Page 336 - 2017 White Paper
P. 336
7 White Paper on the Business Environment in China
Increasing labor costs stand in contrast to the region’s Shenzhen, as shown by projects such as the second
substantial but nevertheless decreasing productivity board at the Shenzhen Securities Exchange and
growth. This has been a major driver behind the flight of construction of the Guangdong Financial and High-tech
labor-intensive industries from China in recent years to Services Zone.
lower-cost alternatives, such as Vietnam. Other factors
pushing investment away from the region include · I m p r o v e i n f r a s t r u c t u r e , a n d p r o m o t e
China’s increasing emphasis on the service sector over Guangdong as a world-class logistics center through
manufacturing, as well as decreasing industrial land the construction of several hub-type modern logistics
availability in the PRD. parks, including those at Baiyun Airport, Bao’an Airport,
Guangzhou Port and Shenzhen Port.
Realizing the harm of rapidly rising labor costs to its
economy, in February 2016, the Guangdong provincial · I m p l e m e n t a n “o u t w a r d ” s t r a t e g y, b y
government announced that it would maintain the same establishing 10 native multinational corporations with
minimum wage level as 2015 for both 2016 and 2017. annual sales revenue of over US$ 20 billion by 2020.
Despite this, and spurred by on-going processes · Develop a series of specialized conventions
of industrialization, urbanization and marketization, and exhibitions, including the Guangzhou Export
the PRD remains home to a vibrant economy, which Commodities Fair, Shenzhen High-tech Fair, Zhuhai
the government (at all levels) is doing its best to International Aviation and Aerospace Exhibition,
reshape. To accomplish this, some local governments Guangzhou Small and Medium-Sized Enterprise Fair and
are implementing stricter industry approval measures, Shenzhen International Cultural Industries Fair.
ranging from increased minimum registered capital
thresholds (some raised as much as tenfold) to more · Foster creative industry business clusters,
stringent criteria for total investment or output value per including the construction of a national base for the
square meter invested. Furthermore, local governments software and animation industries.
in more heavily-invested areas are increasingly refusing
to approve investment from enterprises in non- · Increase the innovative capacity of the region
capital-intensive, low value-added or environmentally to realize the transformation from “Made in Guangdong”
harmful industries, forcing such enterprises to locate to “Created by Guangdong” by 2020.
elsewhere in the PRD or further inland. Lastly, research
and development, with government support, is also · Establish internationally influential brands in
increasing in the region. Together, these trends can be Foshan for home appliances and building materials, in
seen as indicative of a maturing economy. Dongguan for garments, in Zhongshan for lighting, and
in Jiangmen for papermaking.
Future Outlook
Economic Development Goals for the PRD
“The Outline of the Plan for the Reform and
Development of the Pearl River Delta (2008-2020)”, (2009, 2012, 2020)
put forward by the National Development and Reform
Commission (NDRC), describes the PRD region as an 2009 2012 2020
experimental area for scientific development and calls
for the creation of three super-metropolitan areas, GDP per capita 60,000 80,000 135,000
respectively, Guangzhou and Foshan, Hong Kong and (yuan)
Shenzhen, and Macao and Zhuhai. Provided with greater
autonomy, the PRD is expected to be at the forefront of GDP from service 50% 53% 60%
new economic patterns and achieve balanced economic sector
development between its urban and rural areas.
Urbanization 76% 80% 85%
The Plan also includes the following key goals:
· Establish financial centers in Guangzhou and Source: Outline of NDRC Development Plan for the PRD
(2008)
To reach these goals in the increasingly overcrowded
PRD region, the Guangdong provincial government
recently allocated more than 672 billion yuan (US$109.75
billion) to develop rural areas in the province over the
336
Increasing labor costs stand in contrast to the region’s Shenzhen, as shown by projects such as the second
substantial but nevertheless decreasing productivity board at the Shenzhen Securities Exchange and
growth. This has been a major driver behind the flight of construction of the Guangdong Financial and High-tech
labor-intensive industries from China in recent years to Services Zone.
lower-cost alternatives, such as Vietnam. Other factors
pushing investment away from the region include · I m p r o v e i n f r a s t r u c t u r e , a n d p r o m o t e
China’s increasing emphasis on the service sector over Guangdong as a world-class logistics center through
manufacturing, as well as decreasing industrial land the construction of several hub-type modern logistics
availability in the PRD. parks, including those at Baiyun Airport, Bao’an Airport,
Guangzhou Port and Shenzhen Port.
Realizing the harm of rapidly rising labor costs to its
economy, in February 2016, the Guangdong provincial · I m p l e m e n t a n “o u t w a r d ” s t r a t e g y, b y
government announced that it would maintain the same establishing 10 native multinational corporations with
minimum wage level as 2015 for both 2016 and 2017. annual sales revenue of over US$ 20 billion by 2020.
Despite this, and spurred by on-going processes · Develop a series of specialized conventions
of industrialization, urbanization and marketization, and exhibitions, including the Guangzhou Export
the PRD remains home to a vibrant economy, which Commodities Fair, Shenzhen High-tech Fair, Zhuhai
the government (at all levels) is doing its best to International Aviation and Aerospace Exhibition,
reshape. To accomplish this, some local governments Guangzhou Small and Medium-Sized Enterprise Fair and
are implementing stricter industry approval measures, Shenzhen International Cultural Industries Fair.
ranging from increased minimum registered capital
thresholds (some raised as much as tenfold) to more · Foster creative industry business clusters,
stringent criteria for total investment or output value per including the construction of a national base for the
square meter invested. Furthermore, local governments software and animation industries.
in more heavily-invested areas are increasingly refusing
to approve investment from enterprises in non- · Increase the innovative capacity of the region
capital-intensive, low value-added or environmentally to realize the transformation from “Made in Guangdong”
harmful industries, forcing such enterprises to locate to “Created by Guangdong” by 2020.
elsewhere in the PRD or further inland. Lastly, research
and development, with government support, is also · Establish internationally influential brands in
increasing in the region. Together, these trends can be Foshan for home appliances and building materials, in
seen as indicative of a maturing economy. Dongguan for garments, in Zhongshan for lighting, and
in Jiangmen for papermaking.
Future Outlook
Economic Development Goals for the PRD
“The Outline of the Plan for the Reform and
Development of the Pearl River Delta (2008-2020)”, (2009, 2012, 2020)
put forward by the National Development and Reform
Commission (NDRC), describes the PRD region as an 2009 2012 2020
experimental area for scientific development and calls
for the creation of three super-metropolitan areas, GDP per capita 60,000 80,000 135,000
respectively, Guangzhou and Foshan, Hong Kong and (yuan)
Shenzhen, and Macao and Zhuhai. Provided with greater
autonomy, the PRD is expected to be at the forefront of GDP from service 50% 53% 60%
new economic patterns and achieve balanced economic sector
development between its urban and rural areas.
Urbanization 76% 80% 85%
The Plan also includes the following key goals:
· Establish financial centers in Guangzhou and Source: Outline of NDRC Development Plan for the PRD
(2008)
To reach these goals in the increasingly overcrowded
PRD region, the Guangdong provincial government
recently allocated more than 672 billion yuan (US$109.75
billion) to develop rural areas in the province over the
336
