Guangdong GDP tipped to surge by up to 15.2pc
Economic output seen topping that of Taiwan within the next couple of years
Guangdong's economic output will exceed 2.5 trillion yuan this year, according to the latest official forecast, raising the possibility that annual gross domestic product growth will come in at 15.2 per cent, 2.7 percentage points higher than last year's figure.
Governor Huang Huahua said the growth rate from January to October was 14.1 per cent and he predicted the province's GDP would exceed 2.5 trillion yuan this year, with total imports and exports reaching US$500 billion - 30 per cent of the national total, the China Business News reported.
It also quoted Vice-Governor Zhong Yangsheng as saying that Guangdong's economy might top Taiwan's in 2008 then South Korea's in 2015. Taiwan's gross domestic product was about US$340 billion last year, or roughly 2.72 trillion yuan.
Experts said the growth was the result of strong fixed-asset investment, especially in rural eastern and western areas during the past few years.
'The government has continually invested in huge projects in the western, eastern and northern parts of the province, and those [projects] obviously supported the growth,' said Guangdong Academy of Social Sciences researcher Cheng Jiansan .
'In countryside cities such as Qingyuan and Heyuan the [GDP] growth rate is about 20 per cent to 30 per cent, which is much higher than the Pearl River Delta's and the provincial average,' the researcher said. 'But the final official GDP figure won't be announced before the third quarter of 2007, so it will be no surprise if there is a change of one percentage point.'
Experts said there were no signs of serious overheating, although industrial and real estate investments were a little hot. However, they expressed doubts about the sustainability of the growth.
'I personally predict that the growth will be high, in the double digits for at least three to four years. But after 2010 it might stabilise and not grow as fast as these years,' Mr Cheng said.
He said the growth mainly depended on government control and he doubted that the market had a strong influence on it.
'The [Guangdong] government's hand on the economy was strong while the market's activities were not so clear,' he said. 'So the key point is not how big the figures will be but what kind of growth we have now and whether it is sustainable or not.'
Experts have warned that environmental and energy restrictions as well as the shortage of labour might slow economic growth if Guangdong is unable to improve its industrial structure.
Wang Xi , a finance expert from Sun Yat-sen University, said the appreciation of the yuan might also be a threat. 'Exports contribute a lot to [Guangdong's] fast growth, but the strengthening of the yuan will be a great disadvantage,' Dr Wang said.
