On February 25, the China Overseas Business Investment (Guangdong) Conference was held as scheduled in Guangzhou, resulting in the signing of 856 investment and trade cooperation projects with a total value of 1.63 trillion yuan.
Following the conference, participating overseas Chinese business leaders traveled to Guangzhou, Shaoguan, Huizhou, Shanwei, Zhongshan, and Zhanjiang to conduct investment inspection tours.
There was a strategic rationale behind this itinerary.
Guangdong appears to be encouraging overseas Chinese businesspeople to focus on “mid-tier cities,” which is why Shenzhen, Foshan, and Dongguan were not included in the itinerary, even though they are clearly closer and attract more attention.
Foshan and Dongguan, in particular, have become the cities with the greatest investment potential in the Pearl River Delta after Shenzhen and Guangzhou.
The two cities share many similarities, and the debate over which will emerge as Guangdong’s “third city” has long been a hot topic.
01 “Cross-River Cooperation” Over a Single Toilet
Foshan commands half the market share in China’s ceramics industry.
However, due to product homogenization, profits for traditional ceramics enterprises have been shrinking, making innovation the only way forward.
Take Foshan’s Conti Ceramics, for example.
In 2014, Conti expanded its traditional bathroom tile factory to include smart toilets, though the designs were rather rudimentary.
In 2020, Conti added voice control to its smart toilets, but the inability of voice recognition technology to accurately distinguish dialects and accents remained a persistent challenge for the company.
It wasn’t until they partnered with Shenzhen-based ManCloud Technology that Conti Ceramics’ smart toilets finally received a true intelligent upgrade.
On September 5, 2022, Conte Ceramics and ManCloud Technology held a strategic cooperation signing ceremony to exclusively adopt ManCloud’s comprehensive smart solutions and jointly establish a joint laboratory.
Meanwhile, smart toilets equipped with AI chip system modules exclusively provided by ManCloud have gradually entered production and are now being rolled out to the market.
Unlike ordinary smart toilets, this model can understand Cantonese.
After installing the chip system module, the toilet uses artificial intelligence to learn dialects, allowing even elderly users who are not fluent in Mandarin to easily “give commands.”
Producing this small chip module requires both software and hardware.
The software is developed by Shenzhen-based ManCloud Technology.
The hardware consists of dozens of components, including chips, circuit boards, connectors, capacitors, resistors, and more. Given the current level of specialization in the supply chain, each component has its own dedicated manufacturer.
It is worth noting that all these manufacturers can be found within Dongguan’s trillion-yuan electronics and information technology industrial cluster.
This world-class industrial cluster serves as the fertile ground upon which consumer electronics giants like Huawei, Foxconn, OPPO, vivo, and DJI thrive, and it is also the secret behind the growth and expansion of hundreds of technology companies in Shenzhen.
Today, the eastern bank of the Pearl River has formed a vast regional innovation network, boasting an ecosystem akin to a “tropical rainforest.”
Guangdong Bolive Technology Co., Ltd., based in Dongguan, is a key component of this “tropical rainforest.”
Starting with the production of lithium batteries for consumer electronics like DJI and Xiaomi, the company has shifted into the power battery and energy storage sectors, continuously expanding its operations up and down the industrial chain.
A toilet manufactured in Foshan, combined with software from Shenzhen and hardware from Dongguan, is transformed into a smart toilet.
Interaction and cooperation among different cities are generating increasingly remarkable synergy.
02 Who Leads the Manufacturing Sector in the Greater Bay Area?
Foshan and Dongguan share many similarities:
They are situated on the west and east banks of the Pearl River, respectively; both are members of the “trillion-yuan club”; and, as key components of the metropolitan areas surrounding first-tier cities Guangzhou and Shenzhen, they are in close proximity to these hubs.
In 2022, Foshan’s GDP exceeded Dongguan’s by 149.8 billion yuan, and its industrial added value from enterprises above designated size surpassed Dongguan’s by nearly 50 billion yuan.
While the scale of their manufacturing sectors is comparable, their industrial development trajectories differ significantly.
Foshan ranks first in the province in terms of the scale of its household appliance, metal products, ceramic building materials, textile and apparel, and furniture manufacturing industries. Its ceramic machinery, woodworking machinery, and plastic machinery sectors account for approximately 90%, 60%, and 30% of the national market, respectively.
Midea, Hisense, Galanz, Arrow, and Dongpeng are all leading enterprises in these sectors.
Foshan’s equipment manufacturing sector has also evolved from supporting industries for traditional manufacturing such as ceramics and furniture, which differs significantly from Dongguan’s model of directly absorbing industrial spillover resources from Shenzhen and focusing primarily on the electronic information industry.
The electronic information manufacturing industry is Dongguan’s largest sector and its first world-class industrial cluster to exceed one trillion yuan in scale, with an industrial support rate exceeding 90%.
High-end equipment manufacturing is Dongguan’s second-largest industry, with revenue exceeding 400 billion yuan, and it is home to a number of companies such as Han’s Laser, Topstar, Genesis, and Aopute.
This characteristic is also reflected in the 2022 economic performance briefings for both cities.
Foshan’s fastest-growing industries are: automotive manufacturing, general equipment manufacturing, chemical raw materials and chemical products manufacturing, and electrical machinery and equipment manufacturing.
Dongguan’s fastest-growing sectors are: computer manufacturing, specialized equipment for the electronics industry, optical fiber and cable manufacturing, and lithium-ion battery manufacturing.
To summarize the differences, Foshan’s manufacturing sector is more “heavy-duty,” while Dongguan’s is more “light-duty.”
Foshan has a distinct domestically oriented industrial system, with well-developed traditional industries such as home appliances, furniture, ceramics, building materials, beverages, textiles, and plastics;
Dongguan, on the other hand, has formed export-oriented industrial clusters, with the electronics and information technology sector standing out prominently, benefiting from the spillover effects of Shenzhen’s industrial chain, while traditional manufacturing also maintains a certain scale.
"Domestic-oriented" versus "export-oriented" may be the key terms for understanding the development of manufacturing in Foshan and Dongguan.
In September 2022, Guangdong issued a series of documents all aimed at the same goal: how Foshan and Dongguan can enhance the modernization of their industrial chains to become strategic pillars of the Pearl River Delta’s core engine.
The "Opinions on Supporting Foshan in Accelerating High-Quality Development and Building a Manufacturing Innovation Hub in the New Era" and the "Opinions on Supporting Dongguan in Accelerating High-Quality Development and Building a Strong City of Science, Innovation, and Manufacturing in the New Era" clearly define the new strategic positioning and development paths for the two cities.The documents stipulate that by the end of the 14th Five-Year Plan period, Foshan and Dongguan aim to achieve a regional GDP of 1.5 trillion yuan and 1.3 trillion yuan, respectively; by 2035, Foshan aims to reach a regional GDP of 2.5 trillion yuan, while Dongguan aims to double its 2020 GDP.
Although the two documents take different paths, they converge in their focus on “manufacturing plus innovation.”
Foshan emphasizes “technological innovation,” encouraging service-oriented enterprises in R&D, design, cultural creativity, and e-commerce to expand into manufacturing; Dongguan, meanwhile, centers on “scientific and technological innovation + advanced manufacturing” to elevate its overall development level.
Standing at the new starting point of becoming trillion-yuan-level cities, Foshan and Dongguan must blaze a trail for the province’s development.
03 From “Hanging onto the Big Brother” to “Becoming the Big Brother”
From a broader perspective, the development of Foshan and Dongguan is inseparable from the radiating influence of the two core engines: Guangzhou and Shenzhen.
Through the integration of Guangzhou and Foshan, the two cities have formed a pattern of industrial synergy based on division of labor within the industrial chain.
Guangzhou and Foshan will focus their efforts on achieving breakthroughs in cooperation across sectors such as automotive, next-generation information technology, and biomedicine and health, jointly building four trillion-yuan-scale industrial clusters.
Dongguan’s industries, meanwhile, benefit from industrial spillover effects from Shenzhen.
Shenzhen’s high-tech industries drive the development of Dongguan’s manufacturing sector, while Dongguan’s smart manufacturing helps refine Shenzhen’s industrial supply chains, creating a deep integration of “Shenzhen innovation + Dongguan smart manufacturing.”
Relying on different “big brothers” has shaped distinct development paths and fostered unique competitive advantages.
What are the highlights of Foshan’s development?
First, infrastructure development; second, an export-oriented economy.
First, the construction of Foshan’s metro system has accelerated significantly.
In 2022, Foshan opened three new metro lines, bringing the total operational mileage to 127.3 kilometers—more than three times that of Dongguan.
Although both are located near major first-tier cities, Foshan already has three lines connecting to Guangzhou, while Dongguan still has only one metro line and no connection to Shenzhen.
Currently, the development pace of the Guangzhou metropolitan area appears to be significantly faster than that of the Shenzhen metropolitan area.
Second, Foshan’s foreign trade imports and exports have shown impressive growth.
In 2022, Foshan’s total import and export volume reached 663.78 billion yuan, a year-on-year increase of 7.7%, ranking first in the Pearl River Delta in terms of growth rate.
Behind these impressive foreign trade results lies “Made in Foshan” going global.
As a long-standing partner of Foshan, GuChuan United has, over the past two years, successfully attracted several major projects to the city, including the Taijishan Machinery Equipment Production Base, the Hanqingda Technology Smart Manufacturing Base, the Osma Intelligent Equipment Base, and the Baking Food Center, with a total investment of 4.65 billion yuan.
The steady influx of new projects serves as powerful evidence of the manufacturing sector’s thriving development. Amid the challenging foreign trade landscape of 2023, we eagerly anticipate Foshan’s performance.
Although Dongguan’s total economic output and industrial value-added are slightly lower than Foshan’s, it has surpassed Foshan in terms of population, consumer spending, and the number of listed companies.
In terms of permanent residents, Dongguan has 10.5368 million, exceeding Foshan’s 10.378 million.
In terms of consumer spending, Dongguan’s total retail sales of consumer goods reached 425.487 billion yuan, surpassing Foshan by 66.13 billion yuan.
In 2022, a total of 12 companies in Dongguan went public via IPO, compared to only 6 in Foshan. The number of national high-tech enterprises in Dongguan reached 9,099, while Foshan had 8,700.
For Foshan, the nation’s sole “Comprehensive Pilot City for Manufacturing Transformation and Upgrading,” Dongguan’s rise is undeniably a wake-up call, exposing underlying concerns beneath the GDP figures.
However, viewed from another angle, Foshan has given birth to a number of locally headquartered Fortune 500 companies, while Dongguan has yet to achieve such milestones.
……
There are many similar economic indicators; Foshan and Dongguan each have their strengths, yet the gap between them remains narrow.
In fact, the decade-long competition between the two cities does not necessarily need to be decided by a clear winner.
With the development of the “Greater Bay Area on Rails” and the construction of the Shenzhen-Zhongshan and Shenzhen-Zhuhai cross-bay links, industrial integration and coordinated development across the Pearl River will accelerate.
West Bank cities like Foshan are positioning themselves in advanced manufacturing, with a greater focus on industrial digitization and intelligent transformation.
Dongguan, along with Shenzhen and Huizhou, are among the cities with the most developed electronics and information technology industries. While Dongguan was previously heavily influenced by capital from Hong Kong and Taiwan as well as its industrial and supply chains, it is now gradually integrating more deeply with Shenzhen’s industrial ecosystem. Huizhou is also deepening cooperation with Shenzhen in industries such as petrochemicals and automobiles.
Consequently, the eastern bank is more focused on participating in international competition, advancing industrial upgrading, and strengthening and optimizing supply chains.
The western shore, meanwhile, must focus on upgrading traditional industries and requires enhanced industrial division of labor and integration among Guangzhou, Foshan, and Zhaoqing, as well as Zhuhai, Zhongshan, and Jiangmen.
Just like the smart toilet mentioned at the beginning—
While Foshan and Dongguan continue to align closely with the “big brothers” of Guangzhou and Shenzhen, they can also collaborate and complement each other, potentially even emerging as new “big brothers” to drive the development of surrounding areas and create endless possibilities.
