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Guangdong: Market Profile

Major Economic Indicators

Economic Indicators2015Jan-Sep 2016
ValueGrowth
(%, y-o-y)
ValueGrowth
(%, y-o-y)
Gross Domestic Product (RMB bn)7,281.38.015,706.17.31
Per Capita GDP (RMB)67,5037.01
Added Value Output
   Primary industry (RMB bn)334.63.31258.93.11
   Secondary industry (RMB bn)3,261.47.012,449.76.21
   Tertiary industry (RMB bn)3,685.39.512,997.58.61
Value-added Industrial Output2 (RMB bn)2,944.67.212,267.76.71
Fixed-assets Investment (RMB bn)3,003.115.82,230.712.3
Retail Sales (RMB bn)3,151.710.72,546.510.1
Inflation (Consumer Price Index, %)1.52.3
Exports (US$ bn)643.5-0.4433.7-5.7
   By foreign-invested enterprises (US$ bn)333.0-6.5208.4-12.7
Imports (US$ bn)379.4-11.9251.1-7.1
   By foreign-invested enterprises (US$ bn)209.8-9.9127.9-14.3
Utilised Foreign Direct Investment (US$ bn)26.90.015.03-16.9

Notes:
1. In RMB real term
2. For all state-owned enterprises and other forms of enterprises with annual sales over RMB20 million
3. Jan-Aug 2016

Sources: Guangdong Statistical Yearbook 2016, Guangdong Statistical Bureau, China Customs Statistics, 12.2015, 9.2016.

 

General Background

Guangdong has a total area of 179,757 sq kilometres. Total population stood at 108.5 million at the end of 2015. The Pearl River Delta (PRD) Economic Zone is the province’s economic hub, its GDP accounting for 79.1% of Guangdong’s GDP in 2015. The PRD Economic Zone covers 9 cities – Guangzhou, Shenzhen, Zhuhai, Foshan, Jiangmen, Dongguan, Zhongshan, Huizhou city and Zhaoqing city.

In January 2009, China’s National Development and Reform Commission released the “Outline of the Plan for the Reform and Development of the PRD”. By giving the PRD greater autonomy in its reforms and economic restructuring program, it is expected by 2020, the PRD joined by Hong Kong and Macau, will become a globally competitive and the most vigorous metropolitan area in the Asia-Pacific region and a centre of advanced manufacturing and modern service industries.

Guangdong’s economy led the country in many aspects in 2015:

  • The largest GDP among all provinces and municipalities, accounting for 10.6% of the national total

  • The largest exports value among all provinces and municipalities, accounting for 28.3% of the national total

  • The largest retail sales value of consumer goods which accounted for about 10.5% of the national total

Guangdong has a strong private sector. Many indigenous enterprises have also developed a strong brand name in their specialised areas and become market leaders in China, such as Galanz, Midea, Gree etc. By the end of 2015, there were 2.48 million private enterprises in Guangdong, an increase of 27% from 2014.

Industries

Guangdong’s manufacturing industries developed rapidly as a result of foreign investment, particularly in the PRD. Guangdong is a major export-processing base for foreign investors mainly from Hong Kong and Taiwan. Cities that have the largest industrial production include Guangzhou, Shenzhen, Dongguan, Foshan, Huizhou, Jiangmen and Shantou.

Composition of GDP (%)

 1980
2006
2015
Primary 33.2
 5.8
 4.6
Secondary 41.1 50.6 44.8
   Industry 36.0 47.1 41.6
Tertiary 25.7 43.6 50.6

Source: Statistical Yearbook of Guangdong, 2016

Guangdong is strong at light manufacturing industry. Output of light industries used to account for over half of the province's total industrial output. Major products include electrical appliances such as television sets, electrical fans and refrigerators, and other consumer products like garments, toys, shoes and electronics. Exports of most of these products rank the highest in China. In recent years, Guangdong is moving towards heavy, new and high technology industries. The share of heavy industries in value-added industrial output increased from 52% in 2000 to 61.3% in 2015.

Share of Major Industry Groups (2015)

 % share of value-added industrial output
 Communication equipment, computers and other electronic equipment 22.1
 Electrical machinery & equipment 9.2
 Raw chemical materials and chemical products 5.1
 Automobiles 4.9
 Metal products 4.6
 Nonmetal mineral products 4.2
 Plastics products 3.9
 Garments and footwear 3.5
 Petroleum refining, coking nuclear fuel processing 2.8
 General purpose machinery 2.7

Source: Guangdong Statistical Yearbook 2016

As for the service sectors which accounted for 50.6% of GDP in 2015, Guangdong aims to further increase their overall relative share in GDP. While development of the service sectors will be expedited across the board, their structure will be optimised to develop Guangdong into a regional financial centre, modern logistics hub in southern China, as well as an international business travel and shopping centre.

Tourism

In 2015, Guangdong received 328 million (+11.5%) overnight domestic tourists and 34.5 million (+2.7%) overnight overseas tourists with tourism receipts at RMB797.7 billion (+17.3%) and RMB110.4 billion (+5.2%) respectively.

Foreign Trade

Guangdong as a leading industrial base as well as an export processing base for a wide range of products contributed markedly to the country’s export growth. Major export product types included electric and electronic products, computer and communication technology, machinery and equipment etc. In 2015, Hong Kong was still the largest export market, accounting for 32% of the total. Other major export markets included the US, Japan, Germany, Korea, UK and ASEAN.

Guangdong imports a large number of capital and intermediate goods. Leading import product types include electric and electronic products, electronic technology, computer and communication technology, etc. In 2015, ASEAN was the largest source of import accounting for 14.6% of the total, followed by Taiwan, South Korea and Japan.

Foreign Investment

Up to end-2015, Guangdong accounted for about 23% of China’s total utilised FDI. Foreign investments in Guangdong are mainly engaged in manufacturing industries (38.2% of the utilised FDI in 2015). For tertiary industry, real estate was one of the most attractive areas, absorbing 26.2% of the total utilised FDI in 2015, followed by leasing and business services (10.7% of the total FDI).

Chart: Utilised FDI of Guangdong
Chart: Utilised FDI of Guangdong

Hong Kong is the largest source of foreign direct investment in Guangdong. During the period of 1979-2015, the utilised capital from Hong Kong amounted to US$238.5 billion, accounting for 63.2% of Guangdong’s total.

Hong Kong's investment mainly involved in electronics, toys, garment, shoes, plastic, computer and accessories, commerce, food catering, material warehousing, distribution, real estates, and other infrastructural development. Major Hong Kong companies have participated extensively in Guangdong’s industrial and infrastructural investments.  In recent years, Hong Kong's investment in Guangdong has been diversified from manufacturing to the service sector. Hong Kong brand names are highly visible in Guangdong’s retail sector.

In 2015, other major investors in Guangdong were from Singapore, Japan, Virgin Islands, South Korea and Germany. Foreign investments have increasingly been channeled into infrastructure, agriculture, property and capital- and technological-intensive projects in recent years. Given China is further liberalising its services sector, an increasing share of FDI is going into the service sectors.

Consumer Market

Guangdong is the largest consumer market in China. In 2015, annual per capita disposal income of urban households reached RMB34,757 (+8.1%). With the rising income level and the economic structure adjustment, the consumer expenditure pattern is also undergoing structural change. While the share of food declined, the share of services such as transportation and communications, as well as residence has increased.

Composition of Per Capita Expenditure of Urban Household (%)

 20002015
 Food, tobacco & liquor38.633.2
 Clothing4.65.7
 Health care & medical services11.54.3
 Transportation & communications4.315.2
 Household articles and services7.55.9
 Recreational, educational and cultural services13.410.4
 Residence13.722.3

Source: Guangdong Statistical Yearbook, 2016

The retail distribution landscape in Guangdong is changing rapidly. Apart from traditional department stores, various forms of modern operation such as chain stores, supermarkets, ware-house type markets and convenience stores proliferate. The concept of “shopping mall” is developing rapidly in the PRD as integrated shopping and entertainment centres.

Guangdong's retail market is one of the most developed markets in China. Major overseas-invested retail enterprises that have presence in Guangdong include Walmart from the US, Carrefour from France, PARKnSHOP and Watsons from Hong Kong, Trust-Mart from Taiwan. Franchised chain stores from Hong Kong have also entered Guangdong.

Economic Indicators of PRD Cities (2015)

CitiesGDP
(RMB bn)
Per Capita GDP (RMB)Value-added
industry output*
(RMB bn)
Retail Sales
(RMB bn)
Exports
(US$ bn)
Guangzhou (廣州)  1,810.0
 136,188 453.5 798.8 81.2
Shenzhen (深圳)  1,750.3 157,985 642.6 501.8 264.0
Zhuhai (珠海)  202.5 124,706 91.7 91.5 28.8
Foshan (佛山)  800.4 108,299 436.4 270.5 48.2
Huizhou (惠州)  314.0 66,231 161.7 107.1 34.8
Dongguan (東莞)  627.5 75,616 261.2 218.5 103.6
Zhongshan (中山)  301.0 94,030 128.1 108.7 28.0
Jiangmen (江門)  224.0 49,608 96.6 103.4 15.4
Zhaoqing (肇慶)  197.0 48,670 96.1 64.8 4.8

* For all state-owned and other forms of enterprises with annual sales over RMB20 million

Source: Guangdong Statistical Yearbook 2016

 

 

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