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Guangdong: Market Profile

Major Economic Indicators

Economic Indicators2016Jan-Sep 2017
ValueGrowth
(%, y-o-y)
ValueGrowth
(%, y-o-y)
Gross Domestic Product (RMB bn)7,951.27.516,481.57.61
Per Capita GDP (RMB)72,7876.21
Added Value Output
   Primary industry (RMB bn)369.43.11264.33.41
   Secondary industry (RMB bn)3,400.16.212,762.16.61
   Tertiary industry (RMB bn)4,181.69.213,455.1
8.81
Value-added Industrial Output2 (RMB bn)3,133.06.712,513.67.21
Fixed-assets Investment (RMB bn)3,300.910.0
2,560.014.6
Retail Sales (RMB bn)3,473.910.22,804.010.3
Inflation (Consumer Price Index, %)2.31.4
Exports (US$ bn)598.9-6.9447.64.6
   By foreign-invested enterprises (US$ bn)288.9-13.3206.1-1.1
Imports (US$ bn)356.6-6.0272.48.8
   By foreign-invested enterprises (US$ bn)181.2-13.6132.33.4
Utilised Foreign Direct Investment (US$ bn)23.4-13.118.53.0

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

Sources: Guangdong Statistical Yearbook 2017, Guangdong Statistical Bureau, China Customs Statistics, 12.2016, 9.2017.

 

General Background

Guangdong has a total area of 179,757 sq km. Total population stood at 110 million at the end of 2016. The Pearl River Delta (PRD) Economic Zone is the province’s economic hub, its GDP accounting for 79.3% of Guangdong’s GDP in 2016. The PRD Economic Zone covers 9 cities – Guangzhou, Shenzhen, Zhuhai, Foshan, Jiangmen, Dongguan, Zhongshan, Huizhou city and Zhaoqing city.

In July 2017, the HKSAR Government, Macao Special Administrative Region, National Development and Reform Commission and the People’s Government of Guangdong Province signed the “Framework Agreement on Deepening Guangdong-Hong Kong-Macao Cooperation in the Development of the Bay Area”. The Framework Agreement also sets out the goals and principles of cooperation.

Guangdong will become the technology and innovation center for the Bay Area and develop its advanced manufacturing and modern services industries. The framework agreement also strives to cement Hong Kong's hub status in various aspects, including consolidating and enhancing Hong Kong's status as an international financial, transport and trade center; strengthening its status as a global offshore Renminbi business hub and an international asset management center; promoting the development of Hong Kong's professional services and innovation and technology industries; and establishing a center for international legal and dispute resolution services in the Asia-Pacific region. Macao is dedicated to become a world-class leisure-tourism city, as well as a commercial and trade co-operation service platform between China and Portuguese speaking countries. With traditional Chinese culture at its heart, Macao can also serve as a cultural exchange platform.

Guangdong’s economy led the country in many aspects in 2016:

  • The largest GDP among all provinces and municipalities, accounting for 10.7% 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 2016, there were 3.17 million private enterprises in Guangdong, an increase of 27.8% from 2015.

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
2016
Primary 33.2
 5.8
4.6
Secondary 41.1 50.642.8
   Industry 36.0 47.139.7
Tertiary 25.7 43.652.6

Source: Statistical Yearbook of Guangdong, 2017

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 62.0% in 2016.

Share of Major Industry Groups (2016)

 % share of value-added industrial output
 Communication equipment, computers and other electronic equipment23.0
 Electrical machinery & equipment9.6
 Automobiles5.1
 Raw chemical materials and chemical products4.6
 Metal products4.5
 Nonmetal mineral products4.1
 Plastics products4.0
 Garments and footwear3.2
 General purpose machinery2.8
 Petroleum refining, coking nuclear fuel processing1.1

Source: Guangdong Statistical Yearbook 2017

As for the service sectors which accounted for 52.6% of GDP in 2016, 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 center, modern logistics hub in southern China, as well as an international business travel and shopping center.

Tourism

In 2016, Guangdong received 362 million (+10.4%) overnight domestic tourists and 35.2 million (+2.1%) overnight overseas tourists with tourism receipts at RMB920.0 billion (+15.3%) and RMB123.4 billion (+11.7%) 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 2016, Hong Kong was still the largest export market, accounting for 30% of the total. Other major export markets included the US, Japan, South Korea, UK, Germany 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 2016, ASEAN was the largest source of import accounting for 16.1% of the total, followed by Taiwan, South Korea and Japan.

Foreign Investment

Up to end-2016, Guangdong accounted for about 19% of China’s total utilised FDI. Foreign investments in Guangdong are mainly engaged in manufacturing industries (24.7% of the utilised FDI in 2016). For tertiary industry, leasing and business services accounted for 17.3% of the total utilised FDI in 2016, followed by real estate (15.5% 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 1979-2016, the utilised capital from Hong Kong amounted to US$255.9 billion, accounting for 63.8% 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 2016, other major investors in Guangdong were from Virgin Islands, UK, Japan, Singapore and US. 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 2016, annual per capita disposal income of urban households reached RMB37,684 (+8.4%). 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 (%)

 20002016
 Food, tobacco & liquor38.632.9
 Clothing4.65.5
 Health care & medical services11.54.6
 Transportation & communications4.314.7
 Household articles and services7.56.0
 Recreational, educational and cultural services13.410.9
 Residence13.722.4

Source: Guangdong Statistical Yearbook, 2017

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 (2016)

CitiesGDP
(RMB bn)
Per Capita GDP (RMB)Value-added
industry output*
(RMB bn)
Retail Sales
(RMB bn)
Exports
(US$ bn)
Guangzhou (廣州) 1,954.7
141,933
 438.8870.678.2
Shenzhen (深圳) 1,949.3167,411
 710.9551.3
237.3
Zhuhai (珠海) 222.6
134,548
 102.3101.6
27.3
Foshan (佛山) 863.0
115,891
 467.1301.8
47.0
Huizhou (惠州) 341.2
71,605
 176.4122.8
29.9
Dongguan (東莞) 682.8
82,682
 296.8247.1
99.0
Zhongshan (中山) 320.3
99,471
 132.0120.6
26.7
Jiangmen (江門) 241.9
53,374
 106.6115.9
15.0
Zhaoqing (肇慶) 208.4
51,178
 92.173.2
4.7

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

Source: Guangdong Statistical Yearbook 2017

 

 

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