Innovation at the heart of Guangdong's economic growth
The economic growth of South China's Guangdong province reached 16.2 percent in 2015, making the province the first in China in terms of the economic aggregate for 25 consecutive years, according to Guangdong provincial officials.
The positive transformation of Guangdong's economic structure is beneficial to the rapid and stable economic growth of the province, according to Yao Lu, head of the treasury department of the provincial finance bureau.
Yao also highlighted that innovation is the key behind the economic structure transformation, which also contributes significantly to the nearly trillion-worth of economic aggregate of Guangdong.
Latest statistics from the provincial government show that Guangdong's tertiary industry accounted for more than a half of the whole industrial share in 2015. Meanwhile, values added to advanced and high-tech manufacturing industries, both innovation-driven industries, have exceeded 75 percent of the total added values for industries above the national designated scale.
"Guangdong is an early player embracing the economic transformation and upgrade. This has stimulated the maturity of a dozen technological and innovation-based enterprises, which have made considerable contributions to the tax," said Yao,"After the economic structural adjustment and optimization, the ability to resist risks and setbacks in the economy has been much improved, especially when it comes to economic downturn."
Take multinational telecommunications giant, Huawei Technologies, as an example. The Guangdong-based company netted 288.1 billion yuan ($43.79 billion) in revenue and contributed 30 billion yuan in tax in 2014. In 2015, when the global economy struggled, Huawei surprisingly gained 400 billion yuan in revenue, increasing by 35 percent compared to 2014. Tax contributed by the company accordingly soared, providing significant benefits for the provincial economy.
Dongguan-based Huawei Device has become a dark horse in the high-tech field, ranking first among local enterprises in terms of operational revenue and tax contribution.
Guo Ping, senior official of Huawei attributed the company's good performance to the surging shipment of smart phones. The shipment of smart phones from Huawei has grown to more than 100 million units, making the high-tech enterprise the third biggest global manufacturer.
"The rapid development of modern service industry is becoming Guangdong's new growth point for economy and tax," said Chen Xuezhu, an official of Guangdong State Administration of Taxation.
Chen explained that till now, the tax from innovation-driven producer services, high-tech and advanced manufacturing has accounted for half of the total tax of the province. And 90 percent of the tax increase originates from the aforementioned aspects, which have contributed 14 percentage points to the increase.
Wang Jingdong, chief finance officer of Gree, China's home appliance giant headquartered in Guangdong's Zhuhai city, pointed out that under the same tax system, the tax generated by GDP is the reflection of the economic quality and effectiveness of a certain area. It is also regarded as the exclusivity of a certain economy.
"Gree has been able to achieve more than hundreds of billions yuan in sales like other enterprises but it also exceeds tens of billions yuan both in net income and tax. Profitability and tax-paying represents the innovative ability of an enterprise," said Wang.