-The key towards industrial sustainable development

South China's Guangdong Province is striving to transform itself from a manufacturing center into an innovative center through its new-launched innovative capacity building campaign. "This is a battle that determines the fate of Guangdong, determines the future competitive edge of this surging economic giant in the coming global competition," said Zhang Dejiang, Secretary of Guangdong Provincial CPC committee, in a working conference on enhancing Guangdong's independent innovation capacity this September.

Keeping the economic momentum
In the last two decades, Guangdong province has become a model for reform throughout the country. Guangdong is China's economic engine with an annual GDP increase of 11.25 percent, 2.6 percent more than the rest of the country.

However, there is ample concern over whether Guangdong can continue this growth. The province obtains high economic momentum by grasping a large number of labor extensive industries, which mainly depends on a large and cheap labor force as well as foreign and domestic investments. This extensive economic growth model is proving to have a high cost with decreasing productivity. The shortage of resources and energy, problems in environment and a large population has put increased pressure on the province's environmental and economic resources.

The lack of intellectual property rights also haunts Guangdong's enterprises and has become an obsession in industrial sustainable development. According to provincial statistics, 70 percent of the manufacturing industries in Guangdong lack value-added services and are relatively backwards in technological development.

"Innovation and sustainable development are now not only fashionable terms, but are also requirements," said Zhu Yaozhong, Deputy General Director of Guangdong Commission of Reform and Development. "Our only choice is to get rid of these conflicts and bring about a promising prospect."

Direction Nailed Down
A campaign was launched in September to mobilize the entire province into an innovative center. Zhang Dejiang, Secretary of the Guangdong CPC Committee, stressed that enhancing the province's independent innovation is a key point in the sustainable development of Guangdong and will influence the future of the province. "Only by enhancing the province's independent innovation ability can Guangdong sharpen its competitive edge and build a strong economic province and a harmonious society," Zhang said.

Industrial Upgrades Underway
Short and long-term goals for Guangdong to enhance its innovation are already underway. By 2010, Guangdong will build a regional independent innovation system which fits the market economy and science and technology development standards. To 2020, the regional independent innovation ability is to reach the average level of developed country.

The proportion of primary, secondary and tertiary industries grew from 15.1: 50.2: 34.7 in 1995 to 7.8: 55.4: 36.8 in 2004. Meanwhile, the boom of high-tech industries' production value reached 819.629 Billion RMB in 2004, the highest in the nation. In 2004, more than 29,000 patent applications were approved, a 28 percent increase from the previous year. Science and technological progress contributed to 47 percent of industrial growth in 2004.

According to a list of the top 50 enterprises released by the Guangdong Economic and Trade Commission and the Statistics Bureau, these 50 wealthiest industrial enterprises have a stronger profit-yielding capacity and represent the leading force in the development of Guangdong's industrial economy. Approximately 70 percent of these enterprises are engaged in electronics and information technology (IT), machinery and petrochemicals industries which account for 73.4 percent of the top 50 industrial companies' total assets.

Enterprises with advanced science and technology will take a leading position in Guangdong's industrial growth. Huawei, which ranked fourth on the top 50 list, is an example of Guangdong's latest boom in technological innovation and intellectual property protection. Huawei had invested more than 4 billion RMB (494 million US dollars) in research and development, and in the first half of this year, it made 1,231 patent applications, ranking first among Chinese companies.

Effective polices are the basis for technological innovation and industrial improvement. This progress would be impossible without the government support, which identified 'sustainable development' strategies as early as 1998. In 2000, Guangdong officials set a Science and Technology Award in the provincial CPC Standing Committee Conference to ignite enthusiasm for science and technology operators.

Special effort has been invested in driving forward large industries, key enterprises and brand name products. In June, 2005 the provincial government invested 280 million RMB in helping enterprises obtain core technologies and improve their ability for independent innovation. Guangdong lawmakers signed a document with the Ministry of Education on September 22, 2005, which will help to enhance the province's independent innovative capability and support technological innovation.

Guangdong will improve international competitiveness and overall economic quality in order to boost its economic growth to its maximum potential by scientific and technological innovations. The people of Guangdong are ready to step up to the challenges of an ever-changing economic climate.

Editor: Ouyang Yan