Shunde’s Future
Photo: Foshannews
By Henry Hing Lee Chan

Shunde’s Future

Aug. 07, 2019  |     |  0 comments


Among the more than 2,000 county-level administrative units in China, Shunde has grown from an agricultural county to a leading economic region and a pioneer in reform through reform, opening up, and economic growth. The amazing achievements in Shunde’s reform and opening up have proven that “development is the real deal”. Shunde people’s daring attitude and no-nonsense approach is given full play under the reform and opening up. The long-term unwavering support and continuous implementation of the “industrial district (county) policy” from all levels of society, from the government and enterprises to the masses, is the cornerstone of Shunde’s economic success. (The article “Shunde’s Reform” analyses economic development through reforms.)


The past successes of Shunde are cemented by the core policy of the district government — long-term economic development. Shunde’s future will also focus on sustainable economic development.


In 2018, the per capita output value of Shunde exceeded 120,000 yuan, twice the national average and matching the level of developed countries. In the past, the added value of traditional manufacturing production was not enough to support the needs of sustainable economic development. So, on the one hand, Shunde opened up high-value-added emerging industries; on the other hand, it guided the transformation and upgrading of traditional manufacturing industries and increased the added value of their production (for details, see the article “Shunde’s Emerging Industries”). Manufacturing is the backbone of Shunde’s economy. Whether Shunde’s manufacturing industry can smoothly transform into high value-added modern manufacturing is the key to Shunde’s economic development. The economic challenges facing Shunde are also problems facing the entire Pearl River Delta manufacturing industry.


The central government officially established the Guangdong-Hong Kong-Macau Greater Bay Area (GBA) Development Leading Group in 2018 to coordinate the development of the GBA. Subsequently, on February 18, 2019, the “Guangdong-Hong Kong-Macau GBA Development Plan” was officially announced. It is announced that Zhuhai and Foshan will be the leaders to build an advanced equipment manufacturing industry belt on the west bank of the Pearl River.


The position of Foshan will attract the country’s production resources to flow to the advanced equipment manufacturing industry in Foshan, and provide effective support for the transformation of Shunde into a modern industrial system. These national and regional initiatives will boost the future development of Shunde. (For more information on the development of Shunde in high-tech industries and advanced equipment manufacturing industries such as robots and automation industries, please refer to the article “Shunde’s Industrial Parks”).


Bay area economy


Since the beginning of the maritime era, trade has become an important part of global economic development and an important bridge for the economic development of countries and regions. The ports along the coastal regions have provided for the transportation needs of the global economy. In today’s global economic development, the place that can lead global technological innovation and resource allocation is the bay area with waterways connected to the harbor. The economic effect derived from the geographical location of the bay area is called the bay area economy. The bay area has become an important growth pillar for world economic development, and is also a new platform for international competitiveness, especially innovation.


There are four major characteristics of a globally successful bay area:

1) The economy, society and culture are highly open and highly inclusive.

2) The economy is innovative and the business environment is supportive.

3) Effectively integrates production resources in the region and creates the effect of 1+1>2.

4) A highly livable area with many high-end talents.


According to World Bank data, 60% of the world’s major cities are located in bay areas; 60% of total economic volume is concentrated in the bay area and its hinterland; 75% of the world’s largest cities, 70% of industrial capital and population are concentrated in the area 100 kilometers from the coast. Hence, the bay area economy has become an important development area.


The three most famous bay areas in the world are the New York Bay Area, the San Francisco Bay Area and the Tokyo Bay Area. The Guangdong-Hong Kong-Macau GBA is China’s first bay area and one of the world’s four newest and largest bay areas.


In the three established major bay areas, the Tokyo Bay Area is an “industry bay area” that gathers one-third of Japan’s population, three-quarter of industrial output, six ports along the coast, and a throughput of over 500 million tons. It is Japan’s largest industrial city group, international financial center, transportation center, trade center and consumer center. The Bay Area of New York is a model of the “financial bay area”. The largest 500 companies in the United States and more than one-third of companies’ headquarters are located in the Bay Area of New York. The Bay Area of New York is the world’s financial center, with its finance industry, luxury industry and urban culture having worldwide influence. The San Francisco Bay Area is a model of the “technology bay area”, boasting the world-renowned Silicon Valley and more than 20 well-known science and technology research universities, such as Stanford and the University of California at Berkeley. It is also home to the global headquarters of technology giants such as Google, Apple, Intel, Facebook, Tesla, Nvidia, Gilead, Uber, etc. The San Francisco Bay Area has a high-tech personnel population of more than 2 million, and is a gathering place for technology elites from around the world.


As early as 2006, the Chinese government carried out research on the coordinated development of urban and rural areas in the Pearl River Delta. In 2009, the “Study on the Coordinated Development Planning of the Greater Pearl River Delta Urban Agglomeration” identified the development of the GBA as the focal point for establishing cross-border regional coordination. In March 2016, China’s “13th Five-Year Plan” (2016-2020) proposed the concept of the Pearl River Delta urban agglomeration. In July 2017, “Deepening Guangdong-Hong Kong-Macau Cooperation — Promoting GBA Construction Framework Agreement” was signed by the local governments.


The construction of the GBA has been written into the 19th National Congress Report of the Communist Party of China in 2017 and the Prime Minister’s Government Work Report of the 2018 National People’s Congress. The construction of the GBA has been upgraded to national development strategy level. It is a benchmark for economic transformation and upgrading.


Compared with the three established bay areas in the world, the Guangdong-Hong Kong-Macau GBA has two special characteristics: diversity in social and economic systems and large economic differences in the GBA. These two characteristics bring opportunities and challenges to the GBA: opportunities for economic integration and challenges of institutional differences, but the overall outlook has more opportunities than challenges.


Table 1. Basic data of the world’s four major bay areas in 2016


Guangdong-Hong Kong-Macau Greater Bay Area


On February 18, 2019, the central government officially announced the “Guangdong-Hong Kong-Macau GBA Development Plan”, and the plan established four key strategic positioning for the GBA: international technology centre with global influence, important support base for the Belt and Road Initiative, deep cooperation demonstration zone between Mainland and Guangdong-Hong Kong-Macau, quality space that is suitable for living, travel and work. We can see that the central government is determined to build the GBA into a globally successful bay area, and hopes to lead the Chinese economy to a higher level through the GBA.


The Guangdong-Hong Kong-Macau GBA refers to the urban agglomeration consisting of the two special administrative regions of Hong Kong and Macau, and Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Zhaoqing, Jiangmen and Huizhou in Guangdong Province. In 2017, the 9 cities in the Pearl River Delta of the GBA accounted for 30% of Guangdong Province’s land area, 56% of the population and 85% of the total economic output. The per capita GDP was US$18,000 in 2017, twice the per capita of US$9000 in Guangdong Province. The nine cities in the GBA are the economic core of Guangdong Province.


Figure 1. Guangdong-Hong Kong-Macau Greater Bay Area


According to Table 2, the statistics of 2017 showed that the GDP of Hong Kong, Shenzhen and Guangzhou is more than US$300 billion (2 trillion yuan). These three cities are the core, first tier cities of GBA. The total economic output of 2 trillion yuan is the same as the GDP of a province in China. The per capita GDP also exceeds that of the Yangtze River Delta and Beijing-Tianjin-Hebei cities. The GDP of Foshan and Dongguan exceeds US$100 billion (close to a trillion yuan).


Table 2. Basic data of the Guangdong-Hong Kong-Macau GBA in 2017


Shunde in the GBA


The “Guangdong-Hong Kong-Macau GBA Development Plan” clearly points to Zhuhai and Foshan being the leaders to build an advanced equipment manufacturing industry belt on the west bank of the Pearl River. Foshan’s position is in line with Shunde’s current industrial structure and the development direction of the district government. Shunde is expected to become one of the important beneficiaries.


1) At present, Foshan’s industrial output value is the highest among all cities in the GBA (except Shenzhen). In 2016, it reached 471.9 billion yuan, much higher than Dongguan’s 287.8 billion yuan. The proportion of industrial output accounts for 59.2% of regional GDP, and is much higher than the 55% achieved by other cities. One of the most important national policy goals of the GBA is to build an industrial system with international competitiveness. As the core industrial area of Foshan, Shunde will receive considerable support in policy.


2) Shunde’s manufacturing industry is currently semi-automated. The traditional assembly line workshops are first upgraded to smart manufacturing, and becomes fully automated with industrial robots and machine tools. Shunde’s investment in these fields is early, and its support for the robots and automation industries is better than other cities. Although the GBA planning is guided by the government, but success requires the cooperation of industry and market. In this respect, Shunde has the conditions to ride on the GBA’s plan to promote advanced manufacturing. (For Shunde’s work in emerging industries and industrial upgrading, please refer to the two articles “Shunde’s Industrial Parks” and “Shunde’s Emerging Industries”.)


3) Shunde is already very strong in the parts and components chain of the home appliances and machinery industries. Now combined with the high-tech research of Shenzhen, as represented by the re-location of DJI drone production facilities to Shunde, it has proved that Shunde has a viable economic model. Shunde is an important manufacturing base. In recent years, it has paid special attention to the robots and automation industries. Shenzhen has the advantages of high-end manufacturing, information technology and technological innovations. Shunde and Shenzhen are one of the important illustrations of the complementarity of cities in the GBA.


4) Shunde’s manufacturing industry is dominated by local private enterprises. They have the characteristics of high flexibility and strong market adaptability. Private enterprises account for more than 70% of China’s total technological innovations. Shunde has the inherent advantages in implementing the transformation of the manufacturing industry.


5) Many traditional industries in Shunde are faced with land and cost constraints. The economic structure in the GBA allows low value-added manufacturing to move to lower tier and other cities and lets high value-added activities to stay in Shunde. This will encourage the “headquarters economy” that Shunde has promoted in recent years.


6) In recent years, Shunde has implemented a series of policies to attract talents. Population growth in Shunde is the fastest among the cities in the GBA. Many scholars believe that the key to the success or failure of the GBA is the in-flow of high-end talents. Shunde is obviously a leader in this respect amongst the second- and third-tier cities. In order to attract talents, Shunde is committed to creating a quality urban environment that is suitable for living and working. (For Shunde’s work in improving the urban environment, please refer to three articles: “Urbanization in Shunde”, “Shunde’s City Governance” and “Shunde’s Reforms”.)


7) Shunde is famous for being a reform pioneer and for being pro-business. In recent years, it has been focusing on creating a better environment (both hardware and software) for enterprise development. These two achievements have attracted many new investments into Shunde. Faced with the diversity of systems in the GBA, Shunde is strengthening international cooperation and openly encouraging local enterprises to go global. On the other hand, it will also continue to attract foreign investors and talents to Shunde. It will become the focus of attention of investors and high-end talents.


8) A series of reforms introduced by the Shunde district government in recent years, such as: “Technology Shunde” proposed in January 2018 are generally consistent with the GBA Development Plan. The district government will provide assistance in promoting and executing the GBA plan. (For the Shunde district government’s reform plan, please see the articles “Shunde’s Business Environment” and “Shunde’s Reforms”.)


To secure a high-quality development


Today’s Shunde has not yet changed from a resource-intensive, labor-intensive industry to a technology-based industry. Whether it is industrial structure, economic growth mode, urban construction, rural environment, etc., there is a gap between the requirements of the new era and Shunde’s current situation. Shunde has a clear understanding of its own development; it is determined to grasp the development opportunities of the GBA, complete the transformation of village-level industrial parks and focus on the high-quality development of the manufacturing industry. In turn, Shunde wants to become a standard bearer in systemic reforms, smart manufacturing, innovative technologies, international cooperation and quality of life.


1) Reform of village-level industrial parks. At present, Shunde is implementing a village-level industrial park reconstruction plan. It is planning and constructing several 10,000-mu (a unit of area, =0.0667 hectares) modern industrial parks, integrating 20 modern industrial clusters (each with more than 3,000-mu land area), and building 30 eco-friendly and modern-themed industrial parks. These parks will form a village-level industrial park mode known to be “government-led, market-oriented and professionally-operated”. It will attract investment capital to participate on a larger scale and comprehensively improve the management quality of the parks, such that an environment is created for high-quality development.


2) Actively develop “Technology Shunde”. Shunde will use innovation as the driving force for high-quality development and build a new homeland of technological innovations and transformations. It will give play to the role of enterprise innovation and accelerate the improvement of innovation capabilities. Earmarking smart manufacturing as an important engine for high-quality development, Shunde will establish a manufacturing optimization and upgrading model that integrates technology, design, finance, and industry. In about 5 years, the home appliances industry will be upgraded to smart home appliances industry and will become a world-class industrial cluster of 600 billion yuan. It will build a national first-class robot education, research and development, manufacturing and application base. It will also cultivate 100 benchmark enterprises specializing in smart manufacturing, and its smart manufacturing industry will be at the forefront of the province and the country.


3) Create a first-class business environment with internationalization, rule of law and convenience. Shunde will continue to improve its business environment in accordance with World Bank standards. It will strengthen the construction of the “digital government” and explore the application of artificial intelligence in public policy formulation. It will accelerate the implementation of the “1121” reform for enterprise investment and construction projects. Shunde will further promote the establishment of a “single window” for international trade and carry out pilot projects for cross-border e-commerce import and export businesses. It will establish a new market supervision model with a sound credit system, and build a brand of “Shunde integrity”.


Conclusion


The Guangdong-Hong Kong-Macau Greater Bay Area Development Plan is a national economic development strategy formulated in response to regional economic development. The region has a huge integrated market, complementary urban advantages, mature innovation and technological research and development, strong industrial strength, and world-class transportation and logistics network. The synergy between the manufacturing industry and the service industry in the region will be a strong support for the GBA to become one of the engines of China’s economic development.


Although Shunde does not have the economic influence of Shenzhen, Hong Kong and Guangzhou, it has a wealth of experience in the formulation and execution of reforms, a strong local entrepreneurial base, a deep understanding of the district’s developmental positioning in the GBA and a good manufacturing base. Shunde’s future potential is worth looking forward to. It will attract and retain a good number of investors and talents, contribute to the construction of the Guangdong-Hong Kong-Macau Greater Bay Area and create a bright future for the people of Shunde.





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