation payouts for land, are totally prohibited from starting,' he said.Guangdong party secretary Zhang Dejiang issued strict land requisition rules in December 2005, soon after police shot dead at least three villagers protesting against the requisition of their land in Dongzhou.
Macro-economic control from 2004 also contributed to the slowdown of industry investment, Mr Ou said. He said the central government inspected provincial industries twice in 2006 and stopped industries with high energy consumption such as smelting, pressing of ferrous metals, petroleum and coking.
The expiration of the local government's terms since the middle of last year was another reason that caused the decline in the number of new projects as new local government needed time to prepare new plans, Mr Ou said.
Export was up 28.3 per cent or 0.4 percentage points slower, and the retail sales of consumer goods chalked up 260.07 billion yuan, up 15.8 per cent or 1.1 percentage points higher than in the same period in 2006.
The mainland was eager to lower its investment and exports while raising consumption in the last three years, Mr Ou said, adding the government was satisfied with the export and investment figures.
Figures showed a 2.1 per cent increase in the Consumer Price Index (CPI) which masked sharper rises in food prices. The price of grain was up 3.8 per cent and oil prices were 10.4 per cent higher.
Rate at which the Guangdong economy grew in the first quarter: 13%