Guangdong has approved 23 new industrial parks in its eastern, western and northern regions, and its manufacturing industries have strong potential to develop.

Guangdong-based researchers have proposed to create a free-trade area among the southern mainland province, Hong Kong and Macao to strengthen regional cooperation.

Enhanced cooperation would be of great significance to the regional economy, according to Tan Chenglin, a senior researcher with the Guangdong Provincial Situation Study and Research Center.

The mainland has approved several experimental zones for reform and opening up in Shanghai, Tianjin, Chongqing, Chengdu, Wuhan, Changsha, Zhuzhou and Xiangtan since 2005, all in efforts to beef up its reforming process.

In noting that Hong Kong, Macao and Guangdong have worked together for 30 years, Tan said a new experimental zone in Guangdong, Hong Kong and Macao will further enhance traditional cooperative industries.

"Setting up the free-trade area, as part of efforts to establish a new experimental zone between the three areas, will help China become more active in international economic and trade cooperation, as Hong Kong and Macao have become two of the internationally influential port cities," Tan said.

He was speaking after the unveiling of a survey on economic cooperation between the three areas on Monday.

Tan also said traditional cooperative industries, such as the tens of thousands of processing trade projects backed by Hong Kong and Macao, have to be upgraded.

Tan said that traditional cooperative industries at the lower end of the value chain cannot adapt to the current industrial and trade development in Guangdong.

As a result, Tan urged the three sides to move up the value chain by focusing on service and hi-tech industries.

In another development, the Guangdong provincial government has called upon Hong Kong-invested firms to move their manufacturing businesses to some mountainous cities because of relatively lower labor and production costs there.

"We are not kicking them out of Guangdong," said Wang Tao, director of the processing and trade office of the Guangdong Department of Foreign Economic and Trade, in response to news reports saying that the Guangdong government had planned to shut the doors on tens of thousands of overseas firms amid the province's transformation from a manufacturing hub into a service economy.

That included firms from Hong Kong, which were associated with low-value products and heavily polluting manufacturing.

"Instead, we are helping them upgrade businesses by strengthening research-and-development facilities and encouraging them to move to the eastern, western and northern mountainous areas in Guangdong because of lower labor and production costs there," Wang told China Daily.

As of April, about 101,400 Hong Kong-invested firms, most of which are involved in the processing trade industry, had registered in Guangdong. They account for more than $122 billion in foreign direct investments (FDIs).

Last year alone, Guangdong introduced more than $8 billion in FDIs from Hong Kong, which has become the largest overseas investor in the southern mainland province.

According to Wang, Guangdong approved as many as 23 new industrial parks in its eastern, western and northern regions - which had been left behind in economic development - to host more manufacturing businesses.

Liang Yaowen, the department's director, spoke at the Guangdong-Hong Kong Economic and Trade Fair in Hong Kong last week. He said the province had issued preferential policies to encourage Hong Kong-invested processing and trade factories to better upgrade their industries.

"We will soon set up centers for research and development, and design and procurement, to help Hong Kong firms extend industrial chains," Liang said.

According to Liang, both sides are also pushing for the establishment of a team to help in the relocation of Hong Kong-invested industries in the Pearl River Delta region.

Editor: Yan