Restructuring is credited for a growth rate predicted to hit 15.2pc this year Economic restructuring is underpinning Guangzhou's growth, driving its expansion at breakneck speed despite nationwide macroeconomic controls, city leaders said yesterday. 'Guangzhou's economy has been growing at more than 10 per cent in the past 10 years while the rest of the country was growing at 7 to 8 per cent and the growth rate has been stable, so if the national rate is down by 1 per cent and Guangzhou's rate falls by 1 per cent, it is still high,' Guangzhou party secretary Lin Shusen said. 'I think this growth rate is normal and shows co-ordinated development,' Mr Lin said, adding that the central government had never cast doubt on Guangzhou's growth figures. The city's gross domestic product is forecast to rise by 15.2 per cent this year. Mr Lin explained that because Guangzhou accounted for a fortieth of national GDP and a twentieth of its fiscal revenue, 'if our figure has a high water content [is spurious] you have to squeeze water from the rest of the figures before you get to Guangzhou'. Vice-mayor Lin Yuanhe said the city's high GDP growth rate was mainly the result of economic restructuring in recent years. 'At the end of the 1990s, when everybody was emphasising hi-tech industry, Guangzhou decided it had to have co-ordinated development of traditional, hi-tech and service industries,' he said. As a result, Guangzhou upgraded traditional industries and pushed ahead with industrialisation, focusing on making pillar industries out of car, petrochemical, and electronic manufacturing. The three core industries had seen annual growth rates ranging between 30 per cent and 40 per cent in recent years, Mr Lin said. By 2002, Guangzhou had recorded six consecutive years of growth at around the 13 per cent mark. Last year the restructuring effect kicked in and it shot up to 15 per cent. 'I think this rate of growth will last for a long time,' Mr Lin said, pointing out the three pillar industries were now worth several billion yuan but had the potential to grow 10 times bigger. He said that for Guangzhou, the issue was not of oversupply, but upgrading products to find niches in a multi-layered market so that there would be no surplus production. Mr Lin said the central government had not asked Guangzhou to slow down, but had asked it to shut factories producing obsolete or oversupplied products and those that wasted energy. Asked about a labour shortage, the party secretary said the problem did not apply to Guangzhou because its economic restructuring had weaned it off a dependency on labour-intensive industries to drive growth. Moreover, Guangzhou was undergoing urbanisation and had to train and find jobs for farmers who had lost their land. At the Guangzhou Economic and Technological Development District, whose output accounts for 20 per cent of the city's GDP, vice-chairman Jiang Ningli said power shortages were not a problem because it received priority in electricity delivery. 'There were some shortages earlier on, but we ensured that those industries that need continuous supply were not affected,' he said. The municipal government had set growth targets of 13 per cent for both last year and this year.