Hong Kong Manufacturing SMEs: Preparing for the Future

29markets. 71This included helping SMEs to jointhe marketing networks of leading enterprises,making use of Guangdong commercial associationsto provide SMEs with greater access to nationalmarketing networks, to provide special funds forSMEs that have national “famous products,” and tosupport SMEs to help them develop products andservices that are suitable for China’s rural markets.In January 2010, the Guangdong Governmentinstituted a strategy to help SMEs expand domesticsales and develop advanced manufacturingcapabilities. 72In March 2010, the GuangdongGovernment published a policy to further supportthe development of SMEs by unifying market entrystandards and opening the market for privateenterprises to industries with high profit, such aspower, telecommunication, petrochemicals, andfinance. 73Perspectives on the Direction of Policy for thePRDThe most striking feature of the NDRC documentis that it starts with a short description of thesuccess of the PRD and its development over thelast 30 years and then has a much longer sectionderiding the development model that generatedthis success in the first place. The PRD pastdevelopment model is criticised as being low-valueadding, low-technology, labour-intensive, resourceintensive,overly dependent on exports and foreigncompanies, and environmentally and sociallyunsound. The rest of the document outlines anapproach for a radically different economic modelgeared more to replace the previous model than tobuild on and extend its successes.has been quoted as saying that it is time for“emptying the cage for new birds to come in.” Thiswould involve letting go or pushing out many of theHong Kong and Taiwan invested SMEs that havebeen lynchpins of Guangdong’s development sincethe 1970s. 74While aiming to combat the financial crisis, it isclear that the Guangdong Government remainscommitted to its plans for industrial restructuringand upgrading. A trial of programmes for thetransformation and upgrading of export processingenterprises was begun in Dongguan in 2008. InApril 2010, the programme was extended to therest of the PRD with the exception of Jiangmen. 75These cities will promote processing tradeenterprises to make breakthroughs in independentinnovation, indigenous brand development, researchand development, domestic market penetration,establishing and improving marketing networks,and industrial upgrading.71 Opinions on Helping SMEs to Expand into Domestic Markets(Yue jingmao zhongxiao ju [2009] no.326, 23 April 2009)72 Decision of Guangdong Provincial Party Committee andGovernment on Implementing the Strategy of ExpandingDomestic Demand (published on 15 January 2010)73 Opinions on the Implementation of Opinions of the StateCouncil on Further Promoting the Development of Small andMedium Enterprises (Yue fu [2010] no. 39, 25 March 2010)74 Cong Cao, “Emptying the cage for new birds to come in,”UPI Asia, 17 February 2009.75 Circular on the List of Key Cities to Deal with theTransformation and Upgrading of Processing TradeEnterprises (Yue ban han [2010] no. 198, 12 April 2010).The NDRC document and the subsequentdiscussions on PRD development give a mixedmessage to Hong Kong and its firms. On theone hand, further cooperation and interactionwith Hong Kong is viewed as important for thePRD development. On the other hand, the policydirection appears to provide little space for HongKong manufacturing SMEs in traditional industries.Indeed, Guangdong’s Party Secretary Wang Yang