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Services seen as crucial to Guangdong economy

By Cai Cai (China Daily)
Updated: 2008-11-12 15:42

Guangdong province has recently outlined a new development plan for the service sector, vowing it will be given top priority as the provincial government expects it to play a significant role in further economic growth.

According to the ambitious development plan, the service industry in Guangdong will account for more than 45 percent of revenues in 2010, more than 50 percent in 2012 and 60 percent in 2020.

The sector is projected to employ more than 40 percent of the province's workforce by 2010, according to local statistics.

Last year Guangdong's industrial output totaled 1.2 trillion yuan ($176 billion), compared with 475.5 billion yuan in 2000.

Governor Huang Huahua said he hopes the service industry will improve the province's economic structure and support Guangdong's manufacturing sector and exports.

With a large number of heavyweight offshore companies establishing production facilities in Guangdong, the province is said to have become a "factory of the world".

Huang is also expecting to build his province into a regional center of services, logistics, finance, trade and transportation industries.

He urged for further cooperation with Hong Kong and Macao in boosting Guangdong's service industry development while making efforts to attract foreign investment.

Neighboring Hong Kong and Macao, where the service industry is already well-developed, are important international trade hubs and financial centers.

"The two Chinese special administrative regions have advanced information channels and management systems of international standard in service industry that would certainly help Guangdong speed up the development of its service industry," Huang told a work conference on Guangdong's service development in Guangzhou, capital of the province, early this year.

The provincial government has listed the service industries in information, finance, technology support and culture as promising in the coming five years. The government will also try to improve the management of service and the consumer market in the near future, he added.

Guangdong has already become a popular investment location for Hong Kong's service industry. Over 40 percent of firms opened by Hong Kong suppliers on the mainland are in the province.

In addition Hong Kong's service industry has taken neighboring Guangdong province as a business locale because of its strategic location, low cost and benefits from the 2002 Hong Kong-mainland Closer Economic Partnership Arrangement (CEPA).