Shenzhen, which once led the mainland in attracting foreign investment, is losing its appeal, members of the Shenzhen People's Congress Standing Committee have been told.
Part of the problem is power shortages which have grown into a year-round, city-wide problem, the government says. Another is water shortages. But a lack of land is the biggest issue, it says in a report to the standing committee.
The report says that, although contracted foreign investment - a rough indication of the future inflow of foreign capital - grew by 21.7 per cent year on year in the January-June period, actual foreign investment fell by 21.9 per cent year on year, amounting to only US$1.16 billion.
While the report still described Shenzhen's economy as 'healthy', it admitted the city faced four serious challenges: problems in the supply of water, electricity and transport; a fall in fixed-asset investment; contraction of foreign investment; and a decline in exports.
The report estimated that demand for electricity would reach 6.8 million megawatts this year, up 1 million mW from last year. It said demand significantly outstripped supply, but did not give details.
'Power shortages are no longer a seasonal but a year-round problem. It is no longer a local or district phenomenon but a city-wide problem,' the report said.
It said Shenzhen's shortage of land was the main reason behind the fall in foreign investment.