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Beijing’s Economy Soared in 2004

Beijing achieved its highest growth rate in ten years in 2004.

With a total value of 428.33 billion yuan (US$51.75 billion), the municipality celebrated the Chinese Lunar New Year knowing that its gross domestic product (GDP) had grown by 13.2 percent, according to the Beijing Municipal Bureau of Statistics.

The measure of the city's performance was announced at a meeting of Beijing Municipal Government officials, who examined Beijing's economic activities during 2004.

Mayor Wang Qishan said the government would continue restructuring local industrial establishments, with a priority assigned to service sector development in 2005. He said the city would also promote modern manufacturing expansion.

Local governmental revenues increased by 28.3 percent to 83 billion yuan (US$1 billion), and government expenditures rose to 97 billion yuan (US$1.17 billion), up 20.4 percent over 2003.

Disposable per capita incomes for Beijing's urban residents averaged 15,637.8 yuan (US$1,889), a nominal increase of 12.6 percent year-on-year (in real terms an increase of 11.5 percent). Per capita incomes for rural residents averaged at 7,172 yuan (US$867), up 10.4 percent.

Beijing's service sector generated the bulk of the municipal government's revenue, according to the Beijing Municipal Bureau of Statistics. The sector grew by 11.6 percent during 2004, compared with 1.9 percent for agriculture (China's "first industry") and by 16.7 percent in manufacturing (second industry). The service (tertiary industry) sector generated 257 billion yuan (US$31.05 billion) in added value in 2004 and was thus responsible for 52.6 percent of the city's economic growth and 60 percent of its GDP.

Industrial production improved, according to a news release obtained after the meeting, led by large- and medium-sized industrial enterprises that were capable of generating 75 billion yuan or more in added value.

Agriculture became more market-oriented following a restructuring of the agricultural product-mix. The city's output of summer grain increased by 20.9 percent to 702,000 tons.

Fixed-assets investments were 17.2 percent higher in 2004 than in 2003 and were valued at 252.8 billion yuan (US$30.54 billion). A total of 147.3 billion yuan (US$17.8 billion) was invested in real estate development, representing a one-year increase of 22.5 percent, 5.3 percentage points greater than for the city's total fixed-asset investments.

Retail volume was valued at 219.2 billion yuan (US$26.5 billion) for 2004, reflecting a nominal increase of 14.4 percent year-on-year. Auto sales grew by 9.8 percent with 447,000 sold, including 304,000 new models. The city's caterers had a good year with 56.6 percent growth on revenues of 19 billion yuan (US$2.32 billion).

The value of the foreign trade of local companies was set at US$94.66 billion (about 783.45 billion yuan), up 38.2 percent year-on-year. Imports increased by 21.8 percent to US$20.57 billion (170.3 billion yuan). A total of 1,806 foreign-invested projects won approval to operate in the city in 2004. Foreign direct contracted values were US$6.26 billion (51.8 billion yuan), and real foreign direct investment was reported to be US$3.08 billion (25.5 billion yuan), up 92 percent and 43 percent year-on-year. A more rational distribution of foreign investment was evident, with 33 percent going to the manufacturing industry, 7.7 percent more than the previous year. The tertiary sector accounted for 68 percent of the projects. They were joined by computer services, information consulting, software, other.

Beijing and Hong Kong signed a Closer Economic Partnership Arrangement (CEPA) with goals of rejuvenating Hong Kong's economy and increasing the two cities' common prosperity. When it came into effect on January 1, 2004, the arrangement stated that "restrictions on equity ratios will be lifted and thresholds on registered capital and technical qualifications lowered" in 18 sectors.

EGL Eagle Global Logistics (Beijing) Limited was the first logistical enterprise from Beijing established in Hong Kong and Wako Express (China) Company Limited was the first Hong Kong logistics agency in Beijing. Gulliver's Travel Agency, which has already completed all procedures, was officially funded on August 25, 2004, becoming the first Hong Kong travel agency in Beijing. Hong Kong's first advertising agency, retailers, architectural design company and corporate cinema operation were established in 2004.

The local tourist industry continued to recover, with visitors from outside China reaching 3.16 million, 70.4 percent more than the previous year.