SUMRAKKARARRameeee
CONFIDENTIAL #3
10
Guangdong's economic development strategy
13.
(a) Quantity increase versus quality improvement
Guangdong's present stage of economic
development generally and industrial development in particular is similar to that of Hong Kong in the 1950s and 1960s. Its main development objective is to build up a larger manufacturing base with emphasis on increases in
terms of output rather than product upgrading or
innovation. This is probably sensible as Guangdong needs
to expand its industrial and export capacity before it can introduce more sophisticated products or production
processes. If the experience of Hong Kong and other more developed economies is anything to go by, the provision of sophisticated industrial support services will only become
cost effective when the manufacturing sector has become
sufficiently large. Furthermore, a well developed indigenous manufacturing sector is conducive to the
development of many tertiary services like banking and finance, particularly during their initial, take-off period
(21)
14.
One major consideration in Guangdong's industrial policies has been providing employment for
labour no longer needed in agriculture
(22)
•
Labour
(21) Hong Kong's manufacturing sector still generates a
large amount of business for the financial services sector.
(22) Some officials in Guangdong have claimed that labour shortage was a problem in some localities and it was reported that Dongguan had been "importing" workers from other more inland counties and provinces. However Guangdong Province as a whole, and even more so China, has a potential labour surplus as fewer workers are needed in the agricultural sector.
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