When you think of Dongguan, what comes to mind? In the past, people may have thought that this place is a representative of the world's factories with many factories that undertake all kinds of orders. However, today's Dongguan is facing a mid-life crisis, the prosperity of the past is no longer there, orders have fallen sharply, and the economic growth rate is at the bottom. The biggest reason for this phenomenon is that there is abundant supply, but insufficient demand.
Looking back on 2021, when the virus was raging, Dongguan ushered in a highlight moment. GDP exceeded one trillion yuan for the first time, becoming the fourth city in Guangdong with a GDP exceeding one trillion yuan. However, the boom ended quickly as a dream. In 2022, the external situation will change, demand will be weak, and external orders will decrease sharply, making Dongguan face economic difficulties.
Taking Chang'an Town as an example, it used to be a gathering place for hardware mold manufacturers, but now it is facing a surplus of factories and declining rents. In order to compete for orders, enterprises adopt a low-level strategy, resulting in a decline in the market and a continuous compression of profit margins. This kind of manufacturing involution and vicious competition has put the entire industrial chain in trouble.
Foreign-funded enterprises have chosen to relocate and do not renew their contracts in Dongguan. This not only leads to a decrease in foreign investment, but also makes the downstream ** chain have to follow the relocation, in order to avoid risks. Tesla and other companies have announced the construction of factories in other countries, triggering a chain reaction in the industrial chain.
Dongguan's long-standing overdependence on foreign trade makes it difficult for it to adapt to changes in the external situation. Although Dongguan has been promoting the transformation of its industrial structure in the past 15 years, it will take time. The voice of manufacturing relocation has always existed, and external factors, especially friction, have led to changes in the industrial chain and affected the development of Dongguan.
Southeast Asia has become a new manufacturing transit station, undertaking orders and exporting products to Europe and the United States. Although Southeast Asia is currently unable to completely replace China's export demand, its growth shows that China's production chain is shifting to Southeast Asia. This makes Dongguan must be vigilant and urgently need to upgrade its industry and reduce the share of low-end manufacturing.
Migrant population has been an important driving force for Dongguan's development, but as orders have decreased, some migrant workers have been forced to leave. If migrants see Dongguan as a working city rather than a place to call home, Dongguan will become more vulnerable to other industries. Therefore, solving the housing and education problems and retaining the population have become the top priorities for the sustainable development of Dongguan in the future.
Dongguan is facing a serious economic crisis, and the dilemma of its industrial structure makes it difficult to adapt to changes in the external situation. Industrial upgrading and transformation is an inevitable choice for the future, and solving the population problem is the key to development. Dongguan needs to get rid of its over-dependence on foreign trade and develop a more high-end manufacturing industry to achieve sustainable development. All these changes require the joint efforts of the whole society to revitalize Dongguan's economic vitality.