Dongguan’s smart manufacturing DNA

Here’s another interesting feature story about Dongguan, which appeared in the Guangzhou Daily.

Dongguan Mayor Han Yafei said at last month’s China Development Forum that one out of every four mobile phones in the world is made in Dongguan. Only few months ago, it was still only one in five.

The opening of the Nansha Bridge and the announcement of the manufacturing industry’s tax rate reduced to 13% from 16% have given the manufacturing industry along the Pearl River Delta a new boost and Dongguan seems to be poised to reap the benefits, according to the report.

Currently, Dongguan is the centre of an enviable supply chain of smart phone manufacturing, from design concepts to component manufacturing to overall unit production. The city has 73 communications technology enterprises. The mobile phone output of Huawei, OPPO and Vivo are China’s top three and, together with Apple and Samsung, the world’s top five.

At the city’s harborside new district, OPPO recently secured a 800,000 square meter parcel for RMB517 million. The company plans to invest RMB5 billion in the next four years to build another smart manufacturing center there.

In the same area sits China’s flagship state-owned chipmaker, Tsinghua Unigroup, with a 2000-acre industrial park that took in over RMB100 billion of investment, the largest in Dongguan’s history.

All of this could be said goes back to 1995, when the world’s then-leading phone-maker, Nokia, picked the city as its manufacturing base. It was soon followed by Samsung. Both companies formed an upstream and downstream supply chain in the area.

Also in the same year, Chinese entrepreneur Duan Yongping, a widely regarded business leader, was attracted to found BBK Electronics. The company produced cells phones, VCD players, DVD players, TVs and computers, which later morphed into some of China’s leading IT manufacturing enterprises, of which OPPO and VIVO are the best-known.

In 2011, both OPPO and VIVO entered the smartphone manufacturing industry. Today, there are about 1,000 downstream and upstream enterprises in the area supporting these two major phone-makers.