"Proton cage for birds," the strategy of double-shift strategy in Guangdong difficulties and challenges

Published: 16 May 2009 03:02:14

Through this, commonly known as "cage for birds Teng" strategy, on the one hand, can focus on the development of the Pearl River Delta area of advanced manufacturing and modern services to enhance regional competitiveness and the achievement of industrial transformation. Recently released by China's State Council, "the reform and development of the Pearl River Delta Region Plan 2008-2020", a clear move to the Pearl River Delta into the world's most advanced manufacturing and modern service industry base. On the other hand, relatively less-developed areas of Guangdong to the edge of the industry to undertake the transfer of the Pearl River Delta, thus boosting their industrial growth and to speed up the economy as a whole.

Based on cheap labor, the introduction of raw materials and manufacturing technology for low-end of the traditional industrial development model, will eventually end one day. Affected by the new labor contract law, and raw materials prices and the multiple effects of the appreciation of the renminbi, Guangdong and labor-intensive low value-added enterprises are faced with a rapid increase in the overall cost of production brought about by competitive pressures, many companies fall into the plight of the development. Thousands of such enterprises has been discontinued or closed.

Deepening the current global economic crisis, but also the development of such enterprises to make even worse, breaks the camel became the last straw. Double transfer strategy is to achieve sustainable development of Guangdong's economy and the only way to take off again, the implementation of this strategy is feasible and necessary. The supply of land resources by the growing tensions, severe environmental pollution, coupled with rising costs and other factors, the traditional model of economic development difficult.

Government underestimated the difficulties too

However, the Guangdong Provincial Government underestimated the strategy will promote the transfer of pairs of the difficulties encountered, for the realization of the "Guangdong manufacturing" to "Guangdong to create" to the main features of industrial upgrading will be less than understanding of the challenges. The process of industrial upgrading and transformation may not be smooth and quick, the Government must be fully aware of the process arduous and long-term. In general, the industrial upgrading in the difficulties and challenges encountered in the following four aspects.

First, the Pearl River Delta, exclusion and resistance of local governments. A large number of low value-added business is not only a major contribution to local taxes, but also provide a great deal of local employment opportunities. More importantly, many areas in the Pearl River Delta, the development of many service industries dependent on these enterprises, such as financial services, logistics, catering and entertainment business.

Low value-added and labor-intensive industries will no doubt severely affected by the transfer of local economic development, leading to local economic slowdown. Can not be guaranteed in the advanced manufacturing and modern services make up for the rapid development of low value-added business from the losses caused by the transfer, the local government for their own interests, the Guangdong Provincial Government will inevitably introduced double-shift strategy to wait and see, the delay and resistance to such means to deal with.

Local governments and enterprises in the implementation of "Proton-for-bird cage" strategy played a crucial role, if not their active support and the smooth implementation of this strategy difficult.

Secondly, the implementation of double shift in strategy by the industry agglomeration effects arising from the challenge should not be underestimated. Benefited from the excellent geographical location, market size and policy advantages, large number of economic factors such as workers, capital and technology are highly concentrated in the Pearl River Delta, thereby encouraging a large number of low value-added industries and the related downstream industries are gradually gathered in the this area.

It can be said that the Pearl River Delta Region has established a complete industrial chain of supporting development. Agglomeration effects and economies of scale brought about by the role of technology diffusion and further promoted the low value-added and labor-intensive enterprises here. In Guangdong Province, accounting for large-scale industrial production value of more than 70% of the nine pillar industries in the geographical distribution, we can see clearly that the high concentration of industrial production in the Pearl River Delta region, while the two wings and the northern mountainous area of Guangdong's industrial development rather backward.

To electronic information, electric machinery and transportation equipment manufacturers as an example the three major industries in 2007, ranking the top three areas are all located on the Pearl River Delta region. They are Guangdong Province, accounting for electronic information, electric machinery and transportation equipment manufacturing industry for more than the size of the total value of industrial production 76.7%, 63.8% and 86.2%.

In the past three decades years of reform and opening up the Pearl River Delta, industrial and economic benefit from the rapid development of the self-enhanced aggregation of the industry. A large number of export-oriented industries of low value-added great impetus to the take-off of the Pearl River Delta economy. How to break the low value-added industries in order to promote decentralization and the transfer of industries will be facing the problem before the Government.

The issue of the Pearl River Delta Industrial Hollow

Guangdong wings and in the mountains, the land-locked by its own disadvantage of geographical location and mountainous areas caused by high transport costs, as well as the lack of economies of scale and industry agglomeration effects of the proliferation of so many low value-added enterprises, the overall production costs are too high and therefore not would like to transfer this. We know that most of these enterprises are export-oriented production, and therefore the length of transportation time and cost of the level of development is crucial for their impact. This is why many built in the mountainous areas of Guangdong and the two wings of the industrial park development in the transfer of the important reasons for unsatisfactory.

It is learned that very few low value-added industries and enterprises have moved into the park transfer. Intended to guide government policy and administrative means to a strong industry and labor to implement double-shift strategy is difficult to succeed. Government must first resolve the wings and the mountain is too high transportation costs and lack of economies of scale of the problem, so as to enhance these less developed areas more attractive for the transfer of businesses. Accelerate the construction of the edge connecting Guangdong Pearl River Delta region and the transport infrastructure to reduce transport costs and enhance the overall attractiveness of the two wings and in the mountains and an important part of competitiveness.

Third, the Pearl River Delta region to develop high value-added and high-tech industries will be a long-term process. The development of high value-added industries need the support of modern technology, adequate capital and qualified personnel. And precisely in these areas is a disadvantage in Guangdong. The rapid development of the Pearl River Delta economy is based on low value-added and labor-intensive traditional manufacturing industries, it is referred to as a "world factory."

But a long time, the Pearl River Delta of high value-added development of modern industry is lagging behind, the whole industry less competitive. Based on official statistics, to 2007, the high-tech industry in Guangdong Province accounted for the ratio of total industrial output value of only 26.5%. Information, computers, software and financial services such as high-end area of the ratio of the tertiary industry accounted for only 18.9%. Therefore the implementation of double-shift strategy for rapid, low value-added industries will be transferred to Guangdong from the two wings of the Pearl River Delta and the mountains, at the same time can not be the rapid development of high value-added industries with low value-added industries to fill the vacancy transfer, it is inevitable that industry will bring about the Pearl River Delta hollow of the problem.

Shortage of technical personnel is a high-tech industry and modern service industry is lagging behind the development of one of the important reasons. For example, technical staff in the Yangtze River Delta region is the total more than twice the Pearl River Delta. Sufficient technical personnel is a high-tech industrial development and industrial transformation of the important boosters. Research and development for government spending is a serious shortage of high-tech industry lagged behind the development of one of the reasons why. To statistics in 2007 as an example, Guangdong Province, for research and development in areas of government spending accounted for only 1.3% of GDP. This figure not only far lower than the 2.52 percent in Shanghai, but also below the national average of 1.46%.

Slow down the pace of transformation of the economic crisis

Fourth, industrial transformation and upgrading will inevitably cause a substantial number of low value-added enterprise production, transfer and closure, followed by workers in the unemployment problem will become more difficult. Increasingly serious in the current global economic crisis, the security of employment, security and stability of development and security as a top priority of the government's work, seems to become obsolete industrial upgrading. In a certain sense, the economic crisis has worsened the industrial upgrading of the difficulties and challenges, the crisis will slow down the Guangdong industrial upgrading and the pace of transition. Government should not disregard the problem of increased unemployment and sought to promote the dual-transfer strategy, and thus the impact on social stability. Guangdong, the realization of industrial upgrading at the same time to promote employment opportunities to keep the balance between the two it is urgent.

Enterprises to promote industrial upgrading the survival of the fittest is to build a modern industrial system and the inevitable result. However, in Guangdong, only a small number of high-energy consumption and high pollution in low-end manufacturing enterprise must close or transfer, a number of low value-added enterprises through policy support and their own efforts to enhance the innovative capability, transforming self-upgrade. However, in promoting the product upgrading and technological progress in order to achieve self-transformation process, a number of low value-added and labor-intensive enterprises are faced with the problem of insufficient funds. Guangdong's economy they have made a significant contribution to development, the Government has the responsibility and obligation to help these companies tide over the difficulties, we should not give up these enterprises.

It can be anticipated that the final completion of the transfer of industry and labor dual strategy will be a lengthy process. Guangdong provincial government must be fully conscious and active implementation of this strategy will be to deal with the difficulties and challenges faced by a sound and prudent steps to promote industrial restructuring and the transformation and upgrading. The only way to successfully promote the double-shift strategy in Guangdong Province to establish a modern industrial system and enhance the competitiveness of regional strategic objectives.