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China Economy

China’s economic powerhouse cuts growth target to 7pc but bids to boost high-tech manufacturing

Guangdong acting governor lays out policy blueprint for province in work report delivered at plenum

PUBLISHED : Thursday, 19 January, 2017, 12:53pm
UPDATED : Thursday, 19 January, 2017, 11:36pm

Guangdong will boost spending on research and development and cultivate the robotics industry as it tries to transform away from its role as the world’s factory, the provincial chief told lawmakers and political advisors.

The pledges were contained in a work report that Acting Governor Ma Xingrui delivered at the opening of the annual meeting of the Guangdong People’s Congress in Guangzhou on Thursday.

Ma said the government had set a flexible target for economic growth at “7 per cent or above”.

That compares with the province’s 7.4 per cent growth last year.

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“Given the persistently depressed global environment, and a challenging domestic economic situation at home, it was really not easy for Guangdong to achieve the current result,” Ma said.

Guangdong would seek to take investment in R&D to 2.65 per cent of gross domestic product, up slightly from 2.58 per cent last year.

The province also aimed to increase the number of corporations involved in high-tech innovation by 8,000, taking the total to 23,000 by year-end, Ma said.

As part of its drive to overhaul its economic foundation, Guangdong would focus on nurturing 20 large robotics manufacturing companies. The province will also launch pilot schemes to test robotics and digital based production plants.

Guangdong is set to spend 540 billion yuan (HK$608 billion) on infrastructure this year, a rise of more than 10 per cent, strengthening the transportation network and developing waterworks.

Commenting on the provincial work report, Professor Lin Jiang, a finance expert at Sun Yat-sen University, said setting a flexible target for growth gave Guangdong more room to focus on economic restructuring.

By setting higher spending goals for R&D, Guangdong was setting an example for other areas to take the sector as a serious source of growth. “Three years ago, Dongguan’s R&D only took up 1.5 per cent of its GDP ... [Guangdong] cities have a lot of catching up to do,” he said.

Chinese province Guangdong raises R&D target, turns to innovation to revive economy

But cross-border cooperation between the province and Hong Kong received scant attention in the report, apart from the listing of a few existing construction projects. Lin said Hong Kong’s turbulent political environment could be the reason collaboration was played down.

“There have not been any eye-catching highlights in cross-border collaboration in recent years. A direction seems to have been lost,” Lin said.

“Nothing ever gets realised effectively,” said Lin, referring to regional infrastructure projects such as the Hong Kong-Zhuhai-Macau Bridge and the cross-border high-speed railway project.