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Cablegate: Guangxi Zhuang Autonomous Region Q3 Economic

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RR RUEHCN RUEHGH RUEHVC
DE RUEHGZ #2402/01 3490805
ZNR UUUUU ZZH
R 150805Z DEC 06
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 5575
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUCPDOC/USDOC WASHDC
RUEHRC/USDA FAS WASHDC 0925
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHDC
RUEKJCS/DIA WASHDC
RHHMUNA/HQ USPACOM HONOLULU HI

UNCLAS SECTION 01 OF 02 GUANGZHOU 032402

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: Guangxi Zhuang Autonomous Region Q3 Economic
Report

1. (U) SUMMARY: Guangxi's gross domestic product (GDP)
growth reached a record high 13.1% in the third quarter (Q3)
of 2006. The Statistics Bureau again characterized
Guangxi's economic development as "fast and steady" despite
government control measures. The secondary and tertiary
sectors experienced significant growth. Fixed asset
investments increased but not as quickly as the first two
quarters. Inflation remained low. Foreign trade,
particularly with ASEAN countries, was strong. Residents'
income continued double-digit growth. Guangxi will likely
achieve 12% GDP growth in 2006. END SUMMARY.

GUANGXI FAST FACTS
------------------

GDP, billion USD 38.3 (up 13.1%)
Imports, billion USD 2.2 (up 30.6%)
Exports, billion USD 2.5 (up 21.1%)
Fixed-asset investment, billion USD 17.6 (up 28.6%)
Consumer Price Index 101 (up 1%)
Disposable income per capita (urban),USD 935 (up 10%)
Disposable income per capita (rural),USD 290 (up 12.3%)

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2. (U) Percentages in parenthesis represent growth compared
to the same period in 2005 (according to the Guangxi
Statistics Bureau). All currency conversions in this
report are made at the average exchange rate of USD 1 = RMB
8.0071.

3. (U) In the first three quarters, Guangxi's GDP amounted
to RMB 306.61 billion (USD 38.3 billion), up 13.1% from the
same period of last year, or 1.1 percentage points higher
than the growth rate of the same period last year. Guangxi
has sustained GDP growth above 11% for the last 12 quarters.
The value-added of the three sectors was:

Primary sector RMB 50.75 billion (USD 6.3 billion)
Secondary sector RMB 129.32 billion (USD 16.2 billion)
Tertiary sector RMB 126.55 billion (USD 15.8 billion)

This represents an increase of 6.1%, 18% and 11.4%
respectively; the sectors' share in GDP growth was 8.3%,
53.9% and 37.8% respectively.

INDUSTRIAL PRODUCTION
---------------------

4. (U) Industrial production is the driving force of
Guangxi's economy growth. The value-added of industrial
production was up 18.9%, or 2.8 percentage points higher
than the growth rate during the same period last year. The
value-added of industrial enterprises with annual sales
revenue of RMB 5 million (USD 624,000) or more (enterprises
"above designated size," according to the Statistics Bureau)
was up by 23.1%, or 2.1 percentage points higher year-on-
year. The profit made by these enterprises totaled RMB
13.23 billion (USD 1.7 billion), up 37.5%. Industrial
production contributed to 49.1% of GDP.

TOURISM
-------

5. (U) Guangxi attracted 1.227 million foreign tourists in
the first nine months of 2006, bringing in RMB 2.17 billion
in revenue (USD 270.6 million), up 18.8% year-on-year.

FIXED ASSET INVESTMENT
----------------------

6. (U) Fixed asset investment in the first three quarters
of 2006 reached RMB 141.24 billion (USD 17.6 billion), up
28.59% year-on-year. The Statistics Bureau reported that
these investments contributed over 70% to GDP growth.

FOREIGN TRADE
-------------

7. (U) Guangxi's foreign trade volume amounted to USD 4.7

GUANGZHOU 00032402 002 OF 002


billion, up 25.4% year-on-year. Of this total, exports
accounted for USD 2.5 billion, up 21.1%; imports reached
USD 2.2 billion, up 30.6%; the trade surplus reached USD
280 million.

-- ASEAN countries continue to be Guangxi's primary trading
partners. Exports to ASEAN countries reached USD 690
million, up 21.8%.

-- Private enterprises are a major force in Guangxi's
foreign trade. Among the top 50 enterprises with more than
USD 10 million in exports, 17 are private enterprises.
Exports from private enterprises amounted to USD 1 billion,
up 36.1%.

-- Major exports: mechanical and electrical products,
textile and agricultural products.

-- Major imports: industrial raw materials and agricultural
products. Imported fruit increased by 84.2%, coal imports
increased by 4.5 times, imported ore increased by 27.6%,
imported timber increased by 83.2%, and imported rubber
increased by 97.1.

RESIDENTS' INCOME
-----------------

8. (U) Residents' income rose steadily. Urban residents'
per capita disposable income reached RMB 7,486.9 (USD 935),
up 10%. Rural residents' per capita cash income reached
2,323.8 (USD 290.2), up 12.3%.

PROBLEMS IDENTIFIED
-------------------

9. (U) Guangxi's Statistics Bureau identified the following
main problems affecting the Region's economic performance -
less investment, widening price scissors for industrial
products, a decline in the industrial products market, and
decreasing commercial housing sales.

PREDICTIONS FOR YEAR END 2006
-----------------------------

10. (U) The Guangxi Statistics Bureau predicted that GDP
growth in the fourth quarter will reach RMB 168 billion
(USD 21 billion), up 10.5%, resulting in year end GDP
growth of 12%. The Region will focus on construction
projects, industrial production, and foreign investment in
the fourth quarter.

GOLDBERG

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