For more than three decades, Guangdong Province has been the country's manufacturing powerhouse, producing an array of goods for export. Not content with simply manufacturing, it is now moving to create cultural goods with the utmost imagination.

In recent years, Guangdong overwhelmed audiences nationwide with its mega-popular TV shows, Pleasant Goat and Big, Big Wolf and Latent, and emerged from the success as the cradle of China's cultural and creative industry.

To date, nearly 700 episodes of Pleasant Goat and Big, Big Wolf, a cartoon about a flock of sheep that play hide-and-seek with a wolf couple, have aired. The series has also been accompanied by two feature length films released during the Spring Festival in 2009 and 2010, which yielded a combined 230 billion yuan ($34.8 billion) at the box office.

And while the sheep-and-wolf story tickled toddlers and elders alike, the story behind Latent had more somber undertones. The TV drama focuses on two communist undercover agents as a couple who eventually fall in love but are separated before nationwide liberation in 1949. Latent was a reflection on China's trying history and moved many viewers to tears.

Aside from setting a new standard in film and TV production, Guangdong has also been energetically promoting distribution, media and publishing, game development and related derivative products.

For six years, Guangdong has led the rest of China in terms of cultural sector output, making up one fourth of the national total since 2004. The province reaped an industrial value-added of 227 billion yuan ($ 34 billion) in 2009 from the sector, accounting for 6.4 percent of its total GDP. It also ranked first in China in terms of the number of sector employees and companies, as well as per-entity industrial value-added and per-entity revenue.

Guangdong's ambitions don't stop within China's borders—the province wants to play a bigger role in promoting the country's cultural brands to the world. In July, officials worked out a blueprint with 10 major projects, pledging 25 billion yuan ($3.8 billion) to build a "culturally strong" Guangdong in the next five years (2011-15).

"Through the campaign, we want to forge a competitive cultural sector that matches our province's economic power, offers citizens easier and diversified access to public cultural facilities, and promotes the tradition of respecting knowledge and upholding human values," said Wang Yequn, Deputy Director of the Cultural Department of the Guangdong Provincial Government and Director of the Guangdong Cultural Industry Promotion Association.

Guangdong's economic power, manufacturing strength, flourishing private investment and geographical superiority will undoubtedly help the province develop its cultural and creative industries, Wang said.

More than half of Guangdong's cultural companies in 2009 were private, and private investments dominated the DVD, film and TV industries.

Guangdong, bordering Hong Kong and Macao and with nearly 20 million emigrants, enjoys a long history of frequent cross-cultural exchanges, which have inspired local residents to import foreign elements for cultural innovation, he said.

In addition, the Guangdong people are flexible, pragmatic, open-minded, sensitive to business opportunities and eager to try new things. That's why Guangdong was selected as a pilot area for China's reform and opening-up experiments, he said.

"'Mind emancipation' and 'reform and opening up' are the epitome of both Guangdong's modern spirit and traditional values," he said.

Modeling itself after Silicon Valley in the United States or Bangalore in India, Guangdong has created many pilot areas or industry clusters for different cultural and creative industries. A number of companies and corporations capable of independent innovation are growing in the province thanks to available resources and preferential policies. The Knowledge City in Guangzhou, an incubator-like project between Guangzhou and Singapore, for instance, is positioned to lead China's development of knowledge-intensive industries.

"Industry-cluster development features Guangdong's cultural industry, which is innovation-propelled and relies heavily on hi-tech applications," said Wang.

So far, Guangdong has officially launched two industry clusters: one for video game and entertainment production in Zhongshan and Guangzhou, and the other for cartoon and animation toys manufacturing in Shantou.

The Guangzhou-Zhongshan cluster hosts 500 manufacturers, which export more than 60 percent of their products to countries and regions in North America, the Middle East and Southeast Asia. Their 2009 output value exceeded 8 billion yuan ($1.2 billion).

And the province has encouraged hi-tech application and innovation in content, production and dissemination in the cultural sector. Independent innovation, in particular, is extremely valuable. The Shenzhen-based Fantawild Holding Inc., for instance, holds about 100 patents and is China's first exporter of hi-tech theme parks.

"But for its decade-long pursuit of independent innovation, Fantawild could have ended up being one of those original equipment manufacturers now struggling for survival at thin profit margins, had it not started in Guangdong," Wang said.

Still, Guangdong's cultural sector has to acquire core competitiveness through innovation and cultivating known brands, he said.

Guangdong's cartoon and animation industry values originality, Wang noted. It also leads the country in developing cartoon derivatives and publishes 30 percent of China's original comic books.

Even so, a large number of companies in the industry still focus on low-end manufacturing. Creative Power Entertaining, creator of Pleasant Goat and Big, Big Wolf, is a rare example of a company building a framework and securing the market with only creativity.

"If we are able to combine our manufacturing expertise with cartoon design capabilities, our cartoon and animation industry will reach new heights," Wang said.