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News Analysis: Why Dongguan will remain the world’s factory, and probably the most competitive one

A worker handles a machine in a magnet factory in Dongguan, South China's Guangdong Province. Photo: Chen Qingqing/GT

In the past two years, I've traveled to Dongguan, South China's Guangdong Province three times. Every time, I was assigned to cover a different topic ranging from the replacement of workers with robots to the decline of the local GDP to how original equipment manufacturers (OEMs) thrive in the city.

No matter what kind of sources I talked with, I could not agree more that this manufacturing hub has been growing from the world's factory into a smart factory that will reshape industries and supply chains in South China's Pearl River Delta Region.

Western journalists care more about how many jobs have been replaced by robots in recent years and how many foreign-funded factories in Dongguan have been shut down because of the alleged deteriorating business environment on the Chinese mainland. It seems that they have ignored some basic factors involved in the industrial restructuring process.

When China unveiled economic reform and opening-up in 1978, foreign companies came to invest in China as a way of helping local industries. Some companies, which considered themselves contributors to China's economic growth, enjoyed a slew of favorable policies such as low tax rates and land use fees. Meanwhile, hundreds and thousands of factories have been set up in the Pearl River Delta Region, attracting migrant workers from all over China. Many are from rural regions, born and raised by poor families. And they wanted to change their destiny by working hard in those factories.

Some Chinese businesspeople, whom I interviewed during my days in Dongguan, shared the same path of becoming successful after spending years working in the region. Although some of them worked on simple tasks or assembled the same component day by day, they accumulated experience in doing repetitive work and left with the ambition to create their own business.

Some worked on really niche areas. They have been focusing on those areas for years and become experts on some technologies. For example, some make strong magnets with alloys of rare-earth elements. The product may be unremarkable, but can be used in many everyday domains including consumer electronic products such as smartphones and selfie-sticks. Another example is a businessman who has been making molds for several years in a factory set up on the mainland by a company from the island of Taiwan. Afterward, he then built up his own supplier network and started his own factory with just 6,000 yuan ($746) in the 1990s.

来源:Global Times     Editor:谭晶