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EuCham urges high-tech transition of economy in Guangdong

2015-July-3       Source: Newsgd.com

European Chamber South China Chapter launched an event to mark the publication of South China Position Paper 2015/2016.

Alberto Vettoretti, Chairman of European Chamber South China Chapter delivered a keynote speech on July 2 on the launch event of South China Position Paper 2015/2016. (Photo/Newsgd.com)

"Guangdong has been a victim of its own success and excess, having benefited from a sheer endless influx of cheap migrant workers from all across China and an effective albeit increasingly disrupted supply chain within the region." Alberto Vettoretti, Chairman of European Chamber South China Chapter expressed his concern in his keynote speech on July 2 on the launch event of South China Position Paper 2015/2016.

Faced with rising labour costs and intense global competition for investment, particularly Guangdong, wide known as the ‘world's factory' is currently remodeling its regional economy from one based on traditional, labor-intensive manufacturing to one based on high-tech industries. "It (Guangdong) now needs to reinvent itself in order to face up to the many challenges of the 21st century. Being a low-cost production hub has to give way to bing a future-proof economy based around smart manufacturing, harnessing the local talent of an area with a local economy larger than Indonesia's."

According to the paper, the number of South China companies shifting investments from China to other markets has increased by 17 points from last year to 24% in 2015.

Improving the three flows

In his keynote speech, Mr. Vettoretti suggested improving 'Three Flows' for South China move forward: the flow of people, the flow of goods and services and the flow of information.

The flow of people suggests lowering the barriers and improving overall labor market conditions; The flow of goods and services recommends improving communication with and coordination by custom; The flow of information urges the increasing Internet speed and guarantee a free flow of commercially relevant information.

The hope of FTZ

Regarding the newly approved Guangdong Free Trade Zone (FTZ), the South China Position Paper 2015/2016 also commented that the FTZ will hopefully help to increase the regions's global standing and promote further integration between Guangdong, Hong Kong and Macau, but considering the realities of today's markets, this initiative could be "too little too late" if the potential the FTZ is not carefully leveraged.

Mr. Vettoretti said the FTZ "will arguably have to play a part in this - providing for uneven greater integration of South China's manufacturing belt with Hong Kong's financial infrastructure and all major export markets via the world's sea and land lanes."

About the South China Position paper 2015/2016

The European Chamber started incorporating local position papers into main lobbying publication, the European Business in China - Position Paper, in 2010. The European Business in China - South China Position Paper 2015/2016 is the third in a series of standalone local Position Papers -- following on from Shanghai and Beijing -- that the European CHamber has been releasing over th ecourse of the first half of 2015. The series of local Position Papers is set to be continued with the European Chamber chapters in Nanjing, Shenyang, Southwest China and Tianjin to follow suit over the remainder 2015.

Click here to see the full paper

Editor: Chan

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