The manufacturing industry is the pillar of Shunde’s economy, and it underpinned the spectacularly successful transformation of Shunde from an agricultural backwater to a bustling industrial city in the past 40 years. Industrial parks reflect a city’s level of industrialization; an old and dilapidated industrial park represents industrial backwardness, while a modern and well-run industrial park shows the dynamism of its industries.
Shunde is working to resolve the problems left behind by inefficient village-level industrial parks, while at the same time seeking upgrading and transformation through modern industrial parks. To address these issues, Shunde formulated a series of corresponding measures.
Consolidating and transforming village-level industrial parks
The earlier disorderly construction of village-level industrial parks was a consequence of Shunde’s rapid development. In the 20th century, unplanned and poorly regulated factories proliferated in almost all villages at Shunde. These village-level industrial parks were dispersed around the whole district and occupied large tracts of land. They polluted heavily, and their output value was low; they occupied 70% of the designated industrial area, but their output was only 27% of the industrial sector. A host of other problems such as the illegal use of public land and overlapping property claims also made the parks hard to transform without government intervention.
While these poorly planned village-level industrial parks helped in the early industrialization of Shunde when the place was short on funds, their continuing operation is now a drag on Shunde’s development.
Based on the latest surveys, there are 382 village-level industrial parks in Shunde’s 205 villages. Each village has an average of 1 to 2 village-level industrial parks occupying nine thousand hectares of land altogether. At the same time, many of these industrial parks had inadequate public infrastructure and did not have a master plan. Buildings were old and poorly built, safety hazards were aplenty, and it was often difficult to keep good social order in the zone. Many of them polluted the environment, negatively affecting the quality of life of residents and the city’s landscape, and slowed down Shunde’s urban development. Rejuvenation of the old village-level industrial parks and releasing of land for better use has been a challenge for Shunde.
In 2018, the Shunde government announced policy measures to transform these industrial parks under the “Shunde Village-level Industrial Park Upgrading Proposal”. The proposal aims to consolidate the village-level industrial parks and turn them into modern industrial parks, and the projects were given top implementation priority.
Building three modern and innovative industrial parks
On the one hand, Shunde aimed to promote its industrial development by transforming the village-level industrial parks and boosting their efficiency. On the other hand, it also tried to step up the building of new industrial parks to accelerate the attraction of emerging industries. Shunde is currently building three modern and innovative industrial parks: the Sino-German Industrial Services Zone, the Wisdom Valley of Southern China, and the New and High-Tech Industrial Development Zone.
Sino-German Industrial Services Zone
The Sino-German Industrial Services Zone is an important international cooperation platform mandated by both the Chinese central government and the Guangdong provincial government. The Chinese and German prime ministers jointly agreed on its development in August 2012. It is a themed industrial park intended to serve as a collaboration platform.
The Sino-German Industrial Services Zone is also the first Sino-European urbanization cooperation area. Urban upgrading is regarded as one of the critical complementary measures in the drive towards Guangdong’s high-tech industrial transformation.
The Sino-German Industrial Services Zone holds significance in national, provincial and municipal levels. It spearheads Shunde’s industrial upgrading and is the undisputed leader among the three new innovative industrial parks.
Wisdom Valley of Southern China
Wisdom Valley is located at the eastern edge of Shunde. It is designed to house company headquarters, high-end industry R&D centres as well as high-end service industries. Currently, Shunde New Energy Automobile Town, Lihe Shunde Science and Technology Park, Beijing University of Science and Technology Shunde Graduate School and other projects are in progress. Wisdom Valley will promote the development of urban-style industries and create a new science and technology cluster that integrates technological innovation, fintech and venture capital.
Shunde New High-tech Industrial Development Zone
The new high-tech zone occupies a total area of 18.86 square kilometres and is at the western side of the district. It was identified as “provincial-level high-tech development zone”, “provincial- and municipal-level base for the construction of a recycled economy”, and the “Guangdong intelligent manufacturing industry base”. By the end of 2017, the park has attracted 29 projects with a total investment worth 11.4 billion yuan.
Sino-German Industrial Services Zone
The Sino-German Industrial Services Zone occupies a total area of 26 square kilometres. The plan is to build 666 hectares of smart manufacturing and high-tech industrial park which includes 200 hectares used for phase 1 smart manufacturing cluster, 133 hectares each for future smart manufacturing cluster expansion as well as exhibition and convention space. The remaining 67 hectares are designated as a high-end residential town for professionals attracted to the Zone.
Figure 1. Location of the Sino-German Industrial Services Zone in Foshan
Three land transportation hubs and three waterway transportation hubs are being built in the Zone. Three subways lines (Foshan metro lines 3 and 6 and Guangfo Ring Line) and intercity transit lines such as Guanfo Jiangzhu intercity light rail will soon converge there.
Guangming and Foshan Yihuan expressways pass through the city, significantly reducing the distance between the Zone located in Foshan and Guangzhou. Only half an hour is needed to cover the 50 kilometres distance between the central and Guangzhou Baiyun International Airport while Foshan Airport is being used as a backup cargo and private airport. The Zone is accessible to any city in the Pearl River Delta within one hour by 2030. Out of all of Shunde’s industrial parks, the Zone’s transportation linkage with the Greater Bay Area is most extensive and convenient.
The road network in Shunde takes a square-shaped framework, forming a “seven horizontals and eight verticals” road structure. Connectivity within the district and with adjacent areas is excellent.
Figure 2. Guangdong-Hong Kong-Macau Greater Bay Area
The Zone has three development goals: to promote cooperation between China and German high-tech companies, to facilitate an alliance between Chinese and German cities, and to demonstrate Sino-European urbanization partnership.
Promoting cooperation between China and German high-tech companies
The high-tech industries focus on smart manufacturing, robotics, biomedical, as well as high-value producer services such as exhibitions and conventions. The Zone has consolidated resources in these priority areas and is in the process of optimizing them to attract more investors. After development in recent years, the number of companies and projects that are currently in the Zone has exceeded 100.
The focus in smart manufacturing is on advanced industrial robots and automated production systems. The 80-hectare smart manufacturing industrial park jointly built by Midea and KUKA has commenced construction in the zone. Likewise, the largest civilian drone company in the world, DJI, has started a manufacturing operation. The Zone also setup Foshan Robotation Academy to train robotics professionals. Foshan Robotation Academy is an authorized overseas partner institution of the Hannover Robot Academy and is the first professional robotics training institute in China. The school has attracted 25 local and international institutions as partners; 14 are European and 11 are Chinese. Hannover Robot Academy will also carry out consulting work to assist companies to adopt of robotics and automation technology.
The biomedical field focuses on the development of medical devices, precision medicine and medical diagnostic technology. The Zone has formed a partnership with the Chinese Academy of Sciences to build Guangdong Yuntian Bio-innovation Industry Centre; with Southern Medical University to build a biopharmaceutical innovation base; and with Jinan University to build a biopharmaceutical industrial park.
The exhibition and convention industry is a high-end service industry. The Tanzhou International Convention & Exhibition Centre located inside the Zone focuses on professional exhibitions, R&D design, product validation and testing services, and vocational training. Leading global exhibition company Hannover Messe is a partner of the Tanzhou International Convention and Exhibition Centre. It has already held many large-scale exhibitions successfully. Among them, the China (Guandong) “Internet +” Expo and Pearl River West Coast Advanced Equipment Manufacturing Investment Conference hold annual shows at the Tanzhou Exhibition Hall.
The Intelligent Science and Technology Park, Sino-European Centre, Tanzhou International Convention and Exhibition Centre and other industrial platforms are currently in operation, providing a stimulus to economic transformation in the region. The combination of the vast Chinese manufacturing base and German technology offers both quantitative and qualitative advantage to manufacturers in the Zone, allowing Foshan, Guangdong and even the whole country’s manufacturing sector to grow.
Industrial City Alliance
The Sino-German Industrial City Alliance was established in April 2017. It serves as an international cooperation platform jointly established by important Chinese and German industrial cities. As of October 2018, the Alliance had 41 official members and observers. The number of Chinese official members, German official members, and Chinese observers are 21, 18, and 2 respectively. China’s Investment Promotion Agency of the Ministry of Commerce and Germany’s Federal Foreign Trade and Investment Agency are the main sponsors of the Alliance. Other advisory organizations include the German North Rhine-Westphalia Investment Promotion Agency, the China Electronic Information Industry Development Research Institute, and the Guangdong Provincial Department of Commerce. The Alliance has now become an important networking platform for China and Germany.
The Secretariat and German Liaison Office are responsible for the Alliance’s operations. The Secretariat is located at the Sino-German Industrial Services Zone and the German Liaison Office in Berlin and Dusseldorf. Working committees under the secretariat were also set up to facilitate the exchange of industrial information.
The Alliance actively facilitates economic and trade exchanges, corporate mergers and acquisitions, and technical cooperation between Chinese and German member cities. It has successfully promoted about 50 cases, including the partnership between Midea and KUKA, and settling the Aachen Industry 4.0 Technology Application Research Centre in Shunde.
The Alliance focuses on five working areas that relate to economic and trade development, industrial cooperation, personnel training, mutual financial assistance, and cultural exchange.
It has already attracted Hannover Messe, the Hannover Robotics Academy, the Fraunhofer Association, Aachen University of Technology, and other institutions to invest and operate in Shunde. These institutions possess world-class experts in their fields, and they have brought advanced technology and management to China. The Hannover Exhibition, Guangdong International “Internet +” Expo and other events are held every year. These activities provide a regular cooperation platform to its member cities.
The Alliance regularly arranges for Chinese business economic and trade missions to visit Germany. For small- and medium-sized companies, it also organizes study tours to Germany for the entrepreneurs and their second-generation successors.
In the first half of 2018, the Alliance conducted more than 60 trips to Germany for nearly 50 corporations. It promoted cooperation between Germany’s Asklepios Group (the country’s largest medical group) and Shunde’s Guangyi Medical Technology Co., as well as between Germany’s Augsburg Football Club and Shunde’s Football Association. The German Machinery Industry Future Alliance (ZAM) also set up office at Foshan, the mother city of Shunde.
The Alliance has helped Chinese companies such as Yizumi, Hongshi Laser and Liansu Group to set up subsidiaries in Germany, find German partners, carry out joint R&D, and invest in M&A. These activities are in addition to the regular consulting services it provides to local businesses that are keen to learn about Germany.
The Sino-German Industrial City Alliance plays an essential role in the bilateral exchange between China and Germany.
The Sino-German Industrial Services Zone is one of the first development areas used to demonstrate urbanization cooperation between China and Europe. Germany is known for its planning and construction standards, and many German cities have earned the nickname “100-year-city” because of their sturdy construction and timeless design that can last 100 years while not being outdated. By integrating the design spirit with urban development needs, an urbanization development approach that is intelligent, green, low-carbon and ecological can be adopted.
The Sino-German Industrial Services Zone promotes green buildings. At present, all new buildings in its core area are considered green, and buildings along the periphery that are ranked two stars and above have reached more than 30%. Regarding sponge city construction (a concept of full water-recycling capability), 80% of the rainwater in the core area is recycled and used. In the green municipal area, a 12-kilometre integrated water piping system has been built, and tap water in the core area has reached the European drinking water standard. The Sino-European urbanization partnership has earned a favourable image for the Sino-German Industrial Services Zone, and the Zone won the “CEIBS Green and Smart City Excellence Award” and “CEIBS Green and Smart City Technology Innovation Award” in 2015 and 2016 respectively.
In terms of the green environment, the riverside environmental project which has an 8-kilometre long riverside corridor consists of cutting paper walking galleries along the bank, open-air swimming pools, water parks, dragon boat plazas and leisure sports facilities.
The Sino-German Urbanization partnership has become a model for urban ecological design in the Pearl River Delta. The design significantly contributed to Foshan being awarded the title “National Forest City”.
The area possesses first-class public facilities like cultural centres, a sports centre, a performing arts centre, a hospital, a book city and a cinema. Together with a comprehensive transportation network of subway, light rail and buses, a high quality and full coverage public service system is made available. Currently, the science museum, youth centre, library, archives centre, grand theatre and urban planning exhibition hall have either been opened to the public or settled into office.
The intelligent robotic machinery manufacturing arm in the Sino-German Industrial Services Zone
Robots and smart manufacturing are closely related, and they share a lot of common technologies. Most of the players in these two industries are different divisions of the same companies.
China has been the world’s largest and fastest-growing market for robots since 2013. It accounts for 1/3 of the global robotics market in recent years. Domestically, the robotic industry is also one of the country’s fastest-growing sector; in 2017, it was worth 120 billion yuan, a year-on-year increase of 25.4%.
Figure 3. Chinese robot production from 2012 to 2017 (in 10,000s)
In 2017, the ratio between robots and workers was 88:10,000, surpassing the 80:10,000 average in the world’s industrial countries for the first time. However, compared to the 150:10,000 ratio in most industrialized countries, China is still in the catch-up phase.
Figure 4. Robot application density for China and industrial countries from 2013 to 2017
As China’s industrial robotics industry is a latecomer and just took off in the last ten years, the market is currently dominated by multinational robotics companies. In the “2018 China Robot Industry Analysis Report”, the Harbin Institute of Technology Robotics Group and China Science and Technology Evaluation and Research Centre pointed out problems relating to three robotics fields.
Firstly, core components of industrial robots rely on imports, and it is difficult to reduce production cost. The country is weak in translating university or research institute work to commercially viable products. The industry standards on robotics are not comprehensive, and quality of products vary. Most companies rely on government policy to stay viable. Secondly, service robots face problems in key technology breakthroughs, high prices, and poor records on functionality and safety. These problems slowed down the adoption of service robots in service businesses. Thirdly, companies that manufacture specialized robots face high technology barriers and have difficulty staying viable.
The report also highlights that the current Chinese robotics industry has several tailwinds favourable to its development. First are the favourable government policies that support their growth, economic environment (robots replacing humans), social environment (corporate awareness and social acceptance) and technical environment. The domestic supply chain of the industrial robot industry has improved in the last few years, and localization of core components is gaining momentum. The service robot market has taken off, and some leading manufacturers are becoming profitable. Specialized robots are in the nascent stage, and bionic technology has become the focus of its R&D.
The structure of China’s robot industry is different from other countries. Based on 2017’s industrial output value for the 435 companies engaged in the robot assembly operation, industrial robots, service robots and specialized robots accounted for 26.6 billion (61%), 12.2 billion (28%) and 4.7 billion (11%) respectively. In other countries, industrial robots take up almost the entire market. Suzhou Ecovacs, China’s leading household and one of the largest global robot cleaner manufacturing company, recorded 4.551 billion yuan in revenue and 376 million yuan in net profit in 2017.
Figure 5. Sales of Chinese industrial robots from 2012 to 2017
Midea and KUKA’s joint Smart Manufacturing Industrial Park is designed to bring together robotics and smart manufacturing companies, as well as their related upstream and downstream supply chain companies, to build a viable ecosystem for these two industries. The park plans to invest 10 billion yuan in the Sino-German Industrial Services Zone. It is the Zone’s core project and involves the construction of smart manufacturing factories, office and R&D areas, exhibition centres, and accommodation for talents. The area will house four major business segments: smart manufacturing, smart logistics, smart healthcare, and smart homes. Midea is an early adopter of smart manufacturing in China and has accumulated many years of experience to deal with the complexity of technology integration in the production line, while KUKA is a global leader in the field of robotics and automation. Their resources are complementary and synergistic, and the Midea-KUKA joint venture will serve as the anchor of Shunde’s drive in smart manufacturing and robotics.
Currently, the number of industrial robot companies in Foshan is around 100. Between January and June 2018, Foshan companies bought 1,626 new industrial robots. Among Shunde’s manufacturers, more than 180 companies use industrial robots now. The end user market of robots and smart manufacturing at Shunde is vibrant and growing.
Robotics and smart manufacturing system industries have a high technological threshold, and they call for systems integration of various disciplines. Successful development must be based on solid technical foundation and cooperation with advanced enterprises.
With the support from the Greater Bay Area project, the presence of the Sino-German Industrial Services Zone will help Shunde become an important robot production base in China, next to Shanghai. Shenzhen is a major robotics development town in Southern China and is the home base for reputable robotics companies like Huichuan Technology. The integration of the Greater Bay Area facilitates the cooperation of industries between Shunde and Shenzhen.
Shunde encourages its traditional manufacturers to upgrade and transform their operations by promoting the use of smart manufacturing technologies and equipment like robots. The “Internet + Intelligent Manufacturing” upgrading project at 100 companies, “smart factories” project are also currently underway to promote the two cornerstone industrial clusters — home appliances and machinery.