|Market Profiles on Chinese Cities and Provinces|
Major Economic Indicators
Notes: 1 In Renminbi real term 2 For all state-owned and other forms of enterprises with annual sales over RMB 5 million
Export-oriented economy and china's fourth largest exporting city
Dongguan has a very vibrant economy. Its GDP reached RMB 262.7 billion in 2006, growing by 19.2% in real terms. In fact, GDP growth averaged some 19% annually during the past 5 years. This impressive record could be explained by the city's reliance on foreign trade, which represented 2.55 times its GDP in 2006. This ratio is one of the highest among all cities in China.
In 2006, Dongguan's exports amounted to US$ 47.4 billion, accounting for 4.9% of the national total. Processing trade accounted for 94% of the city's exports.
Over the years, Hong Kong and Taiwan businessmen have set up export processing facilities in Dongguan. They mainly import materials and semi-finished products like plastics and metals and integrated circuits and semiconductors to manufacture electronic and electrical products, auto data processing equipment and parts, and other high tech products, all of which have become the city's major export items. In fact, export accounted for about 80% of the city's gross output of industrial enterprises above designated size in 2006.
A production base attracting foreign investors
Dongguan is a very popular destination for FDI and utilised US$ 1.8 billion in 2006. Foreign-invested enterprises (FIEs) are the main economic driving force. Here, 16,021 industrial FIEs account for about 60% of industrial output value. Apart from electronics and electrical products, they manufacture toys, shoes, garments and furniture etc. Heavyweights which have invested in Dongguan included General Electric, Duracell, Du Pont, Nestle, Nokia, Thomson, Sony, Canon, NEC, Philips, Samsung and V-tech.
Facing rising production costs and bottlenecks in supplies of land, labour, water and energy in recent years, Dongguan is seeking to develop new industries like high tech and services industry, and shifting from mere processing to activities with higher value-added.
Dongguan is also gaining in importance as a trading hub. The town of Humen is an important national distribution centre for garments and textiles. Many expos in various areas (such as computer information products, garments, furniture, machinery and metal products, wool products and agricultural products etc.) were held in Dongguan. In recent years, the city has been taking steps to discourage high pollution and high energy consumption industries.
Strong supply chain backed by well-connected industrial system
Dongguan is one of the fastest growing economies in China. It is now an international manufacturing base for products of all types and grades. Electronic information products, electrical and mechanical products, textiles and garments, furniture, toys, papermaking and paper products, food and beverages and chemical materials are its 8 pillar industries.
Dongguan has great export capabilities. Its exports of toys, shoes, cameras and furniture account for more than 10% of the national total. Dongguan's output of computer magnetic heads, motherboards, monitors, power supplies, scanners, disk drives and micro-motors ranks among the first in the world. Major computer manufacturers worldwide all come here for sourcing. In fact, Dongguan is so important as the world's leading exporter of PCs and accessories e.g. scanners and displays etc. that an often quoted remark goes like this: "If there is a traffic jam between Dongguan and Hong Kong, 70% of the world's computer market will be affected".
The local private enterprises play an important role in the supply chain, with thousands of local suppliers clustered around "specialty townships". Each town specialises in a specific industry e.g. furniture, garments, wool products etc. With ample supply of both upstream and downstream products, enterprises are assured a strong supply chain as they can easily find low cost supporting industries, products and spare parts in the locality.
Good infrastructure and logistics support
Dongguan's strategic position makes it a bridge between Hong Kong and Guangzhou, and between the east and west banks of the PRD. It has good infrastructure, with highways, railways and waterways linking to all destinations. The Guangzhou-Shenzhen highway and National Highway 107 lead to Guangzhou, Shenzhen and Hong Kong. The city is planning to build more highways linking other parts of the PRD in the coming 5 years.
The Dongguan Railway Station is connected to all major railway networks in the country and is the meeting point of the Guangzhou-Kowloon and Beijing-Kowloon railways. There is an ocean-going container wharf at Zhujiang port in the town of Humen. However, currently most exports are shipped via international container terminals within two hours' drive from the city. These include the Kwai Chung container terminals in Hong Kong, Yantian and Shekou in Shenzhen, and Huangpu in Guangzhou. There are also a number of airfreight facilities in the neighbourhood, including the Hong Kong International Airport and other airports in Guangzhou, Shenzhen and Zhuhai etc.
Apart from hardware, the government has taken measures to streamline the flow of transport. Initiatives included abolishing all road toll stations within the city to save on queuing time, simplifying customs declarations procedures for goods going to Hong Kong.