Innovation makes domestic brands more competitive

Chen Hailun got a confidence boost when his company's products were classified as upper-level consumer-grade pianos in the latest issue of Piano Buyer magazine.

"This means Chinese brand Hailun has become one of the most popular brands in the global piano market," said Chen, board chairman of Hailun Piano Co., Ltd, based in Ningbo, a city in east China's Zhejiang Province.

Zhejiang was at the forefront of China's reform and opening up drive over 30 years ago. Today, the coastal province known for its booming private sector is home to a large number of companies like carmaker Geely and shoemaker Aokang. And, after years of restructuring and innovation, Hailun can count itself among the province's most successful enterprises.

Hailun initially produced piano parts for domestic and overseas brands. In 2005, the company began to establish its own line of pianos, with a powerful research team of both Chinese and foreign experts.

Last year, the company sold more than 22,000 pianos both at home and abroad, and in June, the company listed on the Shenzhen Stock Exchange.

"Technology brings remarkable economic interests. There will be no quality products without good research staff, and a company will be in danger if it has no brand of its own," said Chen.

Amid the global economic slowdown, some private manufacturing companies in China have been relying on upgrading and product innovation to be more competitive.

Geely, which acquired Volvo Cars in 2010, saw sharp export growth this year, despite the general slowdown of China's foreign trade, which is partly due to weakened demand from the crisis-plagued European and U.S. markets.

In the first 10 months, Geely exported more than 80,000 cars, up 190 percent year on year. High-quality brands like Emgrand accounted for 40 percent of the company's exports, according to the Hangzhou-based carmaker.

"By strengthening research and development and upgrading its products, the strategic transformation has built up the core competitiveness of Geely," said Yang Xueliang, director of public relations of Zhejiang Geely Holding Group Co., Ltd.

Yang added that the company will continue to promote its own advanced technologies to make cars more energy-efficient and environmentally friendly. He forecast about 30 percent annual growth for the company's overseas exports in the next three to five years.

Chen Rufang, deputy director of the Zhejiang Provincial Commerce Department, said the government will encourage enterprises to exert more efforts in research, design and upgrading in line with global demand and enhance their competitiveness in technology, branding and quality.

Zhejiang aims to double its investment in research and development in 2015 from 2010 to make it account for 2.5 percent of the province's gross domestic product, according to the provincial science and technology department.

The province will carry out pilot projects for industrial technological innovations and build more than 50 state-level innovative companies by 2017, according to the department.

"Chinese companies should work to change the structure of their exports. The days when everyone introduces technologies to catch up with others are gone," said Zhuang Jian, an economist with Asian Development Bank.

"To deal with the domestic economic transformation and global slowdown, companies should invest more in research, improve management, enhance innovative capacities and increase the added value of products," he said.