using the off-the shelf technologies to build on the advantage of backwardness and upgrade their industrial structure in the past decades are successful examples (Lin, 2012).

The government needs to promote economic integration, enhance the mobility of labor and capital, and provide targeted support to vulnerable populations. This includes developing special regional policies to encouraging complementary regional development policies that recognize and build on the uniqueness of geographic and inherited economic comparative advantages. Facilitating the relocation of industries from PRD to the less developed regions in an appropriate manner can help accelerate the process and result in mutual benefits.

As the “double transfer” policies have started bearing fruits, local governments can closely follow the comparative advantages of factor endowment of the economy to accelerate the proper upgrading of the production structures of the Pearl River Delta and the lagging regions and better match the demand and supply of labor while supporting the creation of more and better jobs in the secondary and tertiary industries. This is to include a careful consideration of the difference in the factor endowment between the Pearl River Delta and the lagging regions, and also the heterogeneity among each of the two groups. The different patterns of development in different cities discussed above illustrate the uniqueness of their advantages (or disadvantages) driven by their first or second natures.

As the economy of Guangdong, particularly the PRD, is undergoing the upgrading of structure from labor-intensive to capital-intensive or technology-intensive industries to maintain competitiveness in the global market, the demand for skilled workers increases. Provision of on-the-job training and vocational skill training can play an important role in attracting labor and enhancing their quality, which is not only important for the sustainable economic development of the province but also the inclusiveness and harmoniousness of the society.

Building the skill level of the labor force, including the local labor force and the migrant labor force, can play an increasingly crucial role in the sustainability and inclusiveness of development. Compared with the older generation of migrant workers, the younger generation of migrant workers often places higher value in the provision of training opportunities and the potential of promotion when choosing jobs. The results of a survey conducted in 2006<sup>11</sup> showed that in the Pearl River Delta, vocational training helps to improve wages of migrant workers. To support development in a sustainable manner, the government needs to improve the skill level of the labor force to support the sustainable upgrade of production structure.

It is worth noting that, despite the deepening of reforms and improvement of labor market regulations, Hukou still plays a role in conditioning opportunities to jobs and beyond. With or without an urban household registration means significant difference in access to social services, including healthcare, education, and old-age pension. Recent studies have shown that in the urban labor market, there is discrimination against low-skilled migrant workers. Migrant workers are sometimes considered as "lower classes" in cities (Batisse and Selim, 2008; Solinger, 2004). Several studies confirm the existence of significant wage gaps between urban citizens and migrant workers with similar skills (Knight, etc., 1999; Meng and Zhang, 2001; Meng et al., 2007). A survey showed that the average income of migrant workers is only onethird of the average income of urban residents (Ministry of Labor and Social Security Research Group, 2004; Shao, 2006). Some studies suggest, after taking into account inflation, real wages of migrant workers actually declined (He, 2006). As the cost of living increased in urban areas

> 11 See <u>http://www.syntao.com/E_Page_Show.asp?Page_ID=6075.</u>

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