SFC Markets and Finance | Guangdong's GDP (Q1-Q3) Approaches 10 Trillion Yuan, What's the Momentum？

南方财经全媒体记者杨雨莱 广州报道

Vitality: Guangdong's GDP (Q1-Q3) Approaches 10 Trillion Yuan

Guangdong province announced its newest economic data of the first three quarters on Oct 21st.  “Vitality” is shown in Guangdong’s economy overall. Guangdong in the first three quarters of 2024, achieved 9,993.918 billion yuan of its GDP, just a step away from the 10 trillion yuan mark, with a year-on-year increase of 3.4%. What are the highlights of Guangdong's economic data? Will Guangdong maintain its growth momentum in the future? Liu Guohong, the Vice President at China Development Institute shared his analysis with us.

Guangdong’s economic achievements are hard-earned

Liu Guohong: I believe Guangdong's economy has reached such a significant scale and is now at a juncture where further progress is within reach. It's worth mentioning that despite its vast size, the economy has still maintained a growth rate of 3.4%, which is quite impressive.

Secondly, in terms of Guangdong's overall economic development, there are many highlights. For instance, in sectors driving new momentum and high-tech fields, both investment and the growth rate of overall production value have maintained a relatively high state of growth. I think these economic achievements are hard-earned.

Guangdong exhibits vitality in innovation fields

Liu Guohong: Currently, based on the data, Guangdong is exhibiting vitality in cutting-edge technological innovation fields.

In the field of electronic information and robotics, the overall economic statistics of Guangdong are very promising. As for Guangdong's traditional industries, such as large-scale chemicals and equipment manufacturing, I think Guangzhou should stabilize the fundamentals.

From the perspective of manufacturing, we cannot narrowly interpret the historical significance of manufacturing as the leading sector. For example, to push our manufacturing and industry to a higher level, we must focus on both ends of the smile curve. In addition to establishing processing and manufacturing bases, we also need to make concerted efforts in technological innovation, R&D, branding, marketing, logistics, and other fields within the productive services sector. Only by doing so can Guangdong's manufacturing become large and strong. Otherwise, we may face increasing competition and challenges.

This includes competition both domestically and internationally, as well as among regions within China. We may gradually lose some of our advantages. Therefore, I believe that the development of productive services should be given high priority.

Guangdong owns the advantage of opening up

Liu Guohong: Looking forward to future development, I think Guangdong, in particular, differs from other regions in China, and they are uncomparable. Guangdong should fully leverage its advantage as the forefront of reform and opening-up.

After more than 40 years of development, Guangdong's market economy system is actually more mature and comprehensive compared to other parts of the country.

Therefore, we must respect all market entities in Guangdong for their diverse choices and innovations. Only by allowing millions of these market entities to innovate and seek paths for future development. We transition from the current economic growth pressure to a state of vigorous development.

In fact, I have full confidence in Guangdong. My confidence stems from the fact that Guangdong respects the market more and its market mechanisms are actually more complete and sophisticated. 

Stabilization: Guangdong's Industrial Added Value(Q1-Q3) has 4.7% Increase (Year-on-Year)

The word “Stabilization” can be used in Guangdong's industrial development.

In the first three quarters, Guangdong's industrial added value above designated size was 3.00 trillion yuan, an increase of 4.7% year on year.

How to view the recovery of Guangdong's industrial sector? What kinds of action should be taken to further boost Guangdong’s industrial growth? Gong Jiayong, the director of CCID South China Intellectual Innovation Center provided his thoughts.

Various positive factors for Guangdong’s industrial development

Gong Jiayong: On one hand, the government is optimizing the investment environment, which reduces costs for businesses, including various tax and fee reductions in the first half of the year.

Secondly, there is significant support for high-tech manufacturing, and advanced manufacturing, leading to relatively high investment and growth rates in these areas, which adds considerable value.

Additionally, the new policies have had a positive impact on consumption, resulting in relatively fast increases in corporate profits.

As for foreign trade, Guangdong's foreign trade remains strong. For example, exports to ASEAN, the U.S., and Belt and Road countries are developing rapidly, particularly driven by the growth of private enterprises' imports and exports.

Consumption is also driving growth, especially in sectors like new energy vehicles, public infrastructure, home appliances, medical equipment, and communication devices, which are all experiencing significant growth.

Speed up the transformation and upgrading of industries

Gong Jiayong: The first priority is to accelerate the introduction of investment policies. Secondly, we need to stabilize Guangdong’s foreign trade. Thirdly, we need to expand effective levels of investment, especially in key projects like Guangdong’s various initiatives, including the "hundred-thousand-ten thousand project" and "manufacturing as the master".

Additionally, we should speed up the transformation and upgrading of our industries, particularly in areas related to the new quality productive forces and new industries and products. We need to stimulate investment in these sectors. The overall fundamentals are recovering and stabilizing, moving in a positive direction. New growth drivers and the industrial structure are continuously being optimized.

Resilience: Guangdong's Foreign Trade(Q1-Q3) Grew by 11.1% (Year-on-Year)

“Resilience” is the word to describe Guangdong's Foreign Trade.

In the first three quarters of 2024, Guangdong's foreign trade imports and exports reached 6.75 trillion yuan, a year-on-year increase of 11.1%. How has Guangdong maintained the resilience of its foreign trade despite the unfavorable factor of weakening overseas demand? What is the expected trend for Guangdong's foreign trade in the fourth quarter? We have Chen Wanling, Dean Research Center for International Trade and Economics at Guangdong University of Foreign Studies to discuss with us.

Guangdong’s foreign trade shows resilience

Chen Wanling: Guangdong's foreign trade data for the first three quarters has increased compared to last year. Its share of the national total has also rebounded. The toughest period for Guangdong's foreign trade has ended, fully demonstrating its resilience. The recovery of its sustainability has become more apparent in the third quarter.

The diversified development of imports and exports

Chen Wanling: Structurally, the so-called "New Threes" contribute only modestly. Guangdong still has many key sectors within its major industries. Despite the pressure from the United States, the focus of this pressure is primarily on high-tech industries. There is still room for labor-intensive products. Huadu in Guangzhou and some areas in Foshan still have significant export growth potential, especially in labor-intensive products.

Guangdong’s diversified and multi-layered structure has sustained its resilience. Despite the pressure, the high-tech sector still shows potential, shifting the market to Belt and Road countries and emerging economies. The market for labor-intensive products has not seen significant changes because this sector is not being targeted, retaining some potential. Seeking new markets is also a reflection of our diversification efforts, with some products in traditional markets still having room for growth.

Due to inflation, there is a demand for China’s labor-intensive products to fill gaps, needed in the early stages of market development. Thus, low-end products still have a market, while high-end products are diversified towards emerging economies. This has enabled Guangdong's exports to sustain steady growth.

Positive prospects of foreign trade

Chen Wanling: Another aspect is that last year's decline resulted in a relatively low baseline, making this year's substantial growth appear more pronounced. By the fourth quarter, as previous orders had already been largely confirmed, this continuing trend is expected to maintain a positive momentum throughout the year. After inflation, the U.S. will gradually lower its interest rates, as many other countries have already done, needing to promote economic growth. The economy is likely to steadily improve in the future, marking an early stage in the recovery process. We should expect positive prospects and trends next year.

（市场有风险，投资需谨慎。本节目嘉宾意见仅代表本人观点。）

策划：于晓娜

监制：施诗

编辑：李依农

记者：杨雨莱 丁莉 实习生李宥瑾

制作：蔡于恬

摄影：李群

新媒体统筹：丁青云 曾婷芳 赖禧 黄达迅

海外运营监制: 黄燕淑

海外运营内容统筹: 黄子豪 

海外运营编辑：庄欢 吴婉婕 龙李华 张伟韬

出品：南方财经全媒体集团