Low forecast reflects local authority's determination to change economic growth model, expert says

Guangdong province, a longtime economic and export powerhouse in southern China, expects its total trade to expand only 1 percent in 2014, a government work report revealed on Thursday.

The report, which cited uncertain global demand and the province's efforts to develop a new economic growth model, was delivered by Guangdong Governor Zhu Xiaodan at the opening of the annual local legislative session.

"We will make more efforts to balance trade, consumption and investment to realize a healthy economic development model," Zhu told deputies to the annual Guangdong provincial people's congress, which opened in Guangzhou, the capital of Guangdong.

The trade growth target is far lower than the actual figure for 2013, when Guangdong's total trade expanded 10.9 percent to exceed $1 trillion.

"We have made more efforts to transform and optimize the foreign trade and economic structure in the past few years to ensure stable trade growth," said Zhu.

According to Zhu, exports of new and high-technology products, as well as the service trade, grew quickly in 2013.

Years of efforts to transform the province's trade structure paid off, with exports of original design manufacturing and original brand manufacturing products accounting for 63 percent of the total last year, according to Zhu.

"The increased exports of such products signaled that the production method for traditional processing and trade businesses has been optimized," said Feng Shengping, a senior researcher with the Guangdong Provincial Situation Research Center.

As of Dec 31, more than 7,500 companies in Guangdong that previously carried out processing trade had transformed into ODM and OBM exporters, according to Guangdong Customs.

Lin Jiang, a professor at Sun Yat-sen University, said Guangdong's low trade growth goal for 2014 represented the local authority's determination to change its economic growth model.

"It signals that Guangdong will no longer rely heavily on trade to maintain economic growth," Lin told China Daily.

"Given the global economic and trade situation, the province should change its economic growth model. Setting a lower trade growth target means that Guangdong has to develop new economic growth engines to sustain its leading role in the country's economy," Lin said.

According to the government work report, Guangdong authorities will strive to expand domestic consumption demand by promoting Guangdong's products across the country.

The province will also accelerate construction of commerce and trade centers and international purchasing towns outside Guangdong. Those steps will help build a domestic sales network to promote products made in the province, according to the report.

Guangdong will also continue to "optimize" investment, according to the report.

In 2014, the local authorities will start construction of 285 key investment projects valued at 450 billion yuan ($74.3 billion), according to the report.

"The report sends a strong signal that Guangdong will rely more on consumption and investment to change its economic growth model and boost its economic development," Lin said.

However, Lin said that actual trade growth this year would exceed the 1 percent goal, given that the province remains the nation's trade leader, with more than one-fourth of total exports and imports.

"A growing number of exporters in Guangdong have become more confident about overseas markets, especially emerging countries and regions that are demanding more Chinese products," Lin said.