Limited resources and unsuitable industrial structures increasingly hold back the economic development of Zhejiang, said deputies from the province’s delegation at the Third Session of the 10th National People’s Congress (NPC).

Seven deputies, including the governor, mayors, entrepreneurs and scholars, held a joint press conference in Beijing on Saturday evening.

The gross domestic product (GDP) of Zhejiang ranks fourth among the 31 provinces, municipalities and autonomous regions of the Chinese mainland.

The province is also well known for its booming private economy. The GDP, foreign trade volume and fiscal revenue of Zhejiang’s private enterprises accounts for over 70, 46 and 60 percent of the total respectively.

Still, concerns linger due to the negative influence of resource shortages and an industrial structure unsuited to promoting further growth.

Governor Lu Zushan used power supply as an example: “Demand is 7 million kw/h more than supply.” The province now plans more generators, including nuclear plants, and electricity diversion projects, but they alone won’t be able to meet growing needs.

At the same time, Zhejiang’s comparative advantages to other provinces, including labor and land costs, administrative expenses and management ideas, are all diminishing.

In an attempt to maintain its lead, a series of measures are being planned.

Liu Qi, mayor of Wenzhou, said that the city will make full use of its complete industrial chains and good business environment, and promote the upgrade of its industrial structure.

“Our goal is to build Wenzhou into an advanced manufacturing base with leading enterprises, combining production, learning and research, and mass production,” said Liu.

The kinds of goods produced for export is another area where a need for change was highlighted.

Zhejiang’s economy is mainly export-oriented, and its total foreign trade volume last year was US$18.2 billion, up 30.9 percent on 2003.

However, many exports are of labor-intensive products like shoes, lighters, garments and electronic products – goods that now face more and more trade barriers in the international market.

The textile sector in Ningbo, a major port city, has an annual production value of over 30 billion yuan (US$3.6 billion), and provides 210,000 jobs. Instead of simply transferring production facilities to inland regions, many garment producers are shifting their attention to value-added ideas like brand establishment and technology content.

“We have developed a strategy to establish many famous brands in both China and overseas,” said Yu Hongyi, vice mayor of Ningbo. Many local garment producers now offer OEM (original equipment manufacturing) for world famous brands, as well as buying into foreign brands for overseas expansion.

Lu said that the current extensive economic pattern should be turned into an intensive one.

As for exports, he said the government will accelerate the change of exporting methods, optimize export structures and increase the export of hi-tech electromechanical products.

Currently, hi-tech electromechanical products only account for around 30 percent of total exports. Lu said the province will adopt macro-control measures to encourage the technological upgrade of exports instead of simply increasing their quantity.

(China.org.cn by staff reporter Tang Fuchun March 8, 2005)