China’s Guangxi exports majorly apparel and clothing to ASEAN states
Since the China-ASEAN Free Trade Area (CAFTA 2010) trade between China and the ASEAN states has received an important impetus, and Guangxi is functioning as a door opener to develop ASEAN markets. Guangxi shares borders with Vietnam and has traditional trade ties with many member countries of ASEAN. These are the findings of a HKTDC Research in Hong Kong
Guangxi’s major product exports are apparel and clothing (29.0 %), electronic products and parts (7.9 %), machinery and mechanical appliances (6.9 %), cotton (6.4 %), fertilisers (5.1 %) mineral fuels (4.4 %), and vehicles and parts (3.4 %).
The major import products are crude oil, mineral fuels (43.7 %), ores, slag (25.0 %), animal and vegetable fats and oils (7.2 %), edible fruits (7.0 %), rubber and article thereof (3.6 %), machinery and mechanical appliances (2.3 %), copper and articles thereof (1.8 %). All figures 2012 and the shares are calculated in terms of value.
These figures show the importance of consumer goods, garment, electronics and home appliances, and on the other hand commodities and industrial supplies.
As we all know, ASEAN’s consumer markets have been under constant development in recent years. After the financial crisis, ASEAN economies grew at a rate of 7.6 % in 2010 and 4.6 % and 2011. IMF International Monetary Fund estimates continued annual growth at a rate of 5.5 % to 5.7 % in the period of 2012-14, including a steady expansion in private consumption.
The economic growth of ASEAN countries can be had from Table 1
Guangxi’s total import/export trade increased more than 10 times from USD 2.43 billion in 2002 to USD 29.47 billion in 2012. ASEAN countries is Guangxi the major trading partner, accounting for 40.2 % of Guangxi’s overall external trade, thus the largest export market in the region. In 2012 ASEAN accounted for 60.1 % of its exports and 19.4 % of its imports. By virtue of its geographical location, Vietnam is the largest trading partner of the ASEAN counties. In 2012, Vietnam accounted for 89 % of all Guangxi export to ASEAN and 54 % of all imports from ASEAN. The total value of products exported from Guangxi as border trade (share around 47 % of Guangxi’s total exports) climbed from USD 80 million to USD 7.25 million or an increase of over 80 folds from 2000 – 2012.
Guangxi’s trade development with ASEAN is shown in Table 2
Since production costs in China are rising, some multinational companies have been decentralising their production operations by relocating more labour intensive processes and export operations to South Asian countries with lower income levels (UN report). The relocated operations include garment manufacturing, as well as assembly of components and end products of electronic/electrical devices.
The industrial production activities has increased imports in such countries for all types of industrial supplies, particularly parts and components as well as other upstream industrial products. Among the Guangxi’s exports to ASEAN countries are in addition to consumer goods lots of raw materials for garment manufacturing, such as cotton yarns and accessories, as well as batteries, other electronic parts and components for electronics manufacturing.
An interesting aspect is the development of FDI Foreign Direct investments in ASEAN countries neighbouring Guangxi, these can be had from Table 3
Guangxi has been enhancing its infrastructure and logistics because of trade and growing cargo throughput at its ports. The increase was eight times from 2000 – 2011, particularly at Beibu Gulf Ports such as Beihai (1,55 million residents), Fangchenggang (880000 residents, freight volume 2011 90.24 million or almost 60 % of all mentioned coastal ports) and Quinzhou (3.11 million residents) surged from 17.68 million t to 153.31 million t. About 80 % of the goods are transported over land, while other transportation modes such as rail, river and air account for relatively small shares.
Details can be had from Table 4
The border trade development can be had from the following Tables 5 -7
The three mentioned major sea ports handle containers, bulk cargo, vehicle roll-on, roll-off, oil bulk and ore ships and general cargo. New berths will be initiated to further increase capabilities handling containers and import-export cargo. At present, Guangxi ports offer direct routes to ASEAN countries such as Thailand (Bangkok), Vietnam (Hai Phong), Singapore and Hong Kong, Kaohsiung. As for land routes, these ports have all constructed trunk routes to Nanning, the provincial capital, including the Nanning-Qinzhou-Beihai highway and coastal highways connecting to Guangdon’s Zhanjiang, Maoming, and even to the PRD area. Nanning is traditionally an important transport and logistics centre for China’s south western markets, handling cargo distribution, transport and warehousing within the region. The port of Nanning is an inland river port along Yongjiang River, and through inland river transport, is connectable to Yunnan, Guizhou and Sichuan, as well as to Guigang and Wuzhou in Guangxi and also to Guangzhou. Nanning is also the hub of Guangxi’s road and railway networks, while its airport offers dozens of domestic flight routes and several regional and international routes, connecting to Hong Kong, Taiwan and ASEAN counties, and cities including Singapore, Kuala Lumpur, Jakarta and Ho Chi Minh City.
The government of Guangxi has pledged to dedicate major efforts in developing modern industries and nurturing several sectors with annual sales worth more than CNY 100 billion within 12th Five Year Plan (2011-15). It is aimed that by 2015 annual sales of the food industry are in excess of CNY 300 billion; car, petrochemicals, electricity, metallurgy, machinery and non-ferrous metal industries to exceed CNY 200 billion; building materials, paper-making and timber processing, electronic information and bio-industries to exceed CNY 100 billion. Other key industries include pharmaceuticals, textiles, garment, tannery, ship building and repair, as well as marine engineering equipment. The necessary measures to develop these industries are undertaken by Guangxi by boosting its logistics and transport networks in order to improve its business environment.
Details are presented in Table 8
Together with private investments in manufacturing locally, other enterprises are also lured gradually by Guangxi’s ASEAN opportunities and its relatively low production costs (labour, land) into investing in new plants in Guangxi, turning the autonomous region into a new mainland coastal base for manufacturing and processing.
Guangxi’ industrial development is pictured in Table 9