Ambitious to establish its presence among the global industrial giants, Guangdong Province made a scrutiny into its industrial competitiveness in February, 2004, the first of its kind in this surging manufacturing center of the world.

Invited by Zhang Dejiang, member of the Political Bureau of the Communist Party of China (CPC) Central Committee and secretary of Guangdong provincial committee of the CPC, and Huang Huahua, the province's Governor, experts from key national departments conducted a large-scale research on the industrial sector of the province last year and released the final report in February.

The report covered Guangdong's nine major industrial sectors: electronics and IT, household electrical appliances and machinery, petrochemicals, textiles and garments, food and beverages, building materials, paper manufacturing, pharmaceuticals, and automobile manufacturing.

This report was a compilation of the advice of the experts and served as a reference for policy-making, a guide-book for the increase of the com-petitiveness of Guangdong's industrial sector, and a direction for the rational, sustained social and economic develop-ment of the whole province.

NEW APPROACHES

Over the past twenty-some years, Guangdong has de-veloped into an important global ma-nufacturing center. And industry plays a vital role in the provincial economy. In 2002, Guangdong's industrial added value accounted for 44.8 per cent of its GDP, and Guangdong outperformed all other Chinese provinces in industrial output, industrial added value, and large enterprise industrial added value indices. 

Meanwhile, Guangdong has had rapid industrial growth and accelerated str-uctural adjustments. In addition, China's joining the World Trade Organization and the CEPA agreement have brought opportunities. But, Guangdong also faces that growing challenge from Jiangsu, Shandong and Zhejiang provinces, which have moved  ahead of Guangdong in the pace of industrial growth.  
 
Guangdong is facing these opp-ortunities and challenges by making an effort to find new approaches to improved competitiveness in the in-dustrial sector, hence this report and the research that backed it.

STRENGTH AND WEAKNESSES

In 2002, provincial industrial output hit 1.89 trillion yuan, or 91 times greater than 20 years ago. It accounted for 14.79 per cent of the nation's total. In addition, the industrial structure had an optimal balance of heavy and light industry, at 50.17:49.83, and, for the first time, heavy industry outdid light industry.

Guangdong has been able to maintain its leading position in foreign trade, technology innovation, hi-tech ma-nufacturing development, individual bank deposits, utilized foreign funds, and labor resources.  

Guangdong's industrial product market share for 2002 was 14.84 per cent, which put it in 1st place in China, followed by Jiangsu, Shangdong, and Zhejiang provinces, and the city of Shanghai.

Its nine major industries and their domestic market share are outlaid: electronics and IT (36.3 per cent), household electrical appliances and machinery (20.94 per cent), paper manufacturing (15.69 per cent), building materials (12.84 per cent), textiles and garments (12.78 per cent), petrochemicals (9.41 per cent), foods and beverages (9.03 per cent), pharmaceuticals (8.27 per cent), automobile manufacturing (7.87 per cent).

The report also describes the short points in Guangdong's industrial se-ctor: Guangdong has no leading en-terprises in some sectors and lacks innovation and technological research; most of its industries are labor-intensive; and high business cost results in comparatively low economic returns. So, Guangdong's profits are clearly lower than those of Shanghai, Zhejiang and Shandong.

There has also been a problem with an excess of competition in some trades, as well as the large number of fake and shoddy goods still found on the market.

Moreover, exports account for only a small part of the foreign trade volume, and the export market is limited-  more than 80 per cent of exports go to the US, Japan, and Europe via Hong Kong. The average size of foreign investment in the Pearl River Delta region is actually smaller than that for the Yangtze River Delta.

LOOKING INTO THE FUTURE

The report has led the government to set an annual industrial development growth target of 15 per cent for the 2002-2005 period.

The increases for major industries of Guangdong are as follows: the speed of increase for electronics and IT, automobiles manufacturing, pe-trochemicals, paper manufacturing, and pharmaceuticals will be above average; for food and beverages, textiles-garments, and building materials will be below average.

The next task is to use the report to guide, to increase the development and structural adjustments in Guangdong's industries. It's believed that, as the re-search results are applied, the province's industries will improve on their tr-aditional advantages and witness the new emerge..

Editor: Yan