South China's Dongguan City recorded 8percent GDP growth in 2015, as the production base for mobile phones and garments shifted to innovation and technology to take up the slack of traditional manufacturing.
Despite facing "particularly harsh economic conditions," the city's GDP reached 628 billion yuan (96 billion U.S. dollars) last year, said mayor Yuan Baocheng while reporting to the city's annual legislative session on Wednesday.
Dongguan is a leading producer of garments and digital gadgets in China, and its economy has long been seen as a barometer of the whole manufacturing sector.
Growth of 8 percent outpaced the national average of 6.9 percent in 2015 and with 7.8-percent growth in 2014, the city remains a powerful economic engine, now partly fueled by technological start-ups.
Yuan said the number of high-tech companies in the city has tripled over the past five years, and contributions made by advanced manufacturing and high-tech manufacturing to local GDP rose by 7.4 percentage points and 10.9 percentage points in 2015.
The report also projected annual growth of 8 percent between 2016 and 2020.
NORMAL METABOLISM
Dongguan and the province of Guangdong have been national paragons of shifting from low-end to high-tech to maintain economic growth.
The process has been accompanied by closures of some foreign-invested factories, which local officials described as a "normal metabolism" as less profitable factories are replaced by more competent ones.
Feng Jian, deputy director of the city statistics bureau, said there was no "massive waves of factory closures." Some 362 foreign firms closed or moved out in 2015, the lowest number in four years. They accounted for only 5 percent of the city's total foreign companies, he said.
"Meanwhile, the city registered 550,000 new enterprises, up 20 percent year on year. The new market players have brought vibrancy to the city's economy," Feng told Xinhua.
"Once a factory closes, new companies will compete to rent the site," said Hu Boshan, vice president of Dongguan-based smart phone maker Vivo.
Responding to reports of an exodus of foreign investments, Feng said the city's foreign investment inflow actually rose by 17.5 percent in 2015. While some foreign capital left the low-end, those entering sci-tech and finance increased by 135 percent and 696 percent.
China's foreign investment inflow climbed by 6.4 percent in 2015. Multinational giants are stepping up, not slowing down, their expansion in China. Volkswagen, Intel, Samsung and many other Fortune Global 500 companies each invested over 100 million U.S. dollars last year.
