The economy development of Guangxi Province in 2004 successfully reached the target of “Three Breakthroughs”

Sources: The National Statistics Bureau People’s Republic of China

The year of 2004 witnessed an outstanding achievement on the provincial economy growth. Under the leading of the Communist Party, different nationality groups of people make their best for the development for their areas. The Dengxiaoping Theory, the “Three Representatives”, the strategies originated from the Sixteenth Conference of the Communist Party and the scientific development theory all have the very important direction roles for the development of the provincial economy. The macroeconomic adjustment and controlling and the autonomous policies entitled to this minority region also greatly helped overcome the difficulties such as Bird Flu crisis, the rare drought in 50 years and the urgent situation in coal, electricity and oil transportation issues. The GDP growth set a new record for the latest 10 years with the accomplishment of the target of “Three Breakthroughs”. The total GDP and total government revenue not only successfully reached the target set for the Tenth Five-Year Plan, but also had the breakthrough of the best in the latest 10 years

1.   The main features of the economy situation in 2004:

The total GDP of Guangxi Province reached the milestone of 300 billion RMB in the year of 2004 with the far-reaching improvement on the comprehensive economy strength. According to preliminary calculation, the total GDP of 2004 was 332 billion RMB with a growth by 11.8% compared to the same period last year, which allowed the province to reach its Tenth Five-Year Target with one-year less in time. This set the new record of economy growth since the year 1995. The per capita GDP was 7,196 yuan (equals to the level of over $800 US dollars) with a growth by 11.0%. This is the first time the per capita GDP got over the level of 1,000 yuan, which was the highest record since 1995.

     1)  With the strong growth on industries, the provincial supply capacity was further improved.

•      The agriculture had rapid growth, which solidified its role as the foundation of economy growth. The rapid development on agriculture became the driving force for the development of forestry, stockbreeding and fishing industries. According to statistics, the total GDP created by agriculture was 129.17 billion RMB with a growth by 6.0%. The growth rate is also 1.7% faster than the same period the year before. Among the GDP, the traditional agriculture contributed 61.95 billion RMB with a growth by 6.1%. The contribution from the forestry was 5.69 billion RMB with a growth by 1.8%. The GDP by the stockbreeding was 45.8 billion with a growth by 8.9%. The GDP from the fishing industry was 13.86 billion RMB with a growth by 3.8%. The contribution rate of the traditional agriculture and the stockbreeding were 49.8% and 40.7% respectively. In general, the main features of the agriculture in that period were as follows. Firstly, the areas of arable lands continued to increase with the upbeat growth of the food production, though the total food production was slightly smaller than the year before. The total arable land areas for food production were 3,312,900 hectares with a growth by 0.4%. The total food production reached 14.765 million tons with a slight decrease by 0.6. The production of spring rice was 5.814 million tons with the decrease by 2.2%, while the production of autumn rice was 5.083 million tons with the drop by 1.9%. The production of sweet corns was 1.928 million tons with a steady growth by 7.8%. The growth on economic crops was also upbeat. The field areas growing sugarcanes were 716,000 hectares with a growth by 1.1%. The total production was 50.062 million tons, which equaled the production the year before. The field areas for vegetable production were 1.013 million hectares with a growth by 0.6%. The total production of vegetables reached 19.11 million tons with a growth by 2.5%. The fruit production grew rapidly with the total production of 5.166 million tons and a growth by 11.8%, among which the production of Lichee was 360,000 tons and the production of Longan was 310,000 tons. Secondly, the growth on stockbreeding was also recognizable. The number of pigs for sale was 35.742 million with a growth by 7.5%. The number of cows for sale was 1.635 million with a growth by 8.6%, while the number of goals for sale was 2.177 million with a growth by 8.4%. The number of domestic animals for sale was 570 million with a growth by 9.2%. The total production of meat was 3.797 million with a growth by 7.4%. The total production on milk was 47,000 tons with a growth by 22.3%. The total production of pod was 105,000 tons with a growth by 20.0%. Thirdly, the fishery production witnessed a steady development. The total production of water products was 2.723 million tons with a growth by 2.9%, among which the seafood production was 1.699 million tons with a growth by 0.7% and the fresh water products reached 1.024 million tons with a growth by 6.8%. Fourthly, the agricultural structure was further optimized. The total rate of GDP contribution from the stockbreeding, fruit products and fishery was improved significantly at 46.2% with a growth by 1.7%. The production areas for good quality rice were also increased by 4.3% compared to the same period the year before. Meanwhile, the areas for sugarcanes in high production were also promoted by 12%. With the better layout structure for different economic crops, the production areas of sugarcanes were able to be assembled in some appropriate areas building up the production circles. The similar distribution was also somehow applied to the areas producing pods and other economic plants. The distribution pattern of fruits, teas and Chinese medication plants also appeared to be more and more regionalized.

• With its rapid growth, the secondary industry further solidified its leading role in the economy development. Driven by the pillar industries and industries with the cutting edges, the provincial industrial development reached a new level. According to statistics, the total added value of 2004 reached 104.48 billion RMB with a growth by 17.0%, which set a new record since the year 1995. The Business Climate Index was 110.38, which was the best record since 1998. The contribution rate of the secondary industries to the economy was as high as 45% with a growth by 1.6%, which indicated the strong strength of the driving force of the secondary industries to the economy development. The major features of the secondary industries development were as follows. Firstly, the pillar industries and some major industries became the driving force of the economy development. In the industries above the designated size, the added value of the car manufacturing industry reached 6.1 billion RMB with a growth by 25.6%. The added value of the non-ferrous metal refinery and foundry was 5.001 billion RMB with a growth by 28.3%. The added value of ferrous metal refinery and foundry was 6.326 billion RMB with a growth by 68.7%. The added value of the production of electricity and heating powers was 7.836 billions with a growth by 11.1%. The added value of tobacco products was 3.063 billion RMB with a growth by 32.0%. The added value of chemical materials and chemical manufacturing products was 3.793 billion RMB with a growth by 22.6%. The added value of agricultural and food production was 7.278 billion RMB with a growth by 11.7%, among which the added value of sugarcane manufacturing products was 4.788 billion RMB with a growth by 9.3%. The contribution of the industries listed above achieved a high 67.4% of the contribution to the added value accomplished by all the enterprises above the designated size. Secondly, the growth pace of the secondary industries was speeding up. The total added value achieved by heavy industries reached 39.445 billion RMB with a growth by 27.4%. The total added value accomplished by light industries was 20.117 billion RMB with a growth by 14.5%. The contribution rate of the heavy industry to the development of the light industries was as high as 77%. The industry structure between heavy and light industries also changed tremendously into the structure of the heavy industries as the leading force for the development of the secondary industry. Thirdly, the production on major resources, basic materials and population consumption goods also accomplished new records, especially in the field of electricity production, steel, alumina, car manufacturing, cement and sugar manufacturing. The production of electricity reached 37.348 billion kilowatt-hours with a growth by 2.7%, among which the coal-based electricity production was 20.112 billion kilowatt-hours with a growth by 17.8%. The steel production was 3.7494 million tons with the growth by 64.7%. The production of alumina was 917,100 tons with a growth by 33.1%. The number of cars produced was 284,700 with a growth by 36.2%. The total cement production reached 28.121 million tons with a growth by 5.5%. The production of machinery sugaring was 6.0687 tons with a growth of 0.9%. Fourthly, all kinds of enterprises developed with a fast pace neck by neck with each other. The total added value created by the state-owned enterprises reached 20.452 billion RMB with a growth by 24.5%. The added value from collective enterprises was 2.101 billion RMB with a growth by 10.1%. The added value of the cooperative stock enterprises was 1.001billion RMB with a growth by 20.3%. The total added value of joint-stock enterprises was 23.499 billion RMB with a growth by 24.1%. The added value from joint enterprises with the investment from foreign economic factors, Hong Kong and Macau companies was 10.714 billion RMB with a growth by 20.3%. The total added value by all the other types of enterprises was 1.796 billion RMB with a growth by 20.3%. Fifthly, the growth of state-owned large and median enterprises was very rapid. The added value produced by state-owned or state-stock-sharing enterprises was 35.053 billion RMB with a growth by 20.6%. The added value by large and median enterprises reached 40.854 billion RMB with a growth by 22.2%. Last but not least, the value created from the exports of industrial products continued to rocket. The total annual value from exports of industrial products reached as high as 11.78 billion RMB with a growth by 36.2%, which is 25% faster in growth rate compared to the same period the year before.

• The development of the tertiary industries is also upbeat with the recognizable growth especially in the service industries. The transportation industry, the post and telecommunication industry, the real estate industry and the tourism industry had become the major driving force for the development of the tertiary industries in this province. According to statistics, in 2004 the tertiary industry experienced a growth by 0.7%. The comprehensive capacity of transportation industry was raised significantly. The total cargo transportation reached 368 million tons with a growth by 11.8%. The total amount of cargo transited was 108.772 billion tons with a growth by 16.1%, among which the transport growth based on roads and railways were 17.3% and 8.2% respectively. The annual total volume of passenger traffic reached 490 million person-times with a growth by 12.6%. The total passengers transited were 54.742 billion person-times with a growth by 14.3%, among which the growth on roads and railways were 9.6% and 15.7% respectively. The total service provided by post and telecommunication industry kept increasing. The total annual service value of this industry reached 26.7 billion RMB (2000 price) with a growth by 55.0%. At the end of the year 2004, the number of land-line telephone users reached 8.12 million with 1.73 million new users and a growth by 27.1%. The total number of mobile phone users reached 8.882 million with 2.322 million new users and a growth by 35.7%. The added value created by transportation, logistics, the post and telecommunication services was 28.644 billion RMB with a growth by 16.8%, which was 4.3% faster in growth rate compared to the same period the year before. The real estate industry was also prosperous. The total annual sales areas for commercial buildings reached 8.2036 million square meters with a growth by 32.0%. The total added value created by this industry reached 9.569 billion RMB with a growth by 11.7%. Other service-based industries developed properly during the same period. The tourism industry was one of the representatives. The total annual domestic tourists reached 55.175 million person-times with a growth by 21.5%, which was the new record. The number of international tourists reached 1.125 million person-times with a rocketing growth by 74.4% with big number of tourists from Thailand, Malaysia, Singapore, Indonesia, Vietnam and other southeastern countries. The total income created by international tourists reached $238 million US dollars with a growth by 79.7%. The development of exhibition industry was also distinct with the development together with the information consulting industry, high-tech service industry and community service industry. The total added value created by all the other service industries reached 39.541 billion RMB with a growth by 11.9%.

     2)  The driving force by the strong needs was reinforced.

The social investment on fixed assets continued to be very high with the growing need for the investment. The resident consumption grew rapidly under the effect of the fast-growing needs of consumption. The external need also increased. The structure of consumption and supply was further optimized, which gradually became the driving force for economy growth.

• The investment on fixed assets continued to be very strength with the investment structure being further optimized. The investment on fixed assets was also promoted by the investment from the major projects and non-state-owned enterprises. According to statistics, in 2004 the total social investment on fixed assets reached 125.486 billion RMB with a growth by 27.1% of 26.755 billion RMB compared to 2003. The total investment and growth rate both renewed the records since the year 1995. The contribution rate of the investment to the economic growth continued to trump 50% becoming the driving force for the provincial economic development. The annual total investment on urban fixed assets reached 111.297 billion RMB with a growth by 31.3%, among which the investment on infrastructure reached 63.599 billion RMB with a growth by 36.2%. The investment on urban regeneration was around 19.904 billion RMB with a growth by 35.5%. The investment on industry technology innovation was 14.5 billion RMB with a growth by 28.2%. The investment on real estate industry reached 19.235 billion RMB with a growth by 37.1%. The major features of the investment on fixed assets were as follows. Firstly, the investment from non-state-owned enterprises grew rapidly with stronger vigor. The investment by state-owned enterprises reached 54.567 billion RMB with a growth by 17.8%, while the investment by non-state-owned enterprises reached 70.919 billion RMB with a growth by 35.3%, which took up 56.5% in the total investment on social investment on fixed assets of the whole province with a growth rate 3.4% faster than the year before. Secondly, the investment on three industries took off with the biggest growth in the secondary industry. In the investment on the urban fixed assets, the investment on the primary industry reached 2.138 billion RMB with a growth by 23.8%, the investment on the secondary industry was 38.885 billion RMB with a growth by 35.9%, among which the investment on heavy industries was 38.597 billion RMB with a rapid growth by 35.9%. The investment on the tertiary industry reached 70.274 billion RMB with a growth by 29.0%. Thirdly, the rapid growth on the investment on major projects became the driving force for the provincial economic development. The number of projects with the investment over 100 million RMB was 731. The accomplished investment reached 58.482 billion RMB with a growth by 48.6%, which promoted the investment on urban investment on fixed assets by 16.4%. Among the 239self-financing projects, 216 projects were under construction in the same year. 37 major projects on infrastructure in coastal areas were also under construction. The investment on railway construction was under good progress as well. Longtan Hydropower Station Project and Baise Hydro Complex Project were under construction on schedule. Highways connecting Shuiren to Nanning and Huangsha River to Quanzhou were accomplished on time. The extension projects on Tiandong Power Plant, the Heshan Power Plant, the cement production assembling Hailuo Guilin and Yufeng Pingnan and the diesel engine project with the annual production capacity of 300,000 engines were all under construction. Part of the projects and investment on the Pingban Hydro Power Plant, Letan Hydro Power Plant and Beihai Power Plant were able to be successfully allocated. Fourthly, the investment on basic industries witnessed upbeat growth, though the investment on major projects under the macroeconomic adjustment and controlling dropped accordingly. The accomplished urban investment on infrastructure reached 53.393 billion RMB with a growth by 33.2%, among which the investment on industries responsible for electricity production, gas and water supply reached 16.32 billion RMB with a growth by 36.5%. The investment on transportation and related industries reached 15.251 billion RMB with a growth by 40.3%. The investment on hydro power, environment and infrastructure management reached 14.258 billion RMB with a growth by 40.2%. The investment accomplished on education was 2.583 billion RMB with a growth by 12.5%. Compared to the first half of the year, the investment on real estate industry was decreased by 2.0%. The investment on steel industry had a slump by 87.5%. The investment on cement production and aluminum production also had some decrease by 30% and 2.6% respectively. Last but not least, the investment on also was strong on the new production force areas. The newly developed urban road reached 306 kilometers within the year, the new high way length reached 145 kilometers, the newly-opened second level roads reached 460 kilometers. The number of berth on the level of 10 thousand tons was increased by 3. The installed generating capacity reached 1.68 million kilo-watt hours. The steel production capacity reached 1 million tons, while the cement production capacity reached 3.16 tons annually. The water supply capacity for urban areas reached 420,000 tons daily.

• The social consumption continued to be prosperous with the dropping down of high prices. Under the influence of the fast growth of economy and the disposable income for urban residents, the successful opening of the First China-ASEAN Exhibition Fairs, the consumption growth of this province was strong. According to statistics, the total social retail sales reached 97.341 billion RMB with a growth by 13.5%, which was the highest growing rate since 1997. The major features of the consumption market were as follows. Firstly, the growth on urban consumption was rapid. The total urban retail sales income annually reached 53.105 billion RMB with a growth by 15.8%. County level retail sales income reached 44.236 billion RMB with a growth by 18.9% with a growth by 9.7% compared to the same period the year before. The sales income of both retails and whole sales reached 81.138 billion RMB with a growth by 13.2%. What’s more, the leading role of enterprises above designated size was distinct. The sales income from the retails, wholesales and restaurant business above designated size reached 20.914 billion RMB with a growth by 20.3%, which took up 21.5% of the total sales income from social retails and wholesales with a growth by 1.2% when compared to the year before. There are six hottest consumption sectors. The sales of designated number retails and wholesale on construction and architecture materials achieved a growth of 250%, while the growth on furniture sales reached 190%. The sales on home appliances and music instruments reached a growth by 20.7%. The sales on body building and entertainment reached the growth by 36.3%, while the growth on car sales was 31.2%. The sales on telecommunications reached a rocketing growth by 50.7%. Influenced by the price rising on food and the international oil, the pricing level was raised accordingly. According to preliminary calculation, the consumption pricing level was raised by 4.4% in 2004, which was the highest rise since 1997, during which time, the urban areas witnessed a rise by 4.1% while the rural areas by 4.9%. The pricing levels of different products varied. The price on rise included the food products in general reached a rise level by 12.2%, among which the prices of rice, eggs and pork reached 25.5%, 20.1% and 18.5% respectively. The price of cigarette and alcohols had a slight growth by 0.2%. The price rise on medical insurance and service was by 1.1%, while the price on living cost reached 5.2%. The price drops appeared in the garment sales with a drop by 2.0%, the home appliances and service by 0.6%, the transportation and telecommunication by 2.3%, the entertainment, cultural stationary and related services by 1.4%. The price rise in food caused the living cost rise up by 4.1%, which indicated the food price as the major factors for the rise of living cost. The price level for accomplished industrial products also was raised by 9.7%, which was the new record since 1996, among which the price for light industrial products reached a growth by 10.0%, while the price of heavy industrial products reached a growth by 9.5%. The buy-in price for materials, fuels and powers experienced a raise by 15.7%, which set a new high since 1995. In the second half of the year, the pricing level was cooled down a little.

• The imports and exports achieved greatly opening up a new stage for the provincial international trading. Promoted by the rapid regional economic growth and the growing need in the international market, the record of the province on imports and exports both reached a new level. According to statistics, the accomplished value created by imports and exports reached $4.288 billion US dollars with a growth by 34.3% and a growth on speed by 2.9% compared to the year before, among which the value created by imports was $1.893 billion US dollars with a growth by 54.8%, the total value from exports was $2.396 billion US dollars with a growth by 21.6%. The export market was further extended with the number of foreign trading partners of over 160 countries. The trading with major countries continued to grow well, among which the export to the US grew by 28.5%, the export to Japan grew by 40.7%, while the export to the ASEAN grew by 15.1%, the export to Korea reached a big growth by 54.1%, the export to Russia grew by 15.6%, the export to Latin America reached a growth by 37.3%. The export to Africa also grew by 36.7%. The export to European Union grew by 9.6%, the export to Hong Kong and Macau grew by 3.5% and 21.2% respectively. The structure of export was further optimized. The primary products took up only 15.8% of the total products exported with a slight drop by 1.9% compared to the year before. The total value by final industrial products reached $ 2.016 billion US dollars, which took up as high as 84.2% of the total value created by exports with a growth by 1.9%. The export competitive edge of machinery products and high-tech products was also promoted in the same period. The total value created by export of machinery products reached $452 million US dollars with a growth by 15.0%. The value created by high-tech products exported reached $49 million US dollars with a growth of 51.6% and the growth in rate by 0.4%. The successful opening of the First China-ASEAN Exhibition Fair further promoted the role of Guangxi Province in the regional economic development. The cooperation between Guangdong and Guangxi Provinces is one of the most important steps in the development progress of the Pan-PRD projects. As the increase in number of the major projects, the total investment also rocketed. A lot of joint enterprises entered Guangxi which further drove the provincial economy to grow. The total FDI in 2004 reached 25 billion RMB.

2. The analysis on economy quality and benefit

The rapid provincial economic growth was largely due to the great economy quality and better supply and consumption structure, which reached the best level in history.

    1)   The total profit created by enterprises above designated size reached over 10 billion RMB.

Driven by the rapid growth in sugaring, ferrous metal refinery and foundry, non-ferrous metal refinery and foundry, chemical materials and products and car manufacturing industries, the total industrial profits renewed the record in history. According to statistics, the comprehensive profit index of enterprises above designated size reached 150.97 with 25.7 points higher than the year before. The total sales income from enterprises above designated size reached 183.493 billion RMB with a growth by 29.3%. The total income tax and related payment reached 25.167 billion RMB with a growth by 45.3%, among which tax money reached 12.983 billion RMB with a growth by 21.5%. The total profit deducted the losing part reached over 12.184 billion RMB with a rocketing growth by 83.6%. The losing rate was limited to 33.5% with a drop by 6.3% compared to the year before, which was the lowest level since 1998. The losing value was 1.642 billion RMB with a drop by 28.4%. The largest contribution of the enterprises above designated size came from the following five industries: the sugaring industry achieved the profit of 1.447 billion RMB with a growth by 120%. The total profit from non-ferrous metal refinery and foundry reached 944 million RMB with a growth by 60%. The profit from ferrous refinery and foundry was 1.097 billion RMB with a growth by 20%. The total profit from chemical materials and product industry was 437 million RMB with a tremendous increase of 810%. The profit from the car manufacturing industry reached 200 million RMB with a growth by 15.7%. The total contribution from the five industries listed above to the total industrial profits reached as high as 74.4%.

    2)The total government revenue reached 40 billion RMB.

In 2004 the total government revenue reached 40.368 billion RMB with a growth by 18.2%, which also allowed the province to achieve its revenue target set by the Tenth Five-Year Plan with one year less in time. The revenue on budget reached 23.773 billion RMB with a growth by 16.7%. The expenditure on budget was 50.48 billion RMB with a growth of 13.8%.

    3)The income for urban residents increased largely.

The economic growth brought with the rise of the disposable income for urban residents. According to statistics, the per capita average income for urban residents reached 6,737.3 yuan with a growth by 9.6%. The per capita average transited income reached 2,070.2 yuan with a growth by 31.7%. The disposable income per capita for urban residents reached 8,690 yuan with a growth of 905 yuan by 11.6%. The average net income for farmers also achieved rapid growth of 2,305 yuan with 210 yuan higher than the year before and a growth by 10.1%, which reached the fastest growing speed in history since 1997. The prosperous situation in economic growth also helped the situation in the employment market. In 2004 the total urban employees reached the number of 2.73 million with a growth of 20,000 persons. The employee number in rural areas reached 225,200 persons with a growth of 50,200 persons and a growth by 28.7%. The registered unemployment rate in urban areas was 4.1% which was well controlled within the target scale of no more than 4.7%.

3.   The major problems existing in economy growth

Under the leadership of the Communist Party and different levels of municipality governments, through the great efforts from all groups of nationalities in this province, the provincial economy witnessed successful growth in 2004. However, a lot of major problems also emerged on which a lot of be attention should be paid. Firstly, the serious drought caused a lot of damage in agricultural production. Meanwhile, this drought which was rarely seen even within every 50 years also had very negative impacts on the production of hydro powers. Secondly, the problem of coal, electricity and oil transportation was still urgent and serious. The conflicts in the supply of these fields had emerged, especially in the field of coal-based power production. Most coal-based power plants were under the red alarming line of insufficient resources supply. The annual electricity gap was 3 billion kilo-watt hours. The transportation capacity of railways also faced serious problems. Thirdly, the problem of FDI also needed attention. The efficiency of the using of FDI was still very low. In history, the FDI used to be very low in number and low in efficiency. Such problems still existed in current time. The total according to statistics reached $296 million US dollars with a distinct drop by 35.2%. Last but not least is the problem of prices. Under the influence of the food prices and international oil price, the pricing in this province also had the problem of irrational price growth, which directly caused larger expenditures on living cost and a lot of negative impacts on the daily life especially on the low-income families.