Economic growth in central and western parts of China slumps
Staff Reporter 2013-07-14 08:55
A coal company in Shaanxi province. (Photo/Xinhua)
The Chinese government has decided to boost the economy in spite of a downturn. Several provinces in the central and western parts of the country are unlikely to achieve their GDP goals this year.
In the province of Guizhou, investment in transportation and communications is the priority for local development. In order to ease operating pressures among enterprises, the provincial government has subsidized the cost of electricity for them.
During the first quarter of 2013, economic growth across China was 7.7%. Experts from 22 financial organizations in China and overseas forecast that GDP for the second quarter is likely to decrease to 7.5%.
The Guizhou government is not the only local government subsidizing businesses. The government of Baotou in the Inner Mongolia Autonomous Region has also implemented a subsidy policy for electricity costs as businesses in the area are facing a deficit and have halted production, according to China Business News.
For state-run businesses, revenue for the first five months of the year looked good with a 6.5% year-on-year growth. However, prices among sectors, such as chemical engineering, coal and cement slipped, with all these sectors posting losses.
For companies selling goods overseas, the number of orders is of paramount concern. An automobile company in Zhejiang reported full capacity during the first half of the year, due to abundant orders received at the beginning of 2013 and owing to a joint venture with American companies.
The company now plans to let its workers take unpaid leave during the second half of the year, since orders have dropped off.
According to the paper, with semi-annual financial reports set to be announced in the near future, GDP growth in the central and western provinces reflects a significant drop from a year earlier.
In spite of the bumpy situation during the first half of the year, some people in the industry still hold a positive attitude about the latter half of 2013.
One said that if there is abundant capital for businesses and infrastructure, the economic situation might turn for the better.
