Recent years have witnessed Dongguan making forceful efforts to promote the upgrade of its processing trade enterprises. These efforts, which are outlined as below, were designed to tackle the numerous problems that confronting existing processing trade enterprises, such as a lack of core technology, market, R&D and proprietary brand, and the low-end OEM practice adopted by such enterprises. While vigorously building the policy support system, Dongguan took great pains to drive processing trade enterprises to move towards to two ends of the Smiling Curve, and shift its role from a production workshop to the enterprise headquarter.

Firstly, enhance the R&D capacity by building pubic innovation platforms. Toward this end, the special fund for upgrading processing trade enterprises and the special fund for the Technology-empowered Dongguan Program have been set up, which are dedicated respectively to spurring processing trade enterprises to set up R&D centers, technical centers, design centers and engineering labs, and supporting enterprises to enhance their research, design and product upgrade capabilities. Consequently, Dongguan has successfully built 10 public innovation platforms including the Guangdong Electronic Industry Institute, 11 professional & technical innovation platforms including the Humen Garment Design Center, and 57 enterprise-based engineering and technical centers at or above the provincial level.

Secondly, expand domestic market by putting up varied domestic sale channels. Dongguan supported the Dongguan Association of Taiwan Investment Enterprises to set up the T-Mark. Through integration of and collaboration among government, T-MARK, business association and the enterprise, Dongguan helped enterprises, small and medium-sized(SME) enterprises in particular, to build their own brands and expand domestic sales. A 5000-m2 Processing Trade Product Ordering Center has been constructed, which enables 100 SME enterprises to showcase and promote own-brand products all the year round. What’s more, local agents were cultivated to boost domestic sales.

Thirdly, improve operating efficiency by partnering with productivity coaching institutions from Taiwan and Hong Kong. Dongguan was the first in China to cooperate with productivity coaching institutions from Taiwan and Hong Kong for productivity-enhancing services, such as technology improvement, product design, management optimization, etc. In this connection, Dongguan has granted 100 million yuan in subsidy for such institutions to set up an office in Dongguan.

Fourthly, transfer some production processes out of Dongguan by building an industrial transfer park. The Interim Measures of Dongguan City on Subsidies for Encouraging Industrial Transfer has been introduced to motivate enterprises to move simple processing, assembly and other processes to the northeastern and northwestern parts of Guangdong Province while keeping their headquarters, and R&D in the city.

Fifthly, raise development increment by speeding up construction of the “Three Majors” Program. Following the strategy of Diluting stock with increment, Dongguan accelerated construction of major projects, major industrial concentration areas, and major science and technology programs (“the Three Majors” Program). On this basis, it aimed to continuously raise the growth increment through coordination between investment promotion and industrial upgrading.

Sixthly, create the optimal business environment and optimize the climate for industrial transformation. Dongguan reduced the burden on enterprises by 4.05 billion yuan in 2013 when the Dongguan municipal Party Committee and municipal People’s Government jointly issued two important documents titled Several Opinions of the Dongguan Municipal Party Committee and Municipal People’s Government on Comprehensively Raising the Level of the Open Economy and the Implementation Opinions of the Dongguan People’s Government on Further Reducing Burden on Enterprises and Optimizing the Business Environment. With improved business environment and reduced comprehensive cost on enterprises, Dongguan was able to create better conditions for enterprises to quicken transformation and upgrading.