Dongguan uses technology to move upstream

Cooperation with domestic and international science and technology companies and a transformation focusing on high-tech industries have helped Dongguan, an important manufacturing and trade hub in Guangdong province, to upgrade its traditional industries, said a local official.

In an interview with China Daily during the China (Dongguan) International Science and Technology Week, Xian Zhou'en, director of the Dongguan Economy and Information Bureau, said the city's industrial output and exports have held up in the years since the financial crisis in 2008.

He attributed that outcome to Dongguan's efforts to transform its economy from one with a labor-intensive manufacturing sector to one emphasizing advanced technology.

The science and technology event, which is scheduled to end on Friday, drew more than 330 domestic and overseas high-tech companies and institutes to showcase their latest products.

"We have not seen a big round of business closures since 2008, when the global economy went into a decline.

"Instead, a growing number of high-tech enterprises have emerged in recent years, helping us better cope with the economic downturn," Xian said.

Dongguan, in the heart of the Pearl River Delta, has been one of the world's key manufacturing bases in the past two decades, thanks to a vast number of labor-intensive and processing businesses.

The city's GDP increased 6.1 percent year-on-year to surpass 500 billion yuan ($821 million) in 2012, and its exports grew 8.6 percent to more than $85 billion, the local government said.

The city still has some 500,000 small and medium-sized manufacturers, which are mostly engaged in processing trade, according to Xian.

"They are facing a tough business situation due to increased production and labor costs and lower demand from the global market. But a growing number of them have realized the importance of increasing investment in innovation and upgrading technology," Xian said.

In the first three quarters of this year, 203 more processing trade companies in Dongguan opened research and development facilities, according to Xian.

According to a recent survey of the top 500 export-oriented businesses in Dongguan, 31.6 percent plan to boost investment in technology research and 32.1 percent will introduce and buy more advanced production facilities in the next year.

"Cooperation with domestic and overseas companies in science and technology have helped boost the competitiveness of local manufacturing businesses," said Xian.

Since the science and technology week was launched in 2004, Dongguan has developed more than 2,000 cooperative projects involving science and technology with more than 20 countries and regions, local government officials said.

"The projects are quite different from traditional businesses, involving new energy, bio-medicine, electric vehicles and high-end equipment," said Xian.

Increased investment in science and technology has helped develop a growing number of high-tech companies since 2008, according to Wu Meiliang, deputy director of the Dongguan Science and Technology Bureau.

"Apart from government subsidies in supporting local business in science and technology, many companies have also boosted investment in innovation and upgrading their products, helping them cope much better with the global economic downturn," said Wu.

Dongguan has developed more than 4,000 high-tech enterprises, with output value of high-tech products worth 340 billion yuan in 2012, according to Wu. The value represented 36.2 percent of the city's total industrial output.

Dongguan's exports of high-tech products increased 14.8 percent year-on-year to $24.3 billion in the first three quarters of this year, accounting for more than 30 percent of the city's total exports, local customs figures show.

Zhang Guoyi, general manager of Sino Nitride Semiconductor Co, said cooperation in science and technology with leading overseas companies went far to upgrade its products and help it better tap the international market in the past few years.