Haikou Emerges from Economic Bubble with Growth Forecast

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Last updated at: (Beijing Time) Sunday, March 30, 2003

Haikou Emerges from Economic Bubble with Growth Forecast

Haikou, capital of south China's island province of Hainan, has set an average annual economic growth rate of 13 percent for the next five years.

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Haikou, capital of south China's island province of Hainan, has set an average annual economic growth rate of 13 percent for the next five years.

By 2007, the city's gross domestic product (GDP) is expected tohit 43.5 billion yuan (5.24 billion US dollars), said Wang Fuyu, secretary of Haikou city committee of the Communist Party of China,at a recent meeting.

Economic development in Haikou has been adversely affected by an economic bubble inflated by a real estate development boom in the 1990s.

The city's GDP growth, which ran as high as 83.8 percent in 1992, had fallen to one percent by 1995. The city government and Party authorities have carried out economic reforms to squeeze thebubble since 1996.

The city has encouraged bold reforms in the capital structure and management of state-owned industrial enterprises. By 1998, the city's ailing industrial sector began to report profits.

The city has also made efforts to adjust the structure of ownership and non-public businesses now account for half of the city's gross economic volume.

Thanks to the reforms, Haikou's economy has been recovering. In the past five years, the city experienced an average growth of 10.1 percent in GDP and an annual rise of 12.3 percent in its revenues.

Haikou also registered 1.86 billion US dollars of overseas investment and 3.8 billion US dollars in foreign trade in the pastfive years.

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