China’s manufacturing hub tackles sluggish foreign demand with industrial upgrade, innovation

INTERNATIONAL DESK: Due to factors like the pandemic and soaring inflation in some Western countries, Dongguan, a manufacturing powerhouse in south China’s Guangdong Province, faced a decline in foreign trade in recent years.

In the first half of this year, the GDP of the city, often dubbed the “factory of the world,” recorded a modest year-on-year growth of 1.5 percent, significantly lower than the national average of 5.5 percent.

To address the challenges, Dongguan is actively pursuing a slew of new measures involving the optimization of economic structures, transformation of production methods, exploration of new markets, and a commitment to innovation.

Lucky Harvest Co., Ltd., a leading metal mold maker in Dongguan, has ventured into new fields, such as new energy vehicles (NEV), communication equipment, and photovoltaic energy storage components.

“As a veteran manufacturer in the mold and components industry, Lucky Harvest has the capabilities to seize new opportunities,” said Yang Bin, executive deputy general manager of the company.

In the first three quarters of 2023, the company achieved an operating income of 3.9 billion yuan (about 548.5 million U.S. dollars), up 32.05 percent year on year, with its net profit registering a year-on-year increase of 65.17 percent.

Highlighting the strong technological foundation of Dongguan’s manufacturing industry, Ye Kongxin, Party chief of Chang’an Township, where Lucky Harvest is located, said this is the driving force behind Dongguan’s factories being able to consistently develop new products and explore new areas of growth.

Chang’an, an economic leader among the townships in Dongguan, is home to two main clusters of industries — electronic information and metal molds. According to Ye, the township aims to cultivate emerging industrial clusters in three areas: NEV supporting industries, intelligent visual technology and digital healthcare.

In recent years, Dongguan Jinbo Photoelectronic Co., Ltd. faced operational difficulties due to factors such as the pandemic and a downturn in the mobile phone market.

“International orders significantly decreased, leading to a drop in the company’s sales revenue. During the most challenging period, monthly sales decreased by 57 percent,” said Li Zhijun, general manager of the company.

In response, Jingbo collaborated with partners in the industrial chain in an effort to overcome technical bottlenecks.

At the end of July 2023, Jingbo made a breakthrough in developing automobile glass covers. Orders soon flooded in and have been fully booked until January 2024.

According to Li, the collective effort helped in overcoming the challenges. “The entire supply chain is working together. Through synergies, we reduce cost and weather the difficult times together.”

Recent economic data has shown that Dongguan’s manufacturing industry has stabilized. The city’s industrial electricity consumption increased by 9.9 percent in October, 7.8 percentage points higher than that of September, marking six consecutive months of positive growth since May this year.

According to statistics from Huangpu Customs, which administers Dongguan’s foreign trade, in October this year, Dongguan’s foreign trade volume reached 102.9 billion yuan, a year-on-year increase of 5.3 percent.

The “factory of the world” is also going through a rapid digital transformation in various sectors to streamline production processes and boost efficiency.

Liang Yangyang, chief economist of Dongguan Municipal Bureau of Industry and Information Technology, said that over 9,000 large-scale industrial enterprises in Dongguan, or about 70 percent of the total number of large-scale industrial enterprises in the city, have initiated digital transformation.

Fulinmen Shijia, an intelligent home furnishing company in Guangdong, has used digital transformation as a means to tackle the downturn in the real estate industry. As a result, its operating income grew by over 60 percent over the past three years.

“Scientific research and innovation, along with lean manufacturing, have brought about a new path for the company,” said Liang Xiaodong, chairman of the company. (Xinhua)