Experts say innovation key to developing a sustainable economy

Entrepreneurs and economists have called for industrial transformation and innovation for businesses in Fujian province to brace for a new round of development amid the fast changing global economy.

Qiu Xiaohua, chief economist with Fujian Merchants Forum, said businesses in Fujian should quickly adapt to the changing global economy by actively transforming industries as rising production and labor costs in recent years in China have posed great challenge for manufacturers.

"Companies will make little profits if they still rely on labor-intensive manufacturing," Qiu said at the annual Fujian Merchants Forum.

A key part of the CIFIT, the Fourth Fujian Merchants Forum focuses on transformation and innovation. Zhu Xingxin / China Daily

The forum opened in Xiamen, a coast city in eastern Fujian on Saturday, ahead of the opening of the annual China International Fair for Investment and Trade.

Particularly, businesses in Fujian province should transfer from the traditional manufacturing industries to high-end service sector and emerging industries, according to Qiu.

"Over the past three decades, businesses in Fujian have contributed a lot to the country's economic development. But most are engaged in the manufacturing sector, which needs to be upgraded in the current global economic situation," Qiu said.

Following weak demand in the overseas market in recent years, the local government has also called on manufacturers to pay more attention to innovative industries.

"Traditional industries including mining, petrochemicals, iron and steel, machinery and buildings should be better transferred to emerging industries such as environmentally-friendly and high-end businesses in the near future," he said.

At the forum, Xu Lianjie, chief executive officer of Hengan International Group, said Fujian-based manufacturers should attach importance to the development of innovative products to better make a market share amid the global economic downturn.

"There is still a very large demand in the domestic market. For manufacturers in Fujian, they should provide new products, which are of significance to drive the market trend, to make a sustainable development," Xu said.

Xu has become the richest Fujian-based entrepreneur on the mainland in 2012, according to a latest top 100 Fujian-based entrepreneurs list.

The list, which was jointly released on Friday evening by the organizing committee of the CIFIT, Sina Corp and Xiamen University, outlined industrial changes and business trends that Fujian-based entrepreneurs have covered in the past few years.

Entrepreneurs in the top 100 richest list in Fujian accumulated some 557.2 billion yuan ($90.9 billion) in 2012, official sources said.

Industries engaged by Fujian entrepreneurs mostly cover manufacturing industries, ranging from healthcare, food, garment and real estate to sport goods.

"Fujian relies heavily on manufacturing industries for its economic development. As a result, we have developed a strong real industrial chain, which will be very helpful for business innovation in the near future," Xu said. Established in 1985, Hengan was one of the earliest foreign investment enterprises entering the sanitary napkins market on the Chinese mainland. Following the rapid expansion of the hygiene product industry, business of the group has grown steadily over the past few years.

"When we began producing sanitary napkins three decades ago, fewer people have noticed that the market would become so huge. But now you see that we have provided safe and healthy products to our customers and the market has supported a strong business growth for us," he said.

As well as the expansion of sanitary napkins, the company also manufactures other personal hygiene products.

A growing number of Chinese manufacturers have seen business drops in recent years due to sluggish domestic and overseas market demand. However, sales revenue of the Hong Kong-listed Hengan Group increased by 15.2 percent year-on-year to reach about HK$10.42 billion ($1.34 billion) in the first half of 2013, the company sources said.

"We've always paid significance to innovation and brand building since establishment. That's why we have made a sustainable development in the past years," Xu said.

qiuquanlin@chinadaily.com.cn

(China Daily 09/08/2013 page20)