Saturday 20 December 2008

Dongguan May Shift Priority from Hi-Tech Hub Plan

Authorities in Dongguan, possibly the mainland city worst hit by the financial crisis, have apparently shelved long-standing ambitions to be a hi-tech hub after the State Council released Pearl River Delta regional development guidelines.

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Guanyu said...

Dongguan May Shift Priority from Hi-Tech Hub Plan

He Huifeng
20 December 2008

Authorities in Dongguan, possibly the mainland city worst hit by the financial crisis, have apparently shelved long-standing ambitions to be a hi-tech hub after the State Council released Pearl River Delta regional development guidelines.

Dongguan Communist Party chief Liu Zhigeng said the city would benefit greatly from the new guidelines, which lifted the delta to a level of national strategic importance, the Nanfang Daily reported yesterday.

In a reworking of the city’s development plan, Dongguan would strive to be a modern manufacturing base focusing on the electronics industry, Mr. Liu said. It was an ideal city for innovation and entrepreneurship and a rising delta port, he said.

He insisted that Dongguan had several advantages in that mission, such as its central location in the delta, a complete industrial chain for electronics and clothes, and efficient government services.

But Mr. Liu left out plans to transform Dongguan into a hi-tech industrial base by shifting away from labour-intensive enterprises. In the past couple of years, Guangdong authorities at all levels have made high-profile mentions of the move towards hi-tech businesses to distinguish the area from low-cost-labour countries such as Vietnam.

With roughly 70 per cent of its gross domestic product coming from export-oriented businesses, Dongguan has been hit hard by the global financial crisis and the sharp drops in consumption in developed nations.

Tens of thousands of factories in the manufacturing hub closed down and laid off staff this year.

According to official statistics, Dongguan’s exports between January and November grew just 9.3 per cent compared with the same period last year - a 16.6 percentage point drop in the growth rate. A further decline is expected next year.

Feng Xiaoyun, an economics professor at Jinan University in Guangzhou, said the most urgent task for the Dongguan government was to help businesses survive the global meltdown.

“The government should understand the situation and put the brakes on its drive to upgrade the industrial economy,” Professor Feng said. “The top priority is survival and saving all companies in difficulty caused by the terrible economic situation overseas.”

She said she had never agreed with the policy of moving out all labour-intensive factories and luring only hi-tech and innovation-based ones.

“That’s a fancy idea for Dongguan’s situation,” she said. “Dongguan’s future should still be as a world manufacturing base with various industry chains and skilled workers. That will more practical and helpful for the city.”