When a recent sex trade crackdown brought Dongguan under the spotlight, Internet users launched an online campaign featuring its glories.

On micro blogs and online forums, people have uploaded and forwarded photos of the Chinese city, representing it as "The Factory of the World" in the booming southern province of Guangdong, revealing its history as it developed from a fishing village to a manufacturing and logistics behemoth.

"The Dongguan You May Not Know" called for local residents to be proud of their city and to tell the world about it.

"We produce one-fifth of the world's digital products; we destroyed the country's opium here; we topped the Chinese Basketball Association league eight times; we attracted 10 million migrants..." said captions of the photos uploaded when the city was mocked as China's "sex capital" after prostitution busts and huge media exposure on Sunday.

But experts warned the crackdown on prostitution shows an urgent need for the local government to accelerate its economic restructuring.

"The effort should not only target its traditional manufacturing but also the services industry," said Lin Jiang, head of the public finance and taxation department of Lingnan College at Sun Yat-sen University.

Dongguan, about 140 kilometers from Hong Kong, has faced a difficult task reorganizing its industrial structure since the eruption of the 2008 global financial crisis, according to Lin.

Dongguan's economy grew by 9.8 percent year-on-year to 550 billion yuan ($90.7 billion) in 2013. However, the city had the lowest economic growth rate for four years before last year because of industrial restructuring, compared with other cities in Guangdong province.

"The higher economic growth rate in Dongguan last year was mostly driven by investment in a large number of projects. The manufacturing sector was still on what has been a harsh road of recovery," Lin said.

Dongguan, in the heart of the Pearl River Delta, has more than 8 million permanent residents, but only 1.87 million of them are locals with household registrations, sources within the local government said.

"Booming manufacturing attracted millions of workers from all over the country and has helped make it one of the foreign trade leaders in China since the country's opening-up and reform," Lin said.

Xinhua News Agency cited Yao Kong, the city's deputy Party chief, as saying that 10 percent of the world's sneakers are produced in Dongguan, about 20 percent of the world wears Dongguan sweaters and 30 percent of the world's children play with Dongguan toys.

World-famous electronic brands, such as Nokia Oyj and Samsung Co Ltd, have also built plants in the city.

However, Xiao Feng, deputy general manager of Shenzhen Onetouch Business Service Co, said Dongguan's economy, which relies heavily on foreign trade, faces a big challenge in the years ahead after overseas demand started to fall and labor and production costs squeezed profits for local businesses.

"The export-oriented businesses should be upgraded with more technology and innovation. Otherwise manufacturers in Dongguan will find it hard to boost their competitiveness in the global market," Xiao told China Daily.

Local authorities have attached growing importance to upgrading the manufacturing industry by encouraging businesses to focus more on innovation and technology since the 2008 financial crisis, says Xian Zhou'en, director of the Dongguan Economy and Information Bureau.

Exports of high-tech products from the city rose to $33.6 billion last year, an increase of a little more than 13 percent year-on-year, representing an increased proportion of all exports, according to Xian.

Shen Jianshan, president of Camda New Energy Equipment Co Ltd, said boosted investment in innovation and technology research had helped the company better tap the international market despite lower global demand.

The Dongguan-based company has gone from just manufacturing diesel-powered generation equipment to making alternative-fuel products, after introducing high-level foreign technology.

"We are confident about growth because there is strong demand overseas for energy-saving and eco-friendly products," said Shen, adding the company's products are available in more than 50 countries and regions.

Shen said the crackdown on underground prostitution would help clean up the business and investment environment.

"It is not a good time to assess the effects brought about by the crackdown on prostitution on the local economy. But it will definitely help the local government build a good image for business and investment," said Shen.

A healthy business and investment environment will also help the local authority to accelerate economic restructuring, according to Shen.

"More private investment should go into the innovation and information technology sectors, rather than the hotel and entertainment industry. The city needs more funds in the IT industry to change its economic growth path," Shen said.

The huge flow of migrants to the city, along with the rapid development of the manufacturing industry, has helped boost the development of the hotel business in the city over the past two decades.Up to 90 percent of the hotels were developed using local investment, according to the local tourism authority.

Since the first five-star hotel was built in 1996 in Dongguan, local private investment amounting to 25 billion yuan has poured into the hotel sector, according to the tourism authority.

"Dongguan needs to develop the hotel business as a supplement to its rapid manufacturing development in the past. But now it has exceeded demand. More local investment should be put into innovation and IT projects," Shen said.

Xinhua contributed to this story.

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