Identifier
Created
Classification
Origin
07GUANGZHOU87
2007-01-19 08:42:00
UNCLASSIFIED
Consulate Guangzhou
Cable title:
Fujian Province Q3 Economic Report
how-toVZCZCXRO2450 RR RUEHCN RUEHGH RUEHVC DE RUEHGZ #0087/01 0190842 ZNR UUUUU ZZH R 190842Z JAN 07 FM AMCONSUL GUANGZHOU TO RUEHC/SECSTATE WASHDC 5704 INFO RUEHOO/CHINA POSTS COLLECTIVE RUCPDOC/USDOC WASHDC RUEHRC/USDA FAS WASHDC 0929 RUEATRS/DEPT OF TREASURY WASHDC RUEAIIA/CIA WASHDC RUEKJCS/DIA WASHDC RHHMUNA/HQ USPACOM HONOLULU HI
UNCLAS SECTION 01 OF 03 GUANGZHOU 000087
SIPDIS
SIPDIS
STATE FOR EAP/CM
USDOC FOR 4420/ITA/MAC/MCQUEEN
STATE PASS USTR
USPACOM FOR FPA
TREASURY FOR OASIA/INA-CRANE
USDA FOR FAS/ITP AND FAS/FAA
E.O. 12958: N/A
TAGS: ECON ETRD EINV EAGR ELAB CH
SUBJECT: Fujian Province Q3 Economic Report
REF: A) 06 Guangzhou 29114
B) 06 Guangzhou 25667
UNCLAS SECTION 01 OF 03 GUANGZHOU 000087
SIPDIS
SIPDIS
STATE FOR EAP/CM
USDOC FOR 4420/ITA/MAC/MCQUEEN
STATE PASS USTR
USPACOM FOR FPA
TREASURY FOR OASIA/INA-CRANE
USDA FOR FAS/ITP AND FAS/FAA
E.O. 12958: N/A
TAGS: ECON ETRD EINV EAGR ELAB CH
SUBJECT: Fujian Province Q3 Economic Report
REF: A) 06 Guangzhou 29114
B) 06 Guangzhou 25667
1. (U) SUMMARY: Fujian continued its robust economic growth
in the third quarter (Q3) of 2006 despite the negative
effects of natural disasters. Fujian's 12.5% gross
domestic product (GDP) growth was fueled by the
manufacturing and service sectors, exceeding the national
Q3 GDP growth rate of 10.7%. The Province's main exports
included machinery (USD 12.9 billion),hi-tech products
(USD 6.4 billion),garments (USD 4.2 billion),and footwear
(USD 3 billion). Exports to Russia, Switzerland, Brazil,
and Ukraine increased by over 50%. Foreign direct
investment (FDI) and fixed-asset investment soared, the
latter increasing by 36.5% compared to the same period last
year. Investments focused on urban areas, especially in
the real estate and service sectors. The rural-urban
income gap continued to widen, due in part to lower farm
incomes as a result of crop damage from typhoons and
flooding. END SUMMARY.
FUJIAN FAST FACTS
--------------
GDP, billion USD 62.6 (12.5%)
Imports, billion USD 15.9 (9.1%)
Exports, billion USD 29.6 (17.4%)
FDI, actual use, billion USD 2.6 (27.6%)
Fixed asset investment, billion USD 24.5 (36.5%)
Retail sales, billion USD 24.4 (14.5%)
Consumer Price Index 100.5 (0.5%)
Disposable income per capita (urban),USD 1,305.4 (11.6%)
Disposable income per capita (rural),USD 285.9 (11.1%)
(U) Percentages in parentheses represent growth compared to
the same period in 2005 (according to the Fujian Statistics
Bureau). All currency conversions in this report are made
at the average exchange rate of USD 1 = RMB 8.0071.
2. (U) In the first three quarters, Fujian's GDP reached
RMB 500.98 billion (USD 65.6 billion),up 12.5% from the
same period of last year. The value-added of the primary,
secondary, and tertiary industries was RMB 50.26 billion
(USD 6.3 billion),RMB 257.48 billion (USD 32.2 billion)
and RMB 193.24 billion (USD 2.4 billion) respectively, up
2.1%, 15.6% and 11.3% respectively.
FARMING, FORESTRY, AND HUSBANDRY
--------------
3. (U) The gross output of the farming, forestry, husbandry,
and fishery industries totaled RMB 83.49 billion (USD 10.4
billion),up 2.6% from the same period of last year.
-- Grain production decreased, while the output of cash
crops like fruit, tea and edible mushrooms increased by
4.7%, 6.4% and 7.5% respectively.
-- Bamboo production grew by 25%.
-- Meat and egg production increased by 2.9% and 1.4%
respectively; the output of milk decreased by 6.6%.
-- Output from the fishery industry decreased by 1.1% due
to high diesel fuel costs, typhoons, and a Ministry of
Agriculture policy reducing the number of fishing vessels
and shifting resources to other industries.
INDUSTRIAL PRODUCTION
--------------
4. (U) Industrial output reached RMB 709.08 billion (USD
88.6 billion),up 19.5%. In the first three quarters, the
value-added of industrial enterprises with annual sales
revenue of RMB 5 million (USD 624,000) or more (enterprises
"above designated size," according to the Statistics Bureau)
was RMB 195.96 billion (USD 24.5 billion),up 19.5%.
FIXED-ASSET INVESTMENT
--------------
5. (U) Fixed-asset investments reached RMB 196.14 billion
GUANGZHOU 00000087 002 OF 003
(USD 24.5 billion),up 36.5%. RMB 172.45 billion (USD 21.5
billion) were invested in urban area, up 38.2%.
-- Investment in infrastructure reached RMB 49.49 billion
(USD 6.2 billion),up 34.9%.
-- Growth of investment to the manufacturing sector slowed.
-- Investment in real estate grew by 43.5% to RMB 51.11
billion (USD 6.4 billion). Over 63 million square-meters
of commercial floor space were under construction, up 15.1%,
and over 13 million square-meters of floor space were sold,
up 24.1%.
6. (U) Real estate prices continued to rise in Fujian. The
average price for commercial housing in Fuzhou was RMB
4,670 (USD 583) per square meter, up 6.3% year-on-year; RMB
6,986 (USD 872) per square meter in Xiamen, up 6.7%; and
RMB 3,952 (USD 494) in Quanzhou, up 5.4%. Despite the
Central Government's efforts to cool down the real estate
market, in September 2006, prices of new apartments in
Xiamen and Fuzhou rose by 11.4% and 10% respectively.
Economists believe that there is a real estate bubble in
Fujian, and that the impact of economic control measures
will likely not be evident until mid-2007.
RETAIL SALES
--------------
7. (U) Retail sales reached RMB 194.71 billion (USD 24.3
billion),up 14.5%. The price index rose 0.5%. Sales of
motors reached RMB 12.32 billion (USD 1.5 billion),up
34.8%; sales of petroleum and its byproducts amounted to
RMB 11.46 billion (USD 1.4 billion),up 52.3%.
FOREIGN TRADE
--------------
8. (U) Fujian's foreign trade volume reached USD 45.5
billion in the first three quarters, up 14.38%. Imports
reached USD 15.9 billion, up 9.1%; exports reached USD 29.6
billion, up 17.44%.
-- Private enterprises' foreign trade volume grew to USD
9.2 billion. Foreign-invested enterprises contributed
63.9% of the total foreign trade volume, reaching USD 29.1
billion, up 11.18%. State-owned enterprises' foreign trade
volume only grew 4.4% to reach USD 7.2 billion.
-- Fujian's top five export markets were the United States
(USD 7.7 billion, up 17.2%),the EU (USD 5.6 billion, up
15.19%),Japan (USD 4.5 billion, up 4.96%),Hong Kong (USD
2.2 billion, up 9.9%),and ASEAN (USD 2.1 billion, up
23.61%). Exports to Russia, Switzerland, Brazil, and
Ukraine increased by over 50%.
-- Fujian's major exports included machinery (USD 12.9
billion, up 15.7%),hi-tech products (USD 6.4 billion, up
14.34%),garments (USD 4.2 billion, up 21.88%),and
footwear (USD 3 billion, up 13.36%).
-- The top five exporters to Fujian were Taiwan (USD 3.1
billion, up 17.2%),Japan (USD 1.9 billion, up 3.44%),
ASEAN (USD 1.8 billion, up 6.13%),Korea (USD 1.6 billion,
up 4.66%),and the United States (USD 1.6 billion, up
2.95%).
-- Major imports included machinery (USD 8.5 billion, up
12.36%),hi-tech products (USD 4 billion, up 8.96%),
agricultural products (USD 980 million, up 8.68%),plastic
(USD 994 million, down 5.41%),and steel (USD 381 million,
down 26.97%).
FOREIGN DIRECT INVESTMENT
--------------
9. (U) Top investors to Fujian were Hong Kong, the Virgin
Islands, Taiwan, ASEAN, and Japan, which accounted for
81.2% of the total contracted foreign investment in the
Province. The utilized foreign direct investment (mainly
in the manufacturing sector) amounted to USD 25.8 billion,
up 27.6%. The average size of a foreign invested project
was USD 3.7 million. USD 1.2 billion was invested in the
service sector, up 79.1%.
GUANGZHOU 00000087 003 OF 003
RESIDENTS' INCOME AND EMPLOYMENT
--------------
10. (U) Urban residents' per capita disposable income was
RMB 10,452.74 (USD 1,305.4),up 11.6%; rural residents' per
capita cash income was RMB 3,612.91 (USD 451.2),up only
8.6%.
11. (U) A total of 494,600 new employees entered the
workforce in the first three quarters in 2006. Of this
total, 339,000 were from the rural population and joined
the manufacturing sector. Companies in Xiamen, Fuzhou,
Quanzhou, and Zhangzhou were the top recruiters. The
official unemployment rate for registered residents
remained around 3.95% in the Province.
PROBLEMS IDENTIFIED BY THE PROVINCE
--------------
12. (U) Natural disasters, such as Typhoons Chanchu, Kaemi,
and Prapiroon, caused a decrease in agricultural growth.
The gross output and value-added of the agricultural sector
decreased by 1.5% in the first three quarters. The
Statistics Bureau noted the pressure to increase farmers'
income became more intense due to the widening rural-urban
income gap. The Bureau also claimed that a widening
industrial price scissors gap (an economic phenomenon
wherein changing world price levels cause a country's
exports to decline in value, while the valuation of its
imports remains relatively stable) caused profits to
decline. The newly released tax reimbursement policy,
international trade conflicts (such as the EU shoe dumping
case against China),and barriers set by foreign countries
were challenges to Fujian's foreign trade development.
PREDICTION OF ANNUAL ECONOMIC PERFORMANCE
--------------
13. (U) The Statistics Bureau predicted that Fujian's year-
end GDP growth will be 12%. The gross output of farming,
forestry, husbandry, and fishery will grow by 2.8%. The
output of industries "above designated size" will increase
by 22%. Retail sales will grow by 14.5%. Urban residents'
per capita disposable income will reach USD 1,698.5; rural
residents' per capita cash income will reach USD 599.5, up
10.4% and 8% respectively. The consumer price index will
be 100.6.
GOLDBERG
SIPDIS
SIPDIS
STATE FOR EAP/CM
USDOC FOR 4420/ITA/MAC/MCQUEEN
STATE PASS USTR
USPACOM FOR FPA
TREASURY FOR OASIA/INA-CRANE
USDA FOR FAS/ITP AND FAS/FAA
E.O. 12958: N/A
TAGS: ECON ETRD EINV EAGR ELAB CH
SUBJECT: Fujian Province Q3 Economic Report
REF: A) 06 Guangzhou 29114
B) 06 Guangzhou 25667
1. (U) SUMMARY: Fujian continued its robust economic growth
in the third quarter (Q3) of 2006 despite the negative
effects of natural disasters. Fujian's 12.5% gross
domestic product (GDP) growth was fueled by the
manufacturing and service sectors, exceeding the national
Q3 GDP growth rate of 10.7%. The Province's main exports
included machinery (USD 12.9 billion),hi-tech products
(USD 6.4 billion),garments (USD 4.2 billion),and footwear
(USD 3 billion). Exports to Russia, Switzerland, Brazil,
and Ukraine increased by over 50%. Foreign direct
investment (FDI) and fixed-asset investment soared, the
latter increasing by 36.5% compared to the same period last
year. Investments focused on urban areas, especially in
the real estate and service sectors. The rural-urban
income gap continued to widen, due in part to lower farm
incomes as a result of crop damage from typhoons and
flooding. END SUMMARY.
FUJIAN FAST FACTS
--------------
GDP, billion USD 62.6 (12.5%)
Imports, billion USD 15.9 (9.1%)
Exports, billion USD 29.6 (17.4%)
FDI, actual use, billion USD 2.6 (27.6%)
Fixed asset investment, billion USD 24.5 (36.5%)
Retail sales, billion USD 24.4 (14.5%)
Consumer Price Index 100.5 (0.5%)
Disposable income per capita (urban),USD 1,305.4 (11.6%)
Disposable income per capita (rural),USD 285.9 (11.1%)
(U) Percentages in parentheses represent growth compared to
the same period in 2005 (according to the Fujian Statistics
Bureau). All currency conversions in this report are made
at the average exchange rate of USD 1 = RMB 8.0071.
2. (U) In the first three quarters, Fujian's GDP reached
RMB 500.98 billion (USD 65.6 billion),up 12.5% from the
same period of last year. The value-added of the primary,
secondary, and tertiary industries was RMB 50.26 billion
(USD 6.3 billion),RMB 257.48 billion (USD 32.2 billion)
and RMB 193.24 billion (USD 2.4 billion) respectively, up
2.1%, 15.6% and 11.3% respectively.
FARMING, FORESTRY, AND HUSBANDRY
--------------
3. (U) The gross output of the farming, forestry, husbandry,
and fishery industries totaled RMB 83.49 billion (USD 10.4
billion),up 2.6% from the same period of last year.
-- Grain production decreased, while the output of cash
crops like fruit, tea and edible mushrooms increased by
4.7%, 6.4% and 7.5% respectively.
-- Bamboo production grew by 25%.
-- Meat and egg production increased by 2.9% and 1.4%
respectively; the output of milk decreased by 6.6%.
-- Output from the fishery industry decreased by 1.1% due
to high diesel fuel costs, typhoons, and a Ministry of
Agriculture policy reducing the number of fishing vessels
and shifting resources to other industries.
INDUSTRIAL PRODUCTION
--------------
4. (U) Industrial output reached RMB 709.08 billion (USD
88.6 billion),up 19.5%. In the first three quarters, the
value-added of industrial enterprises with annual sales
revenue of RMB 5 million (USD 624,000) or more (enterprises
"above designated size," according to the Statistics Bureau)
was RMB 195.96 billion (USD 24.5 billion),up 19.5%.
FIXED-ASSET INVESTMENT
--------------
5. (U) Fixed-asset investments reached RMB 196.14 billion
GUANGZHOU 00000087 002 OF 003
(USD 24.5 billion),up 36.5%. RMB 172.45 billion (USD 21.5
billion) were invested in urban area, up 38.2%.
-- Investment in infrastructure reached RMB 49.49 billion
(USD 6.2 billion),up 34.9%.
-- Growth of investment to the manufacturing sector slowed.
-- Investment in real estate grew by 43.5% to RMB 51.11
billion (USD 6.4 billion). Over 63 million square-meters
of commercial floor space were under construction, up 15.1%,
and over 13 million square-meters of floor space were sold,
up 24.1%.
6. (U) Real estate prices continued to rise in Fujian. The
average price for commercial housing in Fuzhou was RMB
4,670 (USD 583) per square meter, up 6.3% year-on-year; RMB
6,986 (USD 872) per square meter in Xiamen, up 6.7%; and
RMB 3,952 (USD 494) in Quanzhou, up 5.4%. Despite the
Central Government's efforts to cool down the real estate
market, in September 2006, prices of new apartments in
Xiamen and Fuzhou rose by 11.4% and 10% respectively.
Economists believe that there is a real estate bubble in
Fujian, and that the impact of economic control measures
will likely not be evident until mid-2007.
RETAIL SALES
--------------
7. (U) Retail sales reached RMB 194.71 billion (USD 24.3
billion),up 14.5%. The price index rose 0.5%. Sales of
motors reached RMB 12.32 billion (USD 1.5 billion),up
34.8%; sales of petroleum and its byproducts amounted to
RMB 11.46 billion (USD 1.4 billion),up 52.3%.
FOREIGN TRADE
--------------
8. (U) Fujian's foreign trade volume reached USD 45.5
billion in the first three quarters, up 14.38%. Imports
reached USD 15.9 billion, up 9.1%; exports reached USD 29.6
billion, up 17.44%.
-- Private enterprises' foreign trade volume grew to USD
9.2 billion. Foreign-invested enterprises contributed
63.9% of the total foreign trade volume, reaching USD 29.1
billion, up 11.18%. State-owned enterprises' foreign trade
volume only grew 4.4% to reach USD 7.2 billion.
-- Fujian's top five export markets were the United States
(USD 7.7 billion, up 17.2%),the EU (USD 5.6 billion, up
15.19%),Japan (USD 4.5 billion, up 4.96%),Hong Kong (USD
2.2 billion, up 9.9%),and ASEAN (USD 2.1 billion, up
23.61%). Exports to Russia, Switzerland, Brazil, and
Ukraine increased by over 50%.
-- Fujian's major exports included machinery (USD 12.9
billion, up 15.7%),hi-tech products (USD 6.4 billion, up
14.34%),garments (USD 4.2 billion, up 21.88%),and
footwear (USD 3 billion, up 13.36%).
-- The top five exporters to Fujian were Taiwan (USD 3.1
billion, up 17.2%),Japan (USD 1.9 billion, up 3.44%),
ASEAN (USD 1.8 billion, up 6.13%),Korea (USD 1.6 billion,
up 4.66%),and the United States (USD 1.6 billion, up
2.95%).
-- Major imports included machinery (USD 8.5 billion, up
12.36%),hi-tech products (USD 4 billion, up 8.96%),
agricultural products (USD 980 million, up 8.68%),plastic
(USD 994 million, down 5.41%),and steel (USD 381 million,
down 26.97%).
FOREIGN DIRECT INVESTMENT
--------------
9. (U) Top investors to Fujian were Hong Kong, the Virgin
Islands, Taiwan, ASEAN, and Japan, which accounted for
81.2% of the total contracted foreign investment in the
Province. The utilized foreign direct investment (mainly
in the manufacturing sector) amounted to USD 25.8 billion,
up 27.6%. The average size of a foreign invested project
was USD 3.7 million. USD 1.2 billion was invested in the
service sector, up 79.1%.
GUANGZHOU 00000087 003 OF 003
RESIDENTS' INCOME AND EMPLOYMENT
--------------
10. (U) Urban residents' per capita disposable income was
RMB 10,452.74 (USD 1,305.4),up 11.6%; rural residents' per
capita cash income was RMB 3,612.91 (USD 451.2),up only
8.6%.
11. (U) A total of 494,600 new employees entered the
workforce in the first three quarters in 2006. Of this
total, 339,000 were from the rural population and joined
the manufacturing sector. Companies in Xiamen, Fuzhou,
Quanzhou, and Zhangzhou were the top recruiters. The
official unemployment rate for registered residents
remained around 3.95% in the Province.
PROBLEMS IDENTIFIED BY THE PROVINCE
--------------
12. (U) Natural disasters, such as Typhoons Chanchu, Kaemi,
and Prapiroon, caused a decrease in agricultural growth.
The gross output and value-added of the agricultural sector
decreased by 1.5% in the first three quarters. The
Statistics Bureau noted the pressure to increase farmers'
income became more intense due to the widening rural-urban
income gap. The Bureau also claimed that a widening
industrial price scissors gap (an economic phenomenon
wherein changing world price levels cause a country's
exports to decline in value, while the valuation of its
imports remains relatively stable) caused profits to
decline. The newly released tax reimbursement policy,
international trade conflicts (such as the EU shoe dumping
case against China),and barriers set by foreign countries
were challenges to Fujian's foreign trade development.
PREDICTION OF ANNUAL ECONOMIC PERFORMANCE
--------------
13. (U) The Statistics Bureau predicted that Fujian's year-
end GDP growth will be 12%. The gross output of farming,
forestry, husbandry, and fishery will grow by 2.8%. The
output of industries "above designated size" will increase
by 22%. Retail sales will grow by 14.5%. Urban residents'
per capita disposable income will reach USD 1,698.5; rural
residents' per capita cash income will reach USD 599.5, up
10.4% and 8% respectively. The consumer price index will
be 100.6.
GOLDBERG