VZCZCXYZ0000
RR RUEHWEB

DE RUEHGZA #5667 2200135
ZNR UUUUU ZZH ZUI RUEWCSE2141 2201228
R 080135Z AUG 06
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 0000
INFO CHINA POSTS COLLECTIVE
RUCPDOC/USDOC WASHDC
RUEHRC/USDA FAS WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHDC
RUEKJCS/DIA WASHDC
RHHMUNA/HQ USPACOM HONOLULU HI

UNCLAS GUANGZHOU 025667 
 
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: SOUTH CHINA Q1 ECONOMIC REPORT 
 
REF:  A) GUANGZHOU 4387 
 
      B) GUANGZHOU 6592 
 
¶1. (U) SUMMARY:  THIS REPORT REVIEWS THE 2006 FIRST QUARTER 
ECONOMIC AND TRADE PERFORMANCE FOR SOUTH CHINA.  ECONOMIC 
INDICATORS FOR GUANGDONG, FUJIAN, AND HAINAN PROVINCES AS 
WELL AS FOR THE GUANGXI ZHUANG AUTONOMOUS REGION SHOW 
SIGNIFICANT GROWTH.  EACH PROVINCE OR REGION RECORDED DOUBLE- 
DIGIT GDP GROWTH, RAPID INCREASES IN EXPORTS, AND A LEAP IN 
FIXED ASSET INVESTMENTS.  SOUTH CHINA'S ECONOMY SHOWS NO 
SIGNS OF COOLING.  END SUMMARY. 
 
NOTE ON CURRENCY CONVERSIONS AND STATISTICS 
------------------------------------------- 
 
¶2. (U) ALL CURRENCY CONVERSIONS IN THIS REPORT ARE MADE AT 
THE AVERAGE EXCHANGE RATE OF USD 1 = RMB 8.0484.  UNLESS 
OTHERWISE NOTED, PERCENTAGE GROWTH FIGURES ARE OVER THE SAME 
PERIOD OF 2005.  READERS SHOULD BEAR IN MIND THAT THE 
MAJORITY OF STATISTICS PROVIDED IN THIS REPORT ARE FROM 
CHINESE GOVERNMENT SOURCES.  AS SUCH, THEY SHOULD BE TAKEN 
WITH THE PROVERBIAL GRAIN OF SALT.  THEY ARE OF LIMITED 
RELIABILITY, AND ARE BEST USED IN COMPARISON TO OTHER TIME 
PERIODS.  EVEN THEN, THE STATISTICS MAY BE OF LIMITED 
ACCURACY, SINCE THE METHODOLOGIES USED TO CALCULATE THE 
STATISTICS OFTEN CHANGE WITHOUT NOTICE.  IN THE PAST, 
AUTHORITIES HAVE BEEN LOATH TO EXPLAIN ANY IRREGULARITIES OR 
CHANGES. 
 
GUANGDONG 
--------- 
 
¶3. (U) IN THE FIRST QUARTER, THE PROVINCIAL ECONOMY SHOWED 
STEADY GROWTH, WITH A GDP OF RMB 520.641 BILLION (USD 64.69 
BILLION), UP 13.7%, 1.5 PERCENTAGE POINTS HIGHER THAN THE 
SAME PERIOD OF LAST YEAR, AND 3.5 PERCENTAGE POINTS HIGHER 
THAN THE NATIONAL AVERAGE.  THE ADDED VALUE OF THE PRIMARY 
SECTOR WAS RMB 21.541 BILLION (USD 2.68 BILLION), UP 4.2%; 
THE SECONDARY SECTOR RMB 250.554 BILLION (USD 31.13 
BILLION), UP 14.7%; THE TERTIARY SECTOR RMB 248.546 BILLION 
(USD 30.88 BILLION), UP 13.5%. 
 
¶4. (U) THE PROVINCE'S FIXED ASSET INVESTMENTS IN THE FIRST 
QUARTER TOTALED RMB 123.366 BILLION (USD 15.33 BILLION), UP 
19.2%, OR 4.2 PERCENTAGE POINTS HIGHER THAN THE SAME PERIOD 
OF LAST YEAR.  REAL ESTATE INVESTMENTS ACCOUNTED FOR RMB 
31.864 BILLION (USD 3.96 BILLION), UP 21.3%, OR 17.2 
PERCENTAGE POINTS HIGHER THAN THE SAME PERIOD OF LAST YEAR. 
HOUSING SALES IN THE FIRST QUARTER REACHED 9.6566 MILLION 
SQUARE METERS, WORTH RMB 45.392 BILLION (USD 5.64 BILLION), 
UP 13.7% AND 18.6% RESPECTIVELY. 
 
¶5. (U) EXPORTS GREW RAPIDLY IN THE FIRST QUARTER.  THE TOTAL 
IMPORT/EXPORT VOLUME REACHED USD 105.77 BILLION, AN INCREASE 
OF 27.4%.  EXPORTS TOTALED USD 58.25 BILLION, UP 28.7%, OR 
6.9 PERCENTAGE POINTS HIGHER THAN THE SAME PERIOD OF LAST 
YEAR.  IMPORTS TOTALED USD 47.52 BILLION, UP 25.8%, OR 19.2 
PERCENTAGE POINTS HIGHER THAN THE SAME PERIOD OF LAST YEAR. 
THE TRADE SURPLUS INCREASED BY 43.8%, REACHING USD 10.73 
BILLION. 
 
¶6. (U) RESIDENTS' INCOME CONTINUED TO INCREASE.  IN THE 
FIRST QUARTER, URBAN RESIDENTS' PER CAPITA DISPOSABLE INCOME 
REACHED RMB 4,908.89 (USD 609.92), UP 10.0%; RURAL 
RESIDENTS' RMB 1,609.40 (USD 199.97), UP 9.8%. 
 
¶7. (U) OIL PRICES PUSHED UP TRANSPORTATION AND CARGO 
DELIVERY SERVICE COSTS.  THE PRICE OF RICE IS EXPECTED TO 
RISE IN THE SECOND QUARTER.  THE IMPORT DUTIES IMPOSED BY 
THE EU ON SHOES AND TVS MAY IMPACT THE PROVINCES EXPORTS. 
IT WAS REPORTED THAT CONTRACTED FOREIGN DIRECT INVESTMENTS 
DECREASED BY 16.5%. 
 
GUANGXI 
------- 
 
¶8. (U) IN THE FIRST QUARTER, GUANGXIS GDP REACHED RMB 96.53 
BILLION (USD 11.99 BILLION), UP 13.2%, THE HIGHEST GROWTH 
SINCE 1998. 
 
 
¶9. (U) FIXED ASSET INVESTMENTS AMOUNTED TO RMB 31.325 
BILLION (USD 3.89 BILLION), UP 34.7%, OR 8.1 PERCENTAGE 
POINTS HIGHER THAN THE SAME PERIOD OF LAST YEAR.  AMONG 
FIXED ASSET INVESTMENTS, RMB 26.125 BILLION (USD 3.25 
BILLION) WENT TO URBAN AREAS, UP 37.9% FROM THE SAME PERIOD 
OF LAST YEAR.  RMB 458 MILLION (USD 56.91 MILLION) WAS 
INVESTED IN THE PRIMARY SECTOR, RMB 10.233 BILLION (USD 1.27 
BILLION) IN THE SECONDARY SECTOR, AND RMB 15.434 BILLION 
(USD 1.92 BILLION) INTO THE TERTIARY SECTOR, UP 40.2%, 50.2% 
AND 30.7% RESPECTIVELY.  INVESTMENTS IN REAL ESTATE 
DEVELOPMENT AMOUNTED TO RMB 5.247 BILLION (USD 651.93 
MILLION), UP 43% FROM THE SAME PERIOD OF LAST YEAR.  HOUSING 
PRICES REMAINED STABLE, WITH AN AVERAGE PRICE OF RMB 2,086 
(USD 259.18) PER SQUARE METER, ROUGHLY THE SAME LEVEL AS 
LAST YEAR. 
 
¶10. (U) RETAIL SALES IN THE FIRST QUARTER REACHED RMB 38.835 
BILLION (USD 4.83 BILLION), UP 13.1%, THE HIGHEST GROWTH 
SINCE 1997.  RMB 15.987 BILLION (USD 1.99 BILLION) OF THESE 
SALES TOOK PLACE IN RURAL AREAS. 
 
¶11. (U) THE VOLUME OF FOREIGN TRADE IN THE FIRST QUARTER 
TOTALED USD 1.388 BILLION, UP 32.6%.  EXPORTS GREW 21.5% TO 
REACH USD 731 MILLION.  ASEAN, THE EU, THE U.S., HONG KONG 
AND JAPAN WERE THE FIVE BIGGEST MARKETS FOR GUANGXI'S 
EXPORTS.  PRIVATE COMPANIES WERE THE MAJOR EXPORTERS. 
 
¶12. (U) URBAN RESIDENTS PER CAPITA DISPOSABLE INCOME 
REACHED RMB 2,870.1 (USD 356.61), UP 9.4%.  RURAL RESIDENTS' 
PER CAPITA INCOME GREW 18% TO REACH RMB 868 (USD 107.85), 
ALSO THE HIGHEST GROWTH SINCE 1997.  THE RAPID RISE IN SUGAR 
CANE PRICES AND INCREASED SALES OF AGRICULTURAL PRODUCTS 
HELPED RURAL RESIDENTS' INCOME GROW. 
 
FUJIAN 
------ 
 
¶13. (U) IN THE FIRST QUARTER, FUJIAN'S GDP REACHED RMB 
134.844 BILLION (USD 16.75 BILLION), UP 12.7%, OR 2.2 
PERCENTAGE POINTS HIGHER THAN THE SAME PERIOD OF LAST YEAR. 
THE ADDED VALUE OF THE PRIMARY, SECONDARY AND TERTIARY 
SECTORS WERE RMB 13.522 BILLION (USD 1.68 BILLION), RMB 
68.832 BILLION (USD 8.55 BILLION) AND RMB 52.49 BILLION (USD 
6.52 BILLION), UP 3.6%, 15.4% AND 12.0% RESPECTIVELY. 
 
¶14. (U) THE THREE PILLAR INDUSTRIES - THE ELECTRONIC, 
MACHINERY AND PETROCHEMICAL INDUSTRIES - HAD A GROSS 
INDUSTRIAL OUTPUT OF RMB 87.482 BILLION (USD 10.87 BILLION), 
UP 22.3%. 
 
¶15. (U) FIXED ASSET INVESTMENTS AMOUNTED TO RMB 48.23 
BILLION (USD 5.99 BILLION), UP 42.2%, OR 26.2 PERCENTAGE 
POINTS HIGHER THAN THE SAME PERIOD OF LAST YEAR.  URBAN 
REGIONS ACCOUNTED FOR RMB 42.29 BILLION (USD 5.25 BILLION) 
OF THESE INVESTMENTS, UP 43.8%, WHILE RURAL REGIONS 
ACCOUNTED FOR RMB 5.94 BILLION (USD 738.03 MILLION), UP 
31.9%. 
 
¶16. (U) RETAIL SALES TOTALED RMB 67.189 BILLION (USD 8.35 
BILLION), UP 15.3%.  THE PROVINCIAL GOVERNMENT STATED THAT 
THE INCREASED INCOME OF RESIDENTS WAS THE REASON BEHIND THE 
RISE IN CONSUMPTION. 
 
¶17. (U) THE PROVINCE'S TOTAL FOREIGN TRADE VOLUME IN THE 
FIRST QUARTER REACHED USD 13.566 BILLION, UP 15.7%.  EXPORTS 
ACCOUNTED FOR USD 8.593 BILLION, AND IMPORTS ACCOUNTED FOR 
USD 4.974 BILLION, UP 17.2% AND 13.2% RESPECTIVELY, 
RESULTING IN A TRADE SURPLUS OF USD 3.619 BILLION.  EXPORTS 
OF PRIVATE ENTERPRISES REACHED USD 2.093 BILLION, UP 53.9%, 
ACCOUNTING FOR 24.4% OF THE PROVINCES TOTAL EXPORTS.  THE 
FIVE BIGGEST EXPORT MARKETS, NAMELY THE U.S., JAPAN, THE EU, 
HONG KONG AND ASEAN, TOOK USD 6.48 BILLION, OR 75.4% OF 
FUJIANS EXPORTS.  NEW MARKETS FOR FUJIANS EXPORTS, SUCH AS 
SWITZERLAND, RUSSIA, INDIA, ROMANIA, AND BRAZIL TOOK AN 
INCREASING SHARE OF THE PROVINCE'S EXPORTS. 
 
¶18. (U) IN A PRICE-STABLE MARKET, FUJIAN RESIDENTS' INCOME 
SAW DOUBLE DIGIT GROWTH, WITH URBAN RESIDENTS EARNING AN 
 
AVERAGE OF RMB 4,122.62 (USD 512.23) AND RURAL RESIDENTS RMB 
1,315.12 (USD 163.40) IN THE FIRST QUARTER. 
 
HAINAN 
------ 
 
¶19. (U) IN THE FIRST QUARTER, HAINAN'S GDP REACHED RMB 
21.671 BILLION (USD 2.69 BILLION), UP 11.7%, OR 3.2 
PERCENTAGE POINTS HIGHER THAN THE SAME PERIOD OF LAST YEAR. 
THE ADDED VALUE OF THE PRIMARY, SECONDARY AND TERTIARY 
SECTORS WAS RMB 6.604 BILLION (USD 820.54 MILLION), RMB 
5.447 (USD 676.78 MILLION) AND RMB 9.62 (USD 1.20 BILLION) 
RESPECTIVELY, UP 8.5%, 17.4% AND 10.9%. 
 
¶20. (U) FIXED ASSET INVESTMENTS TOTALED RMB 6.463 BILLION 
(USD 803.02 MILLION), UP 19.5%.  URBAN REGIONS CLAIMED RMB 
6.136 BILLION (USD 762.39 MILLION) OF THESE INVESTMENTS, 
WHILE RURAL REGIONS RMB 328 MILLION (USD 40.75 MILLION), UP 
19.5% AND 20.7% RESPECTIVELY.  IN THE URBAN AREAS, RMB 89 
MILLION (USD 11.06 MILLION) WAS INVESTED IN THE PRIMARY 
SECTOR, DOWN 28.0%; RMB 2.588 BILLION (USD 321.55 MILLION) 
IN THE SECONDARY SECTOR, UP 8.6%; AND RMB 3.459 BILLION (USD 
429.77 MILLION) IN THE TERTIARY SECTOR, UP 31.6%. 
 
21 (U) RETAIL SALES TOTALED RMB 7.538 BILLION (USD 936.58 
MILLION), UP 13.7%.  RETAIL SALES IN URBAN REGIONS WERE RMB 
5.999 BILLION (USD 745.36 MILLION) AND RMB 1.539 BILLION 
(USD 191.22 MILLION) IN RURAL AREAS, UP 14.4% AND 10.8% 
RESPECTIVELY. 
 
¶22. (U) RESIDENTS INCOME CONTINUED TO GROW.  THE PER CAPITA 
DISPOSABLE INCOME OF URBAN RESIDENTS REACHED RMB 2,924 (USD 
366.30) AND RURAL RESIDENTS RMB 947 (USD 117.66), UP 17.9% 
AND 7.7% RESPECTIVELY. 
 
¶23. (U) THE PROVINCE'S FOREIGN TRADE VOLUME REACHED USD 
651.39 MILLION, UP 18.86%.  EXPORTS WERE VALUED AT USD 
312.75 MILLION, WHILE IMPORTS WERE VALUED AT USD 338.64 
MILLION, UP 54.4% AND DOWN 2% RESPECTIVELY.  HAINAN'S 
EXPORTS TO THE U.S. REACHED USD 60.65 MILLION, UP 151.9%, 
AND TO JAPAN USD 25.53 MILLION, UP 4.2%.  GROWTH AMONG 
HAINAN'S EXPORTED PRODUCTS INCLUDED MACHINERY (USD 102.73 
MILLION), UP 259%; TEXTILES (USD 39.34 MILLION), UP 3.91%; 
AQUATIC PRODUCTS (USD 30.32 MILLION), UP 66.23%; AND 
FURNITURE (USD 12.39 MILLION), UP 6.99%. 
 
MARTIN