Dongguan waves goodbye to the Nokia era

For Chinese readers, there is a feature story about Dongguan worth looking at in the latest issue of National Business Daily. It begins with an event that took place last week, when the city’s Natural Resources Bureau issued a public notice on the redevelopment of the old Nokia factory, which closed in 2015 after 20 years of operations. That closure marked the beginning of a major transition for Dongguan away from traditional manufacturing and hurtling toward a new era of “smart manufacturing”. It is today the fastest-growing of the 11 major cities in the GBA.

In the feature, titled “Waving goodbye to the Nokia era”, the story of Dongguan’s metamorphosis from an agricultural county to a manufacturing hub looks further into the future and examines the possibilities brought to the city by the Greater Bay Area initiative.

It has not always been an easy journey up to this point. In 2008, the global financial crisis highlighted the vulnerability of Dongguan to the vagaries of low-end manufacturing in a competitive globalized marketplace. Rising labor costs led many OEM companies to flee the city, forcing Dongguan to shift its focus to high-end manufacturing.

There were some bold decision-makers around, fortunately. In early 2013, China International Marine Containers Group invested RMB6 billion in south Dongguan’s Songshan Lake district to build a new kind of industrial park. In 2014, the world’s largest paper manufacturer, Nine Dragons Paper, chose Songshan Lake as its headquarters. Tech giant Huawei also recently built a replica of European township here to house its 2,700-strong work force, which moved over from Shenzhen.

Bordering Shenzhen, Songshan Lake has attracted Foxconn, cloud computing service provider ChinaSoft International, optical product manufacturer Lens Technology and biotech company 3SBIO, among many others. The Dongguan government has meanwhile invested RMB2.7 billion in building a robotics industry base here, attracting more than 156 companies. In 2017, Songshan Lake recorded RMB38.6 billion in GDP; For 2018, it’s estimated to reach RMB63 billion, up 63%.

Songshan Lake’s ascent mirrors Dongguan’s transformation as a whole. The development blueprint of the Greater Bay Area has given Zhuhai and Foshan the responsibility of building a manufacturing industrial belt for high end equipment, while Dongguan, along with Shenzhen, is tasked with creating a globally competitive industrial cluster for online businesses.

Dongguan lags quite a way behind Shenzhen and Guangzhou, at less than half their size in GDP. Its industrial hinterland is not as wide as Guangzhou’s, while it is not seen as being as open to new forms of fundraising or services as Shenzhen is.

Moreover, the article says, Dongguan needs to improve its connectivity to other cities as well as polish its brand image. This is being worked on: the opening of the new Nansha Bridge on April 2 will reduce commute times from other cities and counties, while numerous road and rail projects are under way to bring Dongguan within the one-hour living circle of the Greater Bay Area.