Surge in high-tech investments helps Guandong shake off low-cost image

GuanzhouForeign direct investment into Guangdong surged by 13.6% to just under $17bn in the first nine months of 2017, according to data released by the Chinese province’s Bureau of Statistic this week, as a growing number of multinationals operating in the high-tech, advanced manufacturing and new-energy sectors set up shop and help China’s industrial Pearl River Delta shake off its image as a centre of low-cost manufacturing.
Attracted by Guandong’s stimulus policies and its improving business environment, a total of 47 Fortune Global 500 companies have launched projects in the capital Guanzhou this year alone; in March, work began on the construction of the world’s largest 8k-resolution panel factory for Taiwan-based electronic contractor Foxconn Technology at a total cost of $9.2bn, while development of General Electric’s 350,000m² biopharmaceutical facility is now also under construction.
The Foxconn project is believed to be the largest overseas investment in Guangzhou since China started encouraging inward investment back in 1978, and indicates that the province’s strategy of moving up the value chain in order to counter the threat to its competitiveness posed by rising costs is working.
The new facility was “not merely a panel processing factory” Foxconn CEO and Chairman Terry Gou insisted and the authorities are also hoping that the factory will help encourage hundreds of upstream and downstream electronic suppliers to move their businesses to Guangzhou, creating a new industrial group worth an estimated $150bn.
Song Ding, an analyst at the Shenzhen-based China Development Institute, hailed the trend as a sign that Guangdong Province has gradually shaken off its previous reputation as being a centre of cheap manufacturing for low-end industries. “In contrast to the scenario several years ago when foreign enterprises set up factories in Guangdong merely to take advantage of the province’s cheap production factors, the newly launched projects mostly feature middle- to high-end industries such as the Internet, new energy and aviation,” he told Global Times.
Earlier this week Guangdong announced a further package of 10 measures specifically intended to attract more inward investment from the Global Fortune 500 and high-tech companies from around the world. 

Source: globaltimes