Guangzhou faces a year of “rather significant downward pressure” this year, the city’s leading think-tank says. Nevertheless, the economy will remain stable, with growth in the range of 6.2% to 6.8%.
This is largely due to two factors, the Guangzhou Academy of Sciences says. The first is a stable residential property market. The city will see 90,000 new housing units added which, considering the surge in land supply last year, indicates construction in the real-estate industry is not overheated.
In 2018, 60 residential land parcels were sold, totaling 437.90 hectares, an increase of 78.9% over the previous year. These parcels can yield up to 100.517 million square meters, an increase of 49.9%. However, investment into construction of real-estate projects is only up 13% so far this year, indicating developers are taking a longer-term approach. This is hardly surprising, considering the way the city government, like many others across across the country, curbed demand last year to rein in prices. Volumes of new home sales are predicted to be flat this year, while the secondary market is expected to pick up.
The Guangzhou Academy of Sciences likes what it sees in the economy when it comes to investment and output. “More relaxed” macroeconomic policies are attracting more outside investment, and the city’s industrial upgrade plans are bearing fruit. Eight emerging industries are growing at above-average rates. They are: bio-medicine and healthcare; new energy; railways; high-end services; culture and design; advanced IT; intelligent equipment and robots; and new materials and fine chemicals. These grew by more than 8%, higher than the city’s GDP growth rate, and now account for 19.2% of GDP.
Finance seems to be an area of heightened expectations. Financial services still only account for 8.3% of GDP, and just 6.8% of the city’s tax revenue. It is expected to grow at above-average rate this year.
Read more (in Chinese).