Dongguan, known as the "factory of the world", was once the benchmark of China's market economy, and has made great contributions to the economic development of the country and even the world with its strong manufacturing and foreign trade strength. However, after this year's liberalization, Dongguan has encountered an unprecedented predicament, with corporate orders falling off a cliff, and economic growth in the whole of Guangdong is also at the bottom, and this trillion-dollar GDP city seems to have fallen into a mid-life crisis. What is the reason for Dongguan's predicament?
Orders fell sharply and economic growth slowed
Dongguan's predicament is mainly manifested in two aspects: one is the sharp decline in corporate orders, and the other is the slowdown in economic growth. According to the data of the Dongguan Municipal Bureau of Statistics, in the first three quarters of 2023, industrial enterprises above designated size in Dongguan achieved operating income of 18 trillion yuan, a year-on-year increase of 67%, the growth rate decreased by 9 over the same period last year2 percentage points, 5 percentage points lower than the provincial average4 percentage points.
Among them, the growth rate of operating income of the five pillar industries, such as electronic information manufacturing, textile, garment, footwear and hat manufacturing, and food and beverage processing and manufacturing, is lower than the city's average level, which is 52%、-0.3%、-0.1%。Zhan Zhibin, director of the Dongguan Municipal Bureau of Industry and Information Technology, said that the main reason for the sharp decline in orders of Dongguan enterprises is the lack of international market demand, friction, epidemic prevention and control, and the increase in labor costs of raw materials.
On the other hand, Dongguan's economic growth has also slowed down significantly. According to the Dongguan Municipal Bureau of Statistics, in the first three quarters of 2023, Dongguan achieved a gross domestic product (GDP) of 7,8806.7 billion yuan, a year-on-year increase of 68%, the growth rate decreased by 3 over the same period last year4 percentage points, 2 percentage points lower than the provincial average1 percentage point, ranking first from the bottom of the 21 prefecture-level cities in the province.
Among them, the added value of the primary industry increased by 4 percent year-on-year8%, and the added value of the secondary industry increased by 6 percent year-on-year5%, the added value of the tertiary industry increased by 7 year-on-year3%, the growth rate of the three industries is lower than the provincial average. Li Jianhua, director of the Dongguan Municipal Development and Reform Bureau, said that the main reason for the slowdown in Dongguan's economic growth is the decline in the growth rate of the manufacturing industry, the regulation and control of the real estate industry, and the downturn in the consumer market, resulting in an imbalance in the economic structure and a decline in economic quality and efficiency.
Advantages of Dongguan
Despite the severe difficulties faced by Dongguan, it still has advantages that cannot be ignored. First, the manufacturing industry has a strong foundation, and second, the innovation ability is constantly improving. Dongguan is one of the cities with the most developed manufacturing industry and the strongest comprehensive industrial supporting capacity in the country, with a complete industrial system and industrial chain, covering 34 of the 41 industrial categories, involving more than 60,000 kinds of products, forming a trillion-level electronic information cluster and four 100-billion-yuan clusters such as equipment manufacturing, new materials, food and beverage, textiles and garments. Dongguan's manufacturing industry has a high degree of specialization, intensification and internationalization, and is an important manufacturing base and chain center in the world.
According to the data of the Dongguan Municipal Bureau of Statistics, in the first three quarters of 2023, the total profit of industrial enterprises above designated size in Dongguan was 10150.4 billion yuan, a year-on-year increase of 144%, the growth rate is 7 times higher than the city's average7 percentage points, accounting for 85 percent of the city's total profits9%。Dongguan's manufacturing industry still dominates the city's economy, providing a solid foundation for Dongguan's economic development. On the other hand, Dongguan's innovation ability is also constantly improving.
In recent years, Dongguan has focused on scientific and technological innovation and advanced manufacturing, fully implemented the digital economy development strategy, and formulated the "Policies and Measures of the People of Dongguan City on Promoting the High-quality Development of the Digital Economy" and "Dongguan Digital Economy Development Plan (2022-2025)" and other documents, creating a policy system for the development of the digital economy.
According to the data of the Dongguan Municipal Bureau of Statistics, in the first three quarters of 2023, Dongguan's high-tech manufacturing industry achieved an operating income of 11 trillion yuan, a year-on-year increase of 89%, the growth rate is 2 times higher than the city's average2 percentage points, accounting for 61 percent of the city's operating income1%。The proportion of Dongguan's high-tech manufacturing industry in the city's manufacturing industry continues to increase, providing impetus for Dongguan's economic transformation and upgrading.
Conclusion
Dongguan, a once-glorious city, is now facing unprecedented difficulties, with corporate orders plummeting and economic growth slowing, and this trillion-dollar GDP city seems to be in a mid-life crisis. However, Dongguan was not discouraged by this, but with a more positive attitude, to meet the challenges and seek breakthroughs. Relying on its strong manufacturing foundation and continuous improvement of innovation capabilities, Dongguan accelerates the digital, intelligent and green transformation of the manufacturing industry and improves the competitiveness of products and brands. Dongguan