Known as a pioneer in China's reform and opening-up, Guangdong province will invest more than 50 billion RMB in the next five years to implement a new labor and industry strategy, known as "Double Transfers", to maintain sustainable development and maintain a foothold in the mainland economy.

The strategy transfers labor-intensive industries from the Pearl River Delta (PRD) to less developed regions of the province. Workers from less developed areas will be encouraged to work in local manufacturing and service industries, or find employment in the Pearl River Delta.

"The 'double transfers' system will be the most effective measure to solve the problems and carry out a new round of development,” said Guangdong Governor Huang Huahua.

According to the strategy, from 2008-2012 the province will invest more than 50 billion RMB to support the less developed regions in infrastructure construction, industry clusters transferring, key industry development and skills training. About 500 million RMB awards will be provided annually encouraging enterprises to transfer to the less development regions.

Guangdong needs new strategy

"Guangdong is at a jumping off point of new development phase," said Governor Huang in a working conference to boost the new labor and industry strategy held in Guangzhou on May 29. In the 1980s and 90s, Guangdong built its success on labor-intensive original equipment manufacturing and lead China in GDP growth for the past 18 years. But statistics show that its traditional industrial model is outdated and many other regions on the mainland have now caught up with and even surpassed Guangdong’s economic growth.

In terms of per capita GDP, Guangdong is the slowest among the country’s east-coast provinces. Economic growth within the province is also unbalanced. Last year, the per capita GDP within the Pearl River Delta region exceed 7,000 USD but only 1,800 USD in the western and eastern areas and 1,600 USD in northern mountainous area.

Experts warn the province is facing tough challenges to sustainable development. Environment pollution, huge population and limited resources are putting pressure on the province. Occupying 1.87 percent of the country’s land, the province bears the country’s 9.8 percent industrial effluent and 4.1 percent discharge gas. Guangdong’s population is also approaching 100 million and is expected to rank first in the country this year.

A requirement of industry upgrade

The province has paid great attention to upgrade the province’s industry growth pattern and sharp its competitiveness edge in recent years. In fact, Guangdong started the research in how to promote the industry and labor transfer in four years ago. At present, 24 industry transfer clusters has built up.

Problems showed up in the way of reform. From Last year, series of reports about foreign-funded enterprises moved out of Guangdong province attracted people’s attention. In fact, most of them are small and medium-sized labor intensive enterprises, who are suffering rising labor and environmental costs, and have been forced to make an upgrade or go where labor is cheaper. The new labor law, the appreciating Yuan and tighter rules on the protection of intellectual property rights are all forcing companies to change their working methods and focus much more on technology and innovation.

Experiences from the developed countries proved that this phenomenon is normal outcome in the progress of industry upgrade. Government has take measures to such firms to help them adapt to the policy changes. Besides, Guangdong's business owners must change their conservative working style, reform their management skills and update their production processes, if they are to keep pace with industry trends.

With its solid economic foundation, built up over the past two decades, Guangdong's industrial sector can overcome all these difficulties.

By 2010, the province is expected to complete the industry transfer clusters and add one or two new ones in the less development regions, and also transfer 6 million migrant workers, to lower the portion of labor-intensive industry in PRD region, and push its Per capita GDP growth 2 percent higher than the growth rate of GDP.

Experts consider the new strategy is a break through to achieve sustainable development in Guangdong.

Editor: Yan