Guangdong Province is situated in the southern most part of China's mainland and immediately adjacent to Hong Kong SAR and Macau SAR. It faces the South China Sea with a continental coastline of 3,368 km, and has numerous islands. Following China's opening up in 1979, Guangdong developed a market-oriented culture earlier than any other place in the country, and emerged as the nation's leading province with the highest records for economic indicators such as GDP, FDI, and foreign exports. For the past 20 years, Guangdong GDP growth rates averaged over 15% a year. The province currently accounts for 11.69% of China's GDP as well as 33% of all its exports and imports. Guangdong is home to 3 Special Economic Zones (Shantou, Shenzhen and Zhuhai), and to the Pearl River Delta economic zone, one of the Mainland's principal economic engines.
The economic activity of the province concentrates in the industrial sector which contributes to 55% of the GDP against 36% for the services and 7,8% for agriculture. Industry is dominated by electronics, the components electric, mechanical and petrochemical. Their share in the industrial production is higher than 50%. In particular, electronics became a key sector of the provincial economy. The products of high technology, mainly data processing, account for 35% of exports afterwards to have strongly increased these last years (+ 25% in 2005).
Guangdong is a world centre of production for a large variety of products: electronics, electric household appliances (50% of the world production of microwaves), and current consumer goods (30% of the production shoes). The production is organized in the form of clusters specialized by geographical area where customers, suppliers and subcontractors concentrate. The town of Dongguan, in the east of Canton, thus gathers the main part from the 5000 to 6000 producers of shoes of the Guangdong and the manufacturers of pieces of furniture. The electric household appliances are concentrated in the district of Foshan, on western bank of the delta, electronics with Shenzhen.
This industrial merger obliges with the realization of great projects of infrastructure centred on transport and logistics. The Guangdong, which shelters already the 4th world port with Shenzhen, built the new port out of deep water of Nansha near Canton. The airport of Canton, inaugurated in August 2004, account among largest in Asia even if its occupancy rate is in-on this side its capacities. The construction of new motorway connections and especially of the fast network shoed between the large cities of the delta, registered in the 11th five-year plan (2005-2010), will put Canton at less than one Zhuhai and Shenzhen time and will thus make this zone a true conurbation of 40 million inhabitants.
Manufacturing
Guangdong is one of the leading manufacture provinces in China. In recent years, Guangdong Provincial Committee and Provincial Government have unveiled in succession fresh policies on how to restructure industries, enhance industrial competitiveness, and make a plan for developing nine pillar industries, with a purpose to give more support to pillar industries, and rationalize the whole structure of industries.
Now, the nine pillar industries, including electronics and information, electric appliances and machinery, petrochemical, textiles& garments, food & beverage, construction material, paper making, pharmaceutical and automobile, are playing an increasingly predominant role in economic growth. The 3 growing industries, namely, electronics and information technology, electric appliances and machinery, and petrochemical witness a strong momentum of growth. The 3 traditional industries, namely, textiles and garments, foodstuff and beverages, and construction materials, maintain a stable development. The remaining 3 potential industries enter a stage of fast development and better structure. In 2005, the 9 pillar industries achieved a total increased value of RMB 620,307,000,000 yuan, up 20.3% over the previous year; the increased value of the above-scale industries was enhanced, taking up 73.7%.
1. Electronics and Information
With electronics and information industry having the largest scale in Mainland China; Guangdong has become one of the most important bases of IT products in China, even in the world. In 2005, electronics and information continues to take the leading place among all pillar industries, as an important force to fuel economic growth. More than 20 enterprises in the province have ranked among the top 100 electronic enterprises in China.
A series of electronics and information products with competitive abilities have come into being: as for the manufacturing of communication equipment, stored-program control exchanger and optical communication product are preponderant in terms of cost performance; in the field of manufacturing electronic parts, colour tube and discrete part chip are among the most competitive in the country; in manufacturing electronic components, PCB and SMT take a crucial position in China; in software industry, embedded software products account for over 50% of the Mainland China.
Concentrated on the Pearl River Delta Region, particularly on Shenzhen, Guangzhou, Dongguan, Huizhou, Foshan and Zhongshan, a famous "corridor of electronic and information industry" has taken shape.
2. Electric Appliance and Machinery
A cluster of electric appliance and machinery industry has already come into being. With a series of competitive products of favourable market share, it centres on Guangzhou, Shenzhen and Foshan, cities with relatively good grounding in equipment manufacturing, radiates to the Pearl River Delta, and drives forward the development of east and west wings of the province.
The benefit growth of Guangdong's machinery industry keeps climbing; market abroad further expands; the pace of new-product-development is quickened; the economic efficiency of a number of key enterprises witness noticeable increase; the export of products ranks the first in Mainland China; the total value of industrial output also comes out top in Mainland China.
Guangdong's household electric appliance industry proves to be important in the whole country, being a key export base in China, also in the world. Because of great varieties, well-developed supporting system, good quality of products, along with creativity in developing new products, for a long time, Guangdong has remained the leading position in the country in terms of production, export and competitiveness of household electric products. In the field of audio and visual equipment manufacturing, the competitiveness of colour TV, laser disc player and hi-fi system, all ranks the first in China.
When the household electric appliance industry develops into a mature stage, it successfully cultivates a number of key enterprises and famous brands with high reputation, for instance, Gree and Midea in air-condition manufacturing, Kelon in refrigerator, Galanz in microwave oven, and TCL and Konka in colour TV, are Guangdong's famous brand. A cluster of household electric appliance industry, along with export-products processing area, has formed in the Pearl River Delta Region.
3. Petrochemical Industry
The total petrochemical amount of Guangdong province is in the van of Mainland China. Main products, such as crude oil, three finished oil (gasoline & kerosene & diesel oil), ethylene, synthetic resin, architectural coating, rubber shoes, all rank the first three in the country. In 2005, this industry maintained a stable growth.
Petrochemical companies are mainly located in Maoming, Guangzhou, Huizhou and Zhanjiang. Maoming Petrochemical Corp., Guangzhou Petrochemical Corp. and Zhanjiang Dongxing Corp. are the backbones of Guangdong's oil refining industry. The first two companies are also famous for ethylene production. In 2005, after two petrochemical programs (one processing 12 million tons of oil refining annually, the other producing 0.8 million tons of ethylene annually) been constructed and put into use, Huizhou becomes the third oil refining centre of Guangdong Province.
This is a terrific chance for Guangdong to develop its refining oil on the upper reaches of the Pearl River, at the same time drive forward petrochemical industry on the lower reaches.
4. Textiles and Garments
Guangdong is an important producing and exporting base for China's textile industry; it is also the third largest exporting base of garments in the world. Guangdong's textile takes the leading place in China in following aspects: variety, quality, brand, total value of industrial output and amount of sales. In 2005, Guangdong's garment & textile industry developed fast with an export volume of USD$ 22.01 billion, increasing by 24.8%.
Developing in cluster is a main feature and a source of competitiveness of Guangdong's textile industry. The producing process is small-scaled but refined and specialized, each sector coordinates harmoniously. Sportswear in Zhongshan, garments and knitting goods in Dongguan, surface fabric, knitting goods, children's garment and underwear in Foshan, shirt in Puning, all enjoy high reputation both at home and broad.
Such clusters concentrate on over 40 cities and towns in the Pearl River Delta region, including Guangzhou, Shenzhen, Foshan, Zhongshan, Dongguan, Shantou, Jiangmen, etc.
5. Food & Beverage
Guangdong is a big producing and exporting province among China's food and beverage industry. It pays much attention to technical improvement, and also to the introduction, digestion and absorption of foreign advanced techniques, thus guarantees good quality and high level for its foodstuff industry. Some products, for example, beverage, baked & roasted food, health product and condiment, are always in the lead in China, possess obvious advantage, and have a number of famous brands.
Guangdong has implemented the strategy of famous brand in the industry of food & beverage. The industry has begun to benefit from its large production scale, and has realized the in-phase growth of both the output value and the profit. Both the Zhujiang Beer and the Kingway Beer are honoured the "Chinese Famous Brand". By means of integration and adjustment, the industry has formed production of scale in beverage, beer and juice, becoming one of the pillar industries in Guangdong, which is worthy of the name.
6. Construction Materials
Guangdong is a province with strong construction material industry. The economic aggregate of this industry top the highest level in the country. In 2005, the increase rate of the industry of construction materials reached 33.9%. The great varieties of products and strong supporting system make it a pillar industry in Guangdong.
A number of product concentration areas, which have their own features and are influential at home and abroad, have come into being. These products include ceramics of Foshan, architectural coating of Shunde, aluminium profile of Dali, sanitary ware of Chaozhou, stone of Yunfu, and water heating equipment & sanitary ware of Kaiping.
Construction material in Guangdong is rich in variety and quick in new product development. Especially its decorative material tops the other provinces, very beneficial to enhance the competitiveness of the industry.
The industry in Guangdong enjoys a high level of privatization and market maturity. With further development of export-oriented economy and more vigorous export trade, the export value of construction material accounts for 30% of the total amount of Mainland China, tops all the other regions in China. In recent years, the export value of construction ceramics (knock-out product in the province) has kept an annual increase of 70%. Among Chinese famous-brand ceramic companies, there are 8 in Guangdong; which shows strong capacity in expanding the market and enhancing market share.
7. Paper Making
Guangdong's paper making industry has played an important role in the country. At present, the only state key lab of pulp and paper industry and state research centre, which combines the process of production, study, scientific research, and trade together, is established in Guangdong.
With subtropical warm and wet monsoon climate, most areas in Guangdong are abundant in rain, very suitable for artificial fast growing forest. Therefore, not only water resource but also fibber material resource needed by paper making industry, is truly guaranteed. In recent years, foreign investors flock into Guangdong to invest in lumber production and paper mill.
Guangdong has initially formed a papermaking cluster, with the Pearl River Delta as its centre. It mainly includes Guangzhou, Dongguan, Foshan, Jiangmen, Zhuhai, Shenzhen and Zhanjiang; 80% companies of the province gather here. Guangdong's paper making industry is entering a stage of mass production, and has built up a group of famous companies.
Guangdong is stepping forward toward a big province of paper making industry, potent in scope, equipment, efficiency, technique, quality and management. It aims to produce 11 million tons of paper and cardboard, 0.85 million tons of pulp commodity in 2010
8. Pharmaceutical
Guangdong's pharmaceutical industry is eminent and ranks at the front of Chinese provinces. Its traditional medicine, chemical-pharmaceutical preparation and bio-pharmaceutical product take the leading place in China. Some medical equipment with advanced technology has advantage of competitiveness. In 2005, the increased value of the Pharmaceutical industry gained a tremendous increase, up 14.8%.
Guangdong's pharmaceutical industry is more concentrated than average level, prominent in market scale and industrial restructuring. A complete industrial system, including chemical pharmaceutics, Chinese traditional medicine, biological pharmaceutics, medical equipment and medical business, has initially come into being. There are a number of large-scale medical and pharmaceutical enterprises, which play an important role in China's pharmaceutical economy.
Guangdong has made big progress in chemical-pharmaceutical preparation. With rather strong competitiveness in developing and selling new types of this preparation, it keeps ahead in this field among China. Chemical-pharmaceutical enterprises, such as Shenzhen Kexing Biotech Co., Ltd, Kangtai biological products Co., Ltd, Guangdong Techpool Bio-Pharmaceutical Co., Ltd., and medical equipment enterprises, such as Shenzhen Anke High-tech Co., Ltd, Maidray Co. Ltd., are all competitive in their own trade.
9. Automobile
Viewed from comprehensive economic indicators, for example, the added value of industrial output, industrial profits and sales revenue, Guangdong's automotive industry is among the top in China. In recent years, Guangdong has made great efforts to create a favourable investment environment to attract more foreign investments, restructure automobile industry, and expand producing scale and improve manufacturing capability. A number of famous carmakers such as Honda, Isuzu, Nissan and Toyota have settled in Guangdong.
Guangdong has become the largest automobile-manufacturing base in South China. Now, with Guangzhou as manufacturing centre, focused on cars, based on car-components, assisted by coaches and coach builder cars, a car manufacturing pattern, along with a motorcar manufacturing cluster, competent in product developing and competitive in export, has come into being. The competitiveness of Guangdong's luxurious cars is very strong already. In 2005, the increased value of Guangdong's automobile industry soared by 40.5%, the highest rate in the nine pillar industries. The total output reached 413,583 units, up 50.8% over the previous year, among which the output of sedan car increased by 52.9%.
With the development of automotive industry, a good many automobile component suppliers swarm into Guangdong. As Pearl River Delta Region becomes a convergent place for carmakers, Guangzhou economic and technical development zone, Guangzhou Nansha development zone and Huadu, develop into large-scale automobile component bases.
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