Respected Advisors and Observers, Ladies and Gentlemen,
Good afternoon. Now I would like to say something about the innovation through international cooperation in Guangdong. I sincerely hope you will offer your comments and put forward some suggestions.
Guangdong is the pioneer of China's opening up policy. It is also one of the provinces that have the most contacts with the international community. In 2006, Guangdong's foreign trade volume totaled US$520 billion , which accounted for 1/3 of the national gross amount. The direct foreign investment amounted to US$177 billion, making up one fourth of the national total. In the same year, the province received more than 100 million inbound travelers, which took 80% of the total number in the country. In foreign exchanges, we strived to promote the international cooperation in technological innovation. In recent years, Guangdong has witnessed some positive changes in its foreign trade and economic cooperation with other countries.
Firstly, the percentage of foreign investment in technology-intensive industry has been on the increase, which has become the leading force in industry upgrading in Guangdong. In the recent years, foreign investors have steadily expanded their investment in the sectors of electronics, telecommunications, automobiles, petrochemical industry, and the like. Of all the exported high-tech products, eighty percent of them are produced by foreign-funded enterprises.
Secondly, processing industry has been upgraded through introducing advanced technology. Such industry has now transformed from labor-intensive to technology-intensive or cost-intensive, and the value added has been greatly raised. Now the high-tech products account for 40% of the total foreign trade volume in Guangdong.
Thirdly, the import of advanced technology has been on the sharp increase. In 2006, the registered contract sum for imported technology amounted to US$1.54 billion, 82.2% up against the same period of the previous year. Elite management personnel have kept pouring into Guangdong. In 2007 Shenzhen and Hong Kong launched the project of Inter-city Innovation Circle, which has greatly pushed forward the cooperation in science and technology in the two cities.
Fourthly, more and more transnational companies have set up their R&D offices in Guangdong. By the end of 2006, 181 of the Fortune Global 500, including DuPont, P&G, Mitsubishi, Honda and Samsung, had established 649 enterprises and 261 R&D centers in Guangdong. In July this year, Guangzhou Honda Autos Development Corporation, with 2 billion yuan as its first phase of investment, was founded. It is the first corporation of this kind in China that is solely funded by the joint venture itself and operates as independent legal entity. It is also a role model of mutual benefit and win-win cooperation between Guangdong and transnational companies. Through joint work with other countries, Guangdong has improved its capabilities for innovation. Meanwhile the transnational companies opened up a broader market for their products and earned excellent profits.
However, we must realize that we are now confronted with a great many difficulties in making innovation through international cooperation. The overall capabilities for innovation are still weak. Firstly, the flow of elements for innovation is not active enough, and the supporting system for technical and industrial service leaves much to be desired. Secondly, there has been insufficient cooperation with other countries in tackling major research projects. The work of recruiting excellent personnel and introducing management expertise has been lagging behind. Thirdly, direct investment is still the primary form of international cooperation, and the ratio of imported technology to direct investment is fairly low. Fourthly, it is hard for the enterprises and their technologies to go overseas.
Independent innovation and economic globalization are the two major strategies for Guangdong's development in the new era. In the course of its future development, Guangdong Province will unswervingly open further to the outside world and actively promote innovation-oriented international cooperation.
First is to improve innovation-oriented cooperation. We will attract transnational enterprises, particularly the Fortune Global 500 enterprises and prestigious foreign-funded enterprises, to establish research and development institutions in Guangdong Province, and encourage the collaboration with Guangdong's universities, R&D institutions and enterprises to set up technological innovation institutions like laboratories; and jointly undertake technologically innovative activities with other countries and regions in some important fundamental frontier areas and new- and high-tech areas. We will encourage foreign-invested enterprises to constantly re-adjust and optimize their investment patterns for higher technological levels of their invested projects. We will actively develop the modern service industries like finance and logistics into key industries and new growth points in attracting foreign fund. We will continue to promote innovative cooperation and joint efforts to make scientific and technological breakthroughs among Guangdong, Hong Kong and Macao, and accomplish the share of scientific and technological sources around the Pearl River Delta and cooperation in scientific and technological innovation.
Second is to construct an open and cooperative platform. Guangdong will continue to support its areas where conditions permit in establishing exemplary bases for internationally cooperative projects of science and technology. We will build up a high-level batch of open and common laboratories as well as innovation platforms for industrial clustering across regional industries and fast improve the supporting systems of science and technology and service industries in order to foster a regional system of independent innovation, which is characterized by rational structure, full range of functions, dynamism and open competition. We will take full advantage of the Canton Fair, China High-tech Fair, China Exposition for Small and Medium Enterprises and Guangdong International Tourism and Cultural Festival for more and more innovation-oriented international cooperation.
Third is to expand the scope of technological imports. We will encourage technological imports and international cooperation and attract transnational companies to expand their scope of direct and indirect investment in our independently innovative areas. We will focus on importing technologies which help to save energy and reduce emission, improve industrial technology and transform the development patterns.
Fourth is to make Guangdong's enterprises globally competitive. We will develop a group of export-oriented enterprises and products within dependent intellectual property rights; and encourage enterprises to set up R&D centers or scientific and technological enterprises in the technologically advanced areas of foreign countries. We will encourage our enterprises to develop cooperation of trade and investment with our neighboring areas.
Distinguished consultants and guests, promoting innovation-oriented cooperation is not only a prerequisite for economic globalization, but also the realistic demands for our mutual benefit and a win-win result, which can bring to us capital, technology, talents and management and business opportunities. We will go global by thoroughly implementing the Scientific Outlook on Development and adopting more open and down-to-earth measures. We will readily follow the trend of ever-merging economic development and scientific and technological innovation and promote international cooperation in the areas of innovation for the better and faster development of the economy-centered society.
What most effective approaches should we adopt in improving the standard of international cooperation? And what conditions and environment should we foster for it? What do you—all consultants and your institutions--think of strengthening innovative cooperation with Guangdong? We look forward to your discussions on the above topics. We are sincerely attentive to your suggestions and we also delight in sharing market opportunities and commercial values with all of you in the course of constructing innovation-oriented Guangdong Province.
(Full text of the remarks by Tang Bingquan, Executive Vice Governor of Gaungdong Province at the 2007 International Consultative Conference on the Future Economic Development of Guangdong Province on November 15, 2007, as transcribed)