The Yangtze River Delta region, bedrock of China's economic powerhouses including Shanghai Municipality, and Jiangsu and Zhejiang provinces, is considered to be China's most important economic driver. However, statistics show that the region's growth is slowing down.
According to statistics from the Shanghai Municipal Bureau of Statistics, although main economic indices were higher in this region than the national average, questions surround why growth rates have slowed down; questions that cannot be ignored.
The region has been experiencing a slowdown in the growth of gross value and profit of industrial products. Sixteen cities in the Delta region reported gross values of 4.466 trillion yuan (US$552.6 billion), representing an increase of only 23.1 percent. Growth rates have dropped 7.7 percentage points compared with the same period last year. Profits earned were about 207.3 million yuan (US$25.648 million), representing an increase of 3 percent for the first three quarters of 2005.
Foreign direct investment (FDI) in particular has been on a downward spiral. FDI growth rates for the first three quarters of 2005 dropped 12.2 percent from the same period last year.
Export rates continue to hover about 30 percent, but import rates have been going down.
Economic analysts believe that the region has lost some of its momentum and point to the over-enthusiasm for gross domestic product (GDP) and FDI as possible reasons for the slowdown.
In reality, GDP is only a term used in statistics. Yet, post-economic reform over the last 20 years has seen the transformation of GDP into a key indicator of officials' promotion prospects.
Similarly, FDI is also professional terminology. But when local officials realized the importance of GDP figures to their rise up the ladder, their enthusiasm for attracting foreign investment was a natural progression.
Further, the region's economy has been developed, and continues to be developed, at the expense of natural resources and the environment.
Liang Congjie, an environmentalist, said that China has become the world's manufacturer and refuse dump.
Liang asks just how many of the goods produced in China's factories are made for Chinese consumers, or how much Chinese workers actually make as part of the bigger industrial chain?
It has been suggested that local enterprise in the Delta region could do well to understand local economic aggregates, and how they can improve in terms of technological innovation, in addition to keeping a close eye on GDP and FDI figures.
(China.org.cn by Wu Nanlan November 29, 2005)
