Fixed-asset investment continues to surge in Guangzhou, offsetting weakness in foreign trade, while new industries are making a bigger impact as economic restructuring gathers speed, according to latest data from the provincial capital.
From January to May, fixed-asset investment surged 19.3%, an increase of 11.4 percentage points YoY. Moreover, projects actually completed jumped 41.1%, mostly thanks to 37 major projects, each worth over RMB1 billion.
City officials must be pleased with the composition of this investment. The real estate industry grew by a modest 15.3%, while infrastructure investment jumped 28.4% as railway networks continued to expand. But it was industrial investment that stood out, up 20.2%, with high-end manufacturing investment jumping by 38.4%. It now accounts for 58.6% of the city’s total industrial investment, an increase of 7.7 percentage points YoY.
When it comes to non-tangible assets, money is being poured into future growth potential. Science and technology R&D was up 44.5%, while the financial services industry is attracting strong inflows – investment was up by 4.1 times YoY.
Moreover, although overall industrial output is still showing signs of weakness, growing just 2.4%, hi-tech production is gaining ground as economic restructuring gathers pace. The stars are new energy vehicles (+42.1%), tablet PCs (up 4.6 times) and integrated circuits (up 1.3 times). Smaller niches are growing fast, too: optical instruments (+17.8%); lithium-ion batteries (+14.8%); industrial automatic regulating instruments and control systems in intelligent manufacturing equipment products (+11.3%).
Trade is still a drag. However, it should be kept in mind that Guangzhou is more an industrial powerhouse and less of a trading hub than Shenzhen. From January to May, the total import and export value of the city was 374.01 billion yuan, down 0.1%. The decline was 2.7 percentage points lower than in Jan-March, with imports up 16.4% and exports down 11.9%.
The fourth pillar of GDP, consumption, held steady from January to May, with retail sales up 8% to RMB402.966 billion. Women held up much more than half the sky, with sales of jewelry products up 70% and cosmetics up 47.4%.
Driving much of this growth is the continuing shift to online-offline shopping service models. Online sales volumes jumped 91.3%, with the F&B business standing out. It is not only locally driven business, either. The total import and export value through bonded-logistics zones climbed 28.8% to RMB41.06 billion, accounting for 11.0% of the city’s total foreign trade.