The manufacturing sector remains the pillar of economic growth in the Yangtze River Delta, thanks to booming development by private and foreign-funded companies and increasing investment in research and development. Corporate investors also shell out a large amount of funds on marketing.
The yangtze Delta at the mouth of the Yangtze River, covering Shanghai, the northern part of Zhejiang Province and the southern part of Jiangsu Province, comprises only 1.04 percent of the country's land, but its gross domestic product is three times the national average.
The yangtze Delta is traditionally strong for its manufacturing sector - three out of 10 mobile phones in the world are manufactured in the region, Xinhua news agency reported.
Shanghai, known as the region's economic locomotive, still takes the lead in the area's manufacturing development, followed by Zhejiang Province, home to thousands of booming private export-oriented firms.
Manufacturing companies in the Yangtze Delta region set aside an average of 11.63 percent of sales for R&D, our survey shows. Companies in Shanghai spend 12.21 percent of revenue on research and development while those in Zhejiang and Jiangsu use 11.44 percent and 11.55 percent respectively.
This is a good sign. Chinese companies, particularly those based in the Yangtze Delta, took advantage of inexpensive labor to drive economic growth in past years.
But an industry mix adjustment is needed as the governments hope to make locally manufactured goods more value-added.
Shanghai also spearheaded the move to upgrade its products.
In the 1990s, the country's blockbuster products such as garment and leather goods lost their luster as new industrial zones started housing hundreds of powerful companies such as chip makers and chemical giants.
The city government drafted a plan to enhance the competitiveness of its manufacturing sector earlier than other parts of the country.
In the late 1990s, the city posted a swelling trade deficit, bucking the national trend of increasing trade surpluses.
The city imported a large number of advanced and technology-intensive manufacturing facilities which would eventually help generate more expensive goods.
For the region, spending on R&D in the manufacturing of medicine, electronics and telecommunications are 4.2 percentage points more than the national average.
The manufacturers of medicine set aside 15.768 percent of sales while electronics and telecommunications firms spent 14.39 percent.
Although most of the manufacturing companies in the Yangtze Delta are small and medium-sized and labor-intensive, the region is home to a great number of capital-rich high-tech companies.
The high-tech firms are the growth engine for the region's future development.
In shanghai, more than half of the city's exports are generated by foreign-funded firms.
Indeed, foreign funds are given a high profile in the region's development.
Foreign-funded companies in the region reported stronger performance than state-owned and private companies as they are more sensitive to the ups and downs in the market.
Foreign companies also attach greater importance to research and development.
Despite their willingness to invest immensely in marketing, they make huge efforts to minimize the costs while making full use of productivity.
More importantly, foreign-funded firms have brought in management expertise that fostered the growth of local counterparts.
Since the region still has an edge in manufacturing, the sector has a bright future.
Take zhejiang for instance, total output values of the province's manufacturing sector accounted for more than 10 percent of the national level as early as 1998. Shengzhou, a city in Zhejiang, now manufactures 280 million ties each year, accounting for 20 percent of the total made worldwide.
Now 232 industrial products manufactured in Zhejiang hold the biggest market share in the country. Each product rakes in an annual sales volume of more than 50 million yuan. Of the 232, 140 products occupy more than 40 percent of the national market share.