Analysis of Industrial Evolution and Economic Development Trends in the Pearl River Delta

Abstract: Since the reform and opening up, the Pearl River Delta (PRD) has developed rapidly and become one of the leaders in national economic development by virtue of its unique geographic advantage of being adjacent to Hong Kong and Macao, as well as the strong support of relevant policies. For this reason, it is of practical significance to discuss the industrial evolution of the PRD since the reform and opening up, the problems existing in the industrial structure of the PRD nowadays, and the trend of future economic development.

First, the development of industrial structure in the Pearl River Delta (PRD)

The industrial structure refers to the proportional composition of the factors of production among the various industrial sectors of the national economy, as well as their interdependence and mutual constraints. Industrial structure is a system that includes the composition and status of the various sub-systems (i.e. industrial sectors) that make up the system, as well as the interconnections and interactions among the sub-systems.

(1) Overview of the evolution of industrial structure in the Pearl River Delta (PRD)

The industrial structure of the PRD has always maintained the pattern of "two, three, one", with the manufacturing industry occupying an absolute dominant position, with the proportion of the three major industries at around 50%, which is the main driving force for the economic development of the PRD. The proportion of the primary industry has been declining, falling to less than 10% in 1995. The tertiary industry, on the other hand, has been maintaining a good upward momentum.

Overall, the industrial structure of the PRD is dominated by the secondary industry, which has been continuously adjusted and optimized, and has so far reached the mid-to-late stage of the mid-industrialization period, which is in line with the general law of the evolution of modern industrial structure.

(II) Rapid development of the tertiary industry (1978-1990)

Since the reform and opening up, the service industry in the PRD has been developing rapidly, while the proportion of the primary industry has been declining, and the manufacturing industry has maintained a large proportion of advantageous and stable development. Until 1990, the proportion of the service industry was close to that of the manufacturing industry, and the number of people employed in the three industries was close to that of the manufacturing industry.

The rapid development of the service industry during this period was due to the institutional innovation after the reform and opening up, and many Hong Kong businessmen came to the mainland to talk about business, which led to the development of the service industry in the Pearl River Delta. A typical example is the White Swan Hotel in Guangzhou, which was the first five-star hotel in China with Chinese-foreign cooperation, and has been hailed as a successful example of reform and opening up.

The gradual reduction in the scale of agriculture is mainly due to the increase in government support for the secondary and tertiary industries, the establishment of a large number of factories, and the contradiction between land and people caused by economic development, which has resulted in a large number of laborers separating from agriculture, reducing the scale of agriculture on the one hand, and providing a large number of laborers for the manufacturing and service industries on the other hand, which has resulted in the expansion of the scale of the secondary and tertiary industries.

In these 12 years, the PRD has achieved the initial stage of economic development and industrial upgrading, shifting the center of development from agriculture to manufacturing and service industries, and the reform from pilot to full-scale promotion, driving the development of the PRD economy.

(III) Stage of Accelerated Development of the Secondary Industry (1991-1995)

During this period, the PRD economy developed rapidly and overheated, with GDP quadrupling in five years from 101.05 billion yuan in 1991 to 407.547 billion yuan in 1995. This was mainly attributable to the rapid development of the secondary sector and the increasing level of industrial modernization. The tertiary sector was slow to adjust its internal structure, and the development of the production-oriented service industry, which serves as a complement to the manufacturing sector, lagged behind the process of industrial modernization, resulting in a widening gap with the secondary sector. The proportion of primary industry continues to decline and remains below 10%.

This period coincided with the global industrial transfer wave, and the industrial transfer from developed countries was on the rise. In particular, Hong Kong's investment in the Pearl River Delta (PRD) entered into a full-scale operation after an initial trial period, forming the mode of "store in front and factory at the back".

(4) Adjustment and Development Stage (1996-present)

The industrial structure continued to maintain the pattern of "two, three, one", with the primary industry declining to less than 5%, the secondary industry continuing to occupy an absolute dominant position, and the tertiary industry maintaining an upward momentum.

With the implementation of the national macro-control policies in 1995-1996, the overheated economic development of the PRD was curbed and the GDP growth rate gradually declined. With the return of Hong Kong and Macao, the PRD ushered in a new period of stable development. The continuous progress of economic strength has changed the upgrading of industrial structure from policy regulation to endogenous and autonomous promotion.

Second, the existing problems of the industrial structure of the Pearl River Delta (PRD)

Although the industrial structure of the PRD has been undergoing continuous structural optimization, there still exists a structural imbalance of the industrial hierarchy within the secondary and tertiary industries.

(1) Unreasonable internal structure of the manufacturing industry

The Pearl River Delta (PRD) has always been known as the "Factory of the World", which is well known for its well-developed processing and manufacturing industries. However, this has led to a small number of enterprises in the Pearl River Delta mastering high-end technology, most of which are low-end processing enterprises, the most typical of which is the "three to one complementary", with low technological content, small value-added, and at the expense of cheap labor and resources are its labels.

(2) The tertiary industry is still dominated by traditional service industries

Although the proportion of service industries in the PRD has been close to 50% in recent years, the value-added of these industries has not yet reached the desired standard. In the tertiary sector, traditional services still dominate, and high-end services such as finance still need to be further developed.

Third, the development trend of PRD industries

In the face of the existing problems, the PRD obviously needs industrial optimization and upgrading.

(1) Vigorously develop advanced manufacturing industries

By continuously optimizing the structure of foreign investment, the PRD will vigorously develop advanced manufacturing industries and hi-tech industries with strong ability to drive industrial radiation and technology spillover, and drive the optimization and upgrading of the processing trade industry. Let the Pearl River Delta (PRD) actively undertake a new round of international industrial transfer, and attract multinational corporations, especially the world's top 500 enterprises, to transfer processing and manufacturing processes with higher technological levels and higher value-added rates to Guangdong Province.

(ii) Encourage technological progress

Processing trade enterprises are encouraged to upgrade equipment, introduce technology and conduct research and development of new products. Foreign-invested, processing trade enterprises to create brands, technological innovation, the establishment of R & D institutions and the import of research and development of instruments and equipment required to give some financial support. Processing trade enterprises R & D institutions to hire R & D personnel, to enjoy the enterprise location of the introduction of talent-related preferential policies.

(C) tree brand

In China, many enterprises are mainly OEM, especially the Pearl River Delta, but also so that the "world factory" reputation, and the disadvantages of OEM are equally obvious, the lack of independent brands, low gross margins, the right to speak a small bargaining power is poor, the decline in orders is also a huge impact on the enterprises. Has a huge impact on these enterprises, and to stay on their feet, the creation of their own brand is obviously essential. FY Furniture Co., Ltd. in Zhongshan, for example, in the past five years, in order to fight for autonomy, the company is committed to building their own brand - "FY". To this end, the enterprise invited a large number of designers to form a product development team, for the "FY" brand to do a lot of packaging design, and then to the market. And this brand to participate in major exhibitions, including the Sixth International Hotel Exhibition, Shanghai International Hotel Expo, to publicize its brand. In addition, in August 2012, the establishment of "FOOKYIK Designer Elite Association", widely called the national excellent designers to join, in order to enhance brand awareness.

(D) actively develop modern service industry

Prioritize the development of international service outsourcing, focusing on attracting investors from developed countries and regions to invest in software development, industrial design, technical services and other industries in the province, and vigorously cultivate service outsourcing professionals. Vigorously develop productive service industries, reduce market access thresholds, increase investment in the field of service industries, and cultivate a number of intermediary service organizations with credibility and competitiveness at home and abroad. Strengthen the depth of cooperation between Guangdong and Hong Kong service industries, and provide basic services for the transformation and upgrading of processing trade.

(V) Promote the development of service industries in small and medium-sized cities

As can be seen from the table of the industrial structure of the PRD cities, the service industry is mainly concentrated in the two megacities of Guangzhou and Shenzhen, while the proportion of the service industry in small and medium-sized cities, such as Zhongshan and Jiangmen, is obviously much lower, so that the government can support the small and medium-sized service-oriented enterprises and promote the development of the service industry.

In summary, the Pearl River Delta still plays an irreplaceable role in the future economic development, and will continue to contribute to China's economy!

References:

[1] Shang Lei. Evolution of industrial structure in the Pearl River Delta and analysis of its influencing factors

[2]Wang Guangjun. Study on the evolution of industrial structure in the Pearl River Delta

[3]Shi Zhongliang. Industrial Economics [M]

April 12, 2018 in Kungong.

Pan Xianfeng

Water Resources and Hydropower Engineering 162

201610210203