Guangdong launches local stimulus plan

By Qiu Quanlin in Guangzhou (China Daily) Updated: 2014-05-29 07:42

Authorities in Guangdong province, an economic powerhouse in South China, plan to allocate a large sum of money this year to boost its economy.

According to a financial budget report submitted to a provincial legislative meeting for approval on Wednesday, the province will arrange for up to 64.7 billion yuan ($10.47 billion) to support development of infrastructure, maintain stable trade growth, expand consumption and promote the transformation of industry.

The move comes after relatively slow economic growth in the first four months of 2014.

The province's gross domestic product grew 7.2 percent year-on-year in the first quarter, or 1.3 percentage points lower than the same period last year, data from the Guangdong Provincial Statistics Bureau show.

"The economy faces pressures, and there are some uncertain factors ahead, following a tough trade situation, sluggish performance in the real estate sector and weakening demand in domestic consumption," Zeng Zhiquan, director of Guangdong Provincial Finance Department, said. "That's why we had to introduce financial measures to keep stable economic development for the whole year."

Guangdong, a longtime leader in terms of economic development in China, has a GDP growth target of 8.5 percent for 2014.

"A prompt and efficient financial policy is of great importance to adjusting the economy, given the slower economic growth of the past few months," Zeng said. There's "an urgent need for the government to introduce measures to boost the economy."

Of the budget, up to 14.8 billion yuan will come from local Treasury bonds, Zeng said.

"We expect that financial input will drive more social investment, which will help boost infrastructure development and expand domestic consumption," Zeng said.

Guangdong's fixed investment increased 17.3 percent year-on-year in the first three months, 2.2 percentage points lower than the same period last year.

Before the financial measures, the provincial government also decided to exempt 39 administrative fees for businesses from May 1.

"In such an economic situation, the exemption of administrative fees and increased financial support represented the government's determination to cope with the economic slowdown," Zeng said.