Business / Economy

C China holds key to economic growth

By Li Jiabao and Feng Zhiwei in Changsha (China Daily) Updated: 2012-05-19 09:24

The development of Central China will be a pillar of the nation's economic growth amid the slowly recovering global economy and China's cooling GDP expansion, with key industries such as agriculture, energy and machinery being promoted, officials said on Friday.

"The development of the central region has become an important factor supporting China's economic growth and is closely related to the transformation of the country's economic growth pattern and the adjustment of its economic structure," Vice-Premier Wang Qishan, told the Expo Central China 2012 in Changsha, Hunan province.

The three-day expo, which opened on Friday, is jointly held by Hunan, Hubei, Jiangxi, Anhui, Henan and Shanxi provinces, which account for one-fourth of China's population or one-fifth of the nation's GDP

"As the global economic outlook is still challenging, China will ... further open up the central provinces to embrace industries shifting from coastal areas or overseas," Wang said.

China's exports slightly expanded 6.9 percent year-on-year in the first four months while exports from the central region registered a year-on-year surge of 23.6 percent in the same period, according to the Ministry of Commerce.

Commerce Minister Chen Deming called for further opening-up to boost development and innovation in the region.

"Further opening-up (of the Chinese economy) will be an effective way to combat the spreading financial crisis while contributing to world economic growth," he added.

After six years, the expo has become a major platform for the region to further open up and increase regional as well as international exchanges, Chen said.

Increased foreign direct investment in the region will also enhance its role in China's economic growth, according to Deputy Commerce Minister Wang Chao.

Foreign direct investment in the region rose 26.7 percent year-on-year in the first four months while China's total FDI in the first four months dropped 2.38 percent year-on-year, according to Wang.

"Foreign direct investment is and will remain a major force in China's economic growth. As China remains a top destination for FDI, its fast-growing central region, mainly driven by rising labor costs in coastal areas, will attract more foreign investment. More foreign investment will go to services industries in order to tap the expanding domestic market," said Peter Jennings Buckley, director of the Center for International Business at the University of Leeds.

Christian Murck, president of the American Chamber of Commerce in China, said FDI is already growing at a rapid pace in the region and US investment in China will increase this year, but is shifting from coastal areas to the central and western regions to meet the demands of domestic consumers.

Shuichi Koseki, president and CEO of Itochu East Asia, said that Japanese investment in China this year continues to grow rapidly after a year-on-year expansion of more than 50 percent last year.

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