The governor of Guangdong sees a sliver of hope in the economic downturn.
Gross domestic product (GDP) in the province, the country's largest contributor to the economy and trade, slowed to 5.5 percent in the first quarter of this year down from 10.5 percent on 2008.
The numbers were, however, a slight increase on the 5-percent growth experienced during the first two months of the year.
"Industrial output and domestic and foreign investment have also seen slight increases in the first quarter," said Guangdong governor Huang Huahua at a government work meeting. He said the low economic growth in the first quarter had led to worries over meeting this year's target of 8.5 percent GDP growth.
The province's average annual economic growth from 1979 to 2007 was 13.8 percent, provincial statistics showed.
"The economic situation may worsen since the global financial crisis hasn't reached rock bottom. If we don't work harder, we may fail to realize this year's GDP goal," Huang said.
The province's imports and exports fell 22.9 percent in the three-month period, Huang said.
The situation was worse in Dongguan, internationally known as a leading manufacturing hub in the prosperous Pearl River Delta region, with a year-on-year decline of 2.5 percent in the first quarter.
"The province's economy has been hard hit by plummeting trade," said Lin Jian, a professor at the Sun Yat-sen University and a consultant to the Dongguan government.
"We can't tell yet if the province is in an economic recession, given there are some good signs after the first quarter," Lin said.
"But if the economy continues to decline by the middle of this year, we could say the province is experiencing an economic recession."
Foshan and Guangzhou, two other big contributors to the province's economy, were in comparatively better shape, with increases of 11 and 8 percent respectively in the first quarter.
Also, economic growth of five cities in the Pearl River Delta region, including Guangzhou, Foshan, Zhaoqing, Huizhou and Jiangmen, were higher than the provincial average, the Guangdong statistics authority said.
Peng Peng, a researcher with the Guangzhou Academy of Social Sciences, said the province should boost domestic consumption to overcome slumping foreign trade.
"But it will be difficult for the province, which relies heavily on foreign trade for economic growth. After all, only through a sharp increase in trade in the near future can Guangdong's economy recover," Peng said.
Source: China Daily