NewChina’s economic powerhouse Shenzhen banks on R&D to bring it to greater heights after achieving 8.9 per cent growth last year

The Chinese city of Shenzhen in southern Guangdong is banking on research and development to expand its economy to 2.6 trillion yuan (HK$3.08 trillion) by 2020, or roughly 1½ times its size last year.

The city is aiming for 8-8.5 per cent growth this year after posting 8.9 per cent growth to reach 1.75 trillion yuan in 2015, mayor Xu Qin said at the opening of the municipal people’s congress on Saturday.

Xu said last year’s 8.5 per cent growth target was surpassed largely thanks to innovation-driven industries like the internet and IT, which accounted for 40 per cent of gross domestic product.

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

More than 17,000 polluting or low-end labour-intensive factories have been shut down since 2011 to make room for the emerging sectors, the government said.

Since 2013, Shenzhen has invested more than 4 per cent of its GDP annually in R&D, putting it on a par with South Korea and Israel.

Guangdong, which relies heavily on traditional manufacturing, spent only 2.5 per cent of its GDP on R&D last year, above the 2.1 per cent national average for 2014 and the 0.7 per cent outlay by Hong Kong in recent years.

According to Shenzhen’s 13th five-year plan, released on Saturday, more than 110 billion yuan – or 4.25 per cent of its annual GDP – will be earmarked for R&D by 2020.

By the same deadline, six emerging industries – the biotechnology, internet, new energy, new materials, IT and cultural and creative industries – will expand to account for 42 per cent of the city’s GDP.