Foreign businessmen and local academics are saying that if Guangdong province wants to be internationally competitive, it needs to boost education in technology and the sciences, improve its infrastructure and go beyond mere manufacturing.

Mr Dinesh Paliwal, executive vice-president of the Zurich-headquartered ABB Group and one of the 27 foreign economic advisers appointed by Guangdong Governor Huang Huahua, said Guangdong should progress from manufacturing to activities such as research, design and sourcing. He urged the province to work with Hong Kong, which has strengths in production services, to prepare for competition from Asean, which is moving towards a free-trade grouping, also suggesting that it invest more in its basic infrastructure.

Another adviser, Professor Hans-Jorg Bullinger, president of Germany's Fraunhofer-Gesellschaft, an engineering research organisation, said: "If Guangdong went ahead to develop the automobile and other heavy industries, the province should also develop supporting industries for these sectors." Professor Ren Jiantao of Zhongshan University suggested that Guangdong, which prospered on labor-intensive light industry and has turned to sectors like electronics and information technology for more growth, could sharpen its edge if it cultivated more talent in technological fields. "Guangdong lacks such manpower and must increase training in its schools and universities of such talent," he said.

Hong Kong will be watching closely Guangdong's actions, as the territory could hollow out further if the province develops its own production services now mainly provided by Hong Kong firms.