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China revamping its key southern factory region
2009-01-09
GUANGZHOU, China - China has updated an ambitious blueprint to aggressively revamp the country's key manufacturing region -- a plan that has already helped cause many low-end factories to move or shut down. The sweeping new plan, released Thursday in Beijing, covers the next 12 years and targets the booming Pearl River Delta in southern Guangdong province, which shares a border with Hong Kong. The general goal is to transform the region -- which has long been a laboratory for China's capitalist experiments -- into a base for advanced manufacturing, innovation and heavy industry, according to the National Development and Reform Commission. For the past 30 years, the Pearl River Delta -- known as the world's factory floor -- has been a major base for labor-intensive industries producing shoes, textiles, toys, sporting goods and other low-end goods. But in recent years, the export-driven factories -- many of them owned by Hong Kong and Taiwanese investors -- have become less competitive as costs for labor, land, energy and raw materials have risen. China has been encouraging the low-end manufacturers to move to interior provinces, where costs are cheaper. In recent months, as the economy has slowed amid waning global consumer demand, the government refused to help many of the struggling small- and medium-sized factories making shoes, toys and textiles, causing them to fold or relocate. Last year, 62,400 enterprises and branches of companies closed in Guangdong, 4,739 more than in 2007, Huang Longyun, vice governor of Guangdong, told reporters at a briefing in Beijing on Thursday. Some 600,000 migrant workers left the region last year as factories closed and business slumped, he said. National Development and Reform Commission Vice Chairman Du Ying added that the road ahead would be difficult. "It looks like that the further development of the whole Pearl River Delta area is facing grave challenges," he said at the Beijing briefing. The closures of the low-end manufacturers will make room for high-end industries, especially carmakers, petrochemical firms and companies specializing in technology and services. The official Xinhua News Agency said the updated plan for 2008-2012 aims to achieve per capita output of $11,700 (80,000 yuan) by 2012, with 53 percent coming from the service sector. The per capita output value for 2007 was more than $7,000. By 2020, the region will develop 10 China-based multinationals with annual sales of $20 billion, the report said. It will be home to two to three big automakers with output worth more than $14.6 billion (100 billion yuan) each by 2020. Equipment manufacturers will focus on nuclear power facilities, ocean engineering, wind power equipment, power plants and high-tech machine tools.
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