Diaoyu disputes hit Guangzhou economy as auto sector struggles

The auto output in Guangzhou city, a main production base for Japanese cars in South China's Guangdong Province, saw a big drop in 2012 due to the Diaoyu disputes, news portal www.chinanews.com reported Wednesday, citing officials.

Auto output in the city declined by 6.3 percent in 2012, as vehicle production dropped by 30 billion yuan ($4.82 billion) and the output value of the industry chain fell by 45 billion yuan, Wang Xudong, director of the Guangzhou Economic and Trade Commission, said at a press conference of the Guangzhou Municipal People's Congress Tuesday.

The decline has caused tax income from local industries to drop by 3 percent, reducing the city's overall tax income by 1 percent, Wang noted.

Guangzhou is home to Guangzhou Honda, GAC Toyota, and Dongfeng Nissan.

However, Wang said the situation is improving, considering the auto production performance in January this year.

If things go well, Guagzhou's auto output is expected to grow more than 10 percent this year, with vehicle production volume topping 1.6 million units and an output value over 300 billion yuan, Wang said.

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