Opportunities abound in Guangdong for local companies: IE Singapore

Guangdong is one of the largest manufacturing bases in China with capital Guangzhou and economic hub Shenzhen particularly prosperous.
Guangdong is one of the largest manufacturing bases in China with capital Guangzhou and economic hub Shenzhen particularly prosperous.PHOTO: REUTERS

SINGAPORE - The explosive growth of the southern Chinese province of Guangdong offers opportunities for local firms in manufacturing services and technology, said government trade agency International Enterprise (IE) Singapore.

Guangdong is one of the largest manufacturing bases in China with capital Guangzhou and economic hub Shenzhen particularly prosperous.

It has moved towards innovation over the years to drive economic restructuring, noted Guangzhou-based April Oh, regional director for South China at IE Singapore.

Firms from Singapore can complement these changes by offering advanced manufacturing and intellectual property services while hardware start-ups can tap Shenzhen's capabilities to grow, she told The Straits Times in a recent interview.

Ms Oh noted that Guangdong is facing challenges in upgrading its manufacturing facilities and firms have said productivity "is probably only a quarter of what developed countries can achieve".

IE Singapore noted the Guangdong government plans to spend US$143 billion supporting the robotics, advanced manufacturing and modern services industries.

Here is where Singapore firms can jump in to provide solutions. The Singapore Manufacturing Innovation Centre - in what is called the Sino-Singapore Guangzhou Knowledge City - was set up in Guangzhou in August for that purpose.

Local tech firms such as motion control specialist Akribis Systems and SESTO Robotics have already opened offices there.

Ms Oh said: "We want our firms to partner the Chinese, and co-create and sell solutions to manufacturers. The physical location is important so firms are plugged into the market and are able to provide after-sales services and such.

She noted more money is being pumped into research and development (R&D) in Guangdong - R&D is now 2.58 per cent of its gross domestic product, compared to 1.9 per cent in 2013.

Also, low-end manufacturing is being relocated owing to increasing costs, especially in the Pearl River Delta region "where low-end textile, food manufactures are being shifted further out in Guangdong or even to nearby provinces", she said.