By Yu Bin, DRC

2017-6-21

In the past 30-odd years since reform and opening-up, the rapid development of China’s economy has mainly relied on the advantages of the low-cost resources, but such an extensive development mode is evidently unsustainable. In this regard, innovation strategies should be adopted by enhancing the technology and human capital in all aspects of the economic development and fostering new technologies, products, business forms and modes so as to shift the development mode from focusing on speed and scale onto quality and efficiency and further realize the essential transformation of China’s development mode.

Since the international financial crisis, the global economy has faced increasingly severe problems such as weakening driving forces for recovery, unbalanced economic structure and more rigid restrictions of resources and environment. Populism has also been on the rise as people witness the entry of global economy into a phase of new mediocrity. Therefore, transforming the input mode and growth pattern and strengthening the implementation of the innovation-driven strategy should be prioritized on the agenda. In face of the challenges brought about by the global financial crisis, China must transform its development mode and strive to be equipped with the capacity of innovation.

The implementation of the innovation-driven strategy is a systematic engineering and China must adhere to reform and opening-up, deepen the reform of innovation-driven system and mechanism and strike a balance between the government and the market. China needs to depend on talent resources and technological innovation, especially the improvement of independent innovation. As an ultimate aim, the reform and opening-up and China’s economic development should bring tangible benefits to the people and enable them to share the fruits of the development.

Guangdong Province has played a leading role in reform and opening-up, and experienced enormous pressure in the transformation of its export-oriented economy compared with other parts of the country. After the international financial crisis, the defects such as high energy consumption, high pollution, high input, low efficiency and low profits were exposed in the economic growth mode of Guangdong. While such a development mode played a positive role during the mid-to-late period of industrialization and the transformation of Guangdong from an agricultural province to an industrial one, the extensive development mode mainly depending on the input of resources and exploitation can hardly sustain economic growth when confronting severe shortage of energy and land. Besides, Guangdong has a high dependence ratio on the international market. The negative impact exerted by the global financial crisis has made economic growth become difficult. In addition, the low-end industries and technologies only lead to large in scale but weak in capacity without core competitiveness. As a result, it is hard for Guangdong to face up to the fierce international and regional market competition.

In 2012, President Xi Jinping pointed out during his inspection tour in Guangdong that as a developed coastal province, the defects of its traditional development mode were exposed in the early days and to the full. As a result, people in Guangdong must have perceived and conceived the most profoundly the urgency of transforming the economic development mode. The Guangdong government later adopted several measures such as industrial transfer and labor transfer, the replacement of traditional industries with advanced ones and innovation-driven strategies. These measures have effectively contributed to the construction of the modern industrial system in Guangdong and propelled the transformation from a resource-driven development mode to an innovation-driven one. At present, a new innovation-driven landscape has been formed at the Pearl River Delta led by Shenzhen and Guangzhou and supported by the seven national high-tech industrial development parks which have played their role in driving a coordinated development of the surrounding areas including the eastern, western and northern areas of Guangdong Province. According to the author, the above-mentioned achievements of Guangdong Province are mainly attributed to the following reasons. First, the local government has a thoroughly understanding of the importance of innovation and adopted relevant strong measures. The Guangdong government has taken innovation-driven development as the driver and core strategy of local administration and issued several innovation-related policies, thereby laying a solid foundation for innovation-driven development. The leading members in Guangdong are familiar with the social and economic performance and have accordingly implemented targeted innovation-driven strategies in light of local conditions. At the Innovation-driven Development Meeting of Guangdong Province held on February 7 this year, Hu Chunhua, member of the Political Bureau of CPC Central Committee and Secretary of Guangdong Provincial Committee of the CPC, stressed that the local administrators should not waste their time on producing innovation-related documents, plans and schemes but should implement related measures to ensure that all the set decisions and deployment are carried out. Hu also proposed that the innovation-related work should become a duty-bound task of all the Secretaries of various Municipal Committees of the CPC in Guangdong Province.

Second, the Guangdong provincial government has given full play to the fundamental functions of market-oriented mechanism in innovation-driven development. For example, Guangdong is among the provinces where the business system reform took place in the initial period of reform and opening up, which is favorable for lowering the cost of innovation and entrepreneurship. On fostering the innovation start-ups, the Guangdong government focuses first on the incubation of the enterprises and then let the market determine its performance. Third, the Guangdong government has introduced, aggregated and transferred the talents and technology with prominent efforts. All cities in Guangdong have taken an active approach toward absorbing international innovation talents and technology. By now, technological communication and cooperation have been established between Guangdong and more than 40 countries and over 50 cooperation contracts have been signed. By the end of 2016, 204 enterprises, academia and research institutes innovation organizations, 2651 provincial engineering centers, 121 working stations for academicians and 195 working stations for technological specialists in enterprises had been established. In 2016, the number of hi-tech enterprises in Guangdong reached 19,857, ranking the first in China and was 3.64 times higher than that in 2012. There were more than 38,000 patent grants with a year-on-year increase of 15.38%, and the number of international patent application reached 43,100 for which Guangdong kept the first place for 15 consecutive years in China.

On April 4, 2017, President Xi Jinping made important instructions on the administration of the Guangdong government and praised its work in all aspects since the 18th National Congress of the CPC, proposing that Guangdong must follow firmly the guidance of the CPC Central Committee, socialism with Chinese characteristics, new development concepts and reform and opening-up. President Xi also points out that Guangdong should support the national supply-side structural reform, implement the innovation-driven strategies, establish an opening-up-oriented economic system, and strive to play a leading role in building a moderately prosperous society in all respects. His instructions have bestowed new missions on Guangdong and indicated the direction for its future development.

During the 12th CPC Congress of Guangdong Province, the provincial committee of CPC and the government proposed that the province would become one of the innovation-driven economies in the next five years, which was quite an inspiring news.

Guangdong boasts strong economic foundation, geographical advantages and strong independent innovation ability and takes the front rank in China. It is hoped that Guangdong will uphold the principles of morality, integrity and practice and advance the reform and development through opening-up. Besides, it must build an opening-up oriented regional innovation system and mechanism shored up by supporting policies, innovation-friendly environment and standards, and flesh out the systems such as independent R&D, functional platforms, coordinated innovation, incubation and public service. As long as these measures are properly implemented, Guangdong will make new achievements and add a new chapter to the history of China’s reform and opening-up.

Note: Yu Bin, Member of the Leading Party Members’ Group and Director-General of the General Office of DRC and research fellow