"The past two decades have witnessed swift development of China's economic and technological development zones, with their major economic indicators growing at an average annual rate of 25 percent," said Bo Xilai, Minister of Commerce. "In particular, national-level development zones have become the pioneer of reform and opening-up, as well as the growth point of regional economic development."

Transformation is a must

"However, currently development zones are faced with difficulties and challenges," said Li Yong, Director of the Administration Committee of the Tianjin Economic and Technological Development Zone. "It will be hard for us to continue development just by following the development pattern of depending on introducing foreign investment and technology with favorable state policies, low production costs and competing in the low end of international industrial chains," Li added.

Moreover, most of the manufacturing industries in development zones lack independent technologies for turning out brandnames. In Jin's opinion, the industrial structure in China's development zones needs to be adjusted since the manufacturing industry lacks key components and production links, while the existing service industries tend to register low added value.

Openness, innovation and service are the three medicines prescribed by Bo. In his opinion, openness means to actively attract transnational companies to set up research and development centers, foster industrial convergence and receive the support of high-quality international industries. Reformation of the administrative licensing and management mechanisms is required in order to better connect foreign technologies and independent innovation.

According to Jin of the Ministry of Commerce, China's development zones should optimize their export structure, export destinations and product mix, and expand their exports of technologies and services. They should expand their overseas markets, increase the number of export destinations and encourage domestic companies to cooperate with transnational commercial chain networks. Exports of hi-tech and electromechanical products and other products with high added value should be expanded in order to speed up the transformation of the export growth pattern. Moreover, development zones should exploit overseas markets of technology and service industries and increase their proportion of service exports.

"National-level economic and technological development zones should become important bases for receiving hi-tech and high-added-value manufacturing links transferred by transnational companies, as well as their research and development centers and service outsourcing," according to the goal set jointly by the Ministry of Commerce and the Ministry of Land Resources for national-level economic and technological development zones during the 11th Five-Year Plan (2006-10) period. "By the end of 2010, the total industrial output value of all the national-level development zones shall reach 5.1 trillion yuan with an average annual growth rate of 17 percent. The output value of hi-tech enterprises shall arrive at 2.3 trillion yuan with an average annual growth rate of 20 percent."

According to Vice Minister Yu, to strengthen the implementation of the strategy of revitalizing trade through science and technology, the Ministry of Commerce and the Ministry of Science and Technology have decided to take three years, as of 2006, to set up 100 national export innovation bases and a batch of industries with self-innovation capacities.