The cities of Shenzhen, Zhuhai, Dongguan and Shunde have for the past decade been regarded as the factories of China. In 2000, the delta accounted for 34 per cent of China's total exports and 30 per cent of its FDI. Just over half of the FDI in the delta -- US$170 billion of the US$348 billion total -- as of the end of 2000, came out of Hong Kong entrepreneurs' pockets.

Much of this money was initially used to finance production lines to churn out cheap, labour intensive products. But over the years, the delta has been moving towards mid- to high-end products.

According to Shenzhen Vice Mayor Guo Rongjun, the city's exports of high-tech products accounted for one-fourth of all high-tech output in China. Over the next five years, Shenzhen will spend more than 100 billion yuan (about HK$93.7 billion) to further expand its high-tech industry zone.

About 3 per cent of the city's GDP will be invested in R&D to fund projects to develop home-grown technologies which are becoming less dependent on foreign technology transfers. "Last year, our patent applications were the third highest in China, only after Beijing and Shanghai," he said. "As a result, about 52 per cent of the high-tech products that we manufactured had local patents."

Other key cities in the delta are also looking to reposition themselves as high-tech, information technology powerhouses. During the cities forum session at the PRD Conference, vice mayors of Shenzhen, Zhuhai, Dongguan and Shunde all unveiled their high-tech visions for their cities.

Dongguan Vice Mayor Zhang Shun-guang said he plans to expand cooperation with Hong Kong and international cities to attract more investment as part of its plans to become an international city.

Dongguan will remain a strong manufacturing base for many years to come, but the city will strive to upgrade its industries to produce high-value goods, he said. Out of the estimated 13,600 foreign-invested export-processing firms in Dongguan, about 2,800 are IT firms which exported US$8 billion worth of high-tech products last year, he said.

Executive Deputy Mayor of Zhuhai, Xian Wen, said his government is trying to attract more IT talent to study and work in Zhuhai through co-operating with universities around the country.

"Zhuhai is regarded as one of the most romantic cities in China, and conservation of its environment has created a very attractive living environment," he said. "That is why we believe we will be able to attract quality talent to live and work here."

Closer integration with other cities in the delta, not least Hong Kong and Macau, will play a crucial role in making this vision a reality.

"Stepping up development and cooperation with Hong Kong and Macau will achieve the win-win situation that we are all aiming for," he said.

Shunde Vice Mayor Liu Zhixing echoed his comments and urged all cities in the delta to create a formal mechanism to co-ordinate economic integration of the Pearl River Delta.

With each city aspiring to become a producer of high-tech goods, there is the obvious danger of each area competing against the other for investment, resources and talent. But the spokesmen for the four cities played down any rivalry, saying each city would complement the other.

Mr Liu, however, said government authorities had a key role to play in steering the delta on its new course of development to avoid duplicating the efforts of others, which would lead to massive waste of money and resources.

Because the economic boundaries of cities in the delta, including Hong Kong and Macau, now overlap, he proposed that a formal mechanism be set up to kick start co-ordination of economic development in the region. The mechanism would help local governments strengthen communication, share information and improve co-operation.