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SCMP Reporter

Guangdong's economy continued to expand in the first three quarters of the year, but at a slower rate than for the same period last year.

The Guangdong Bureau of Statistics released preliminary estimates  yesterday suggesting the province's gross domestic product  in the first three quarters totalled  1.4 trillion yuan, up 12.3 per cent year on year. But the rate of growth was 2.5 percentage points down for the same period last year.

Lin Jiang ,  from  Lingnan College's public finance and taxation department at Sun Yat-Sen University  in Guangzhou, said the main factors dragging down the economy were a reduction in fixed-asset investment growth and a failure to stimulate domestic demand.

From January to September, Guangdong's total investment in fixed assets was 445.86 billion yuan, an  increase of 16.7 per cent over a year earlier, but the growth rate in the sector was down 8.3 percentage points.

Professor Lin said that in the past few years, Guangdong had registered  30 per cent growth in fixed-asset investment.

'At present, banks are still the main financing channels for investors,' Professor Lin said. 'Fixed-asset investment is bound to decline as the banks restrict their loans under the central government's macroeconomic control measures.'

He also said the energy shortage in Guangdong had made many investors hesitate or withdraw their investment plans.

The   statistics bureau said retail sales  stood at 534.57 billion yuan in the first nine months, up 14.7 per cent year on year. But the growth rate was only 2.1 percentage points higher than for  the same time last year. The bureau described the retail sales situation as 'stable with a brisk trend'.

Professor Lin said 'stable' was only a roundabout way to express the ineffectiveness of stimulating and expanding domestic demand.

He said Guangdong's economic development still mainly relied on exporting processed products, which would fade out as profit margins declined.

'The right way to set up a sustainable drive for Guangdong's economy is to expand domestic demand and establish local brands,' Professor Lin said, adding that Guangdong should rely on both domestic business and the export trade, rather than just on  exports.

The total value of trade between Hong Kong and Guangdong was about US$61 billion, up 18.7 per cent.

Crunching the numbers

Guangdong economic data for the first three quarters:

GDP: 1.39 trillion yuan, up 12.3 per cent year on year

Fixed-asset investment: 445.86 billion yuan, up 16.7 per cent

Retail sales: 534.57 billion yuan, up 14.7 per cent

External trade: US$300.83 billion, up 18.6 per cent

Export value: US$165.56 billion, up 24 per cent

Import value: US$135.27 billion, up 12.6 per cent.

Per capita income of rural residents: 4,000.41 yuan,  up 12.9 per cent



Guangdong reports slower growth rate