China's "world factory" transforming in quest for high-tech economic future

GUANGZHOU -- At the expansive new 20,000-square-meter plant of Dongguan Evml CNC Equipment Technology, a company located in Dongguan in south China's Guangdong Province, over 100 workstations are bustling with activity.

This homegrown high-end equipment manufacturer initially specialized in the milling heads of Computerized Numerical Control (CNC) machines. The company has since evolved, making its mark by integrating advanced, high-precision CNC machines and emerging as a leading contender in this industry.

"Since our relocation to the new facility in March, we've expanded our space eight-fold, and yet we're still facing a situation where demand outstrips supply," remarked Fu Rongting, assistant to the general manager of the company. Fu added that their order books are already filled up to June next year.

This company's star product, the five-axis CNC machine, serves as an example underlining Dongguan's thriving "industrial mother machines" sector. In the past, the market in this field was dominated by foreign brands. However, the accelerated growth of Chinese private enterprises, such as Evml, is changing this landscape.

Industrial mother machines refer to machine tools used for processing metals and other materials or workpieces, and are also known as machines that manufacture other machines. Such machines form the foundation of industrialization and serve as significant benchmarks in measuring the degree of industrial advancement.

Dongguan, in one of China's main economic powerhouse locations -- the Pearl River Delta, once relied heavily on low-margin processing trade and labor-intensive industries, thus gaining fame as the "factory of the world." Yet, as China's economic structure shifts, Dongguan's traditional best-sellers in foreign trade, including clothing, shoes and hats, have lost their glory with the city now turning to scientific and technological innovation as a new blueprint for ensuring the future of its "world factory."

Official data indicates that the manufacturing industry proportion in Dongguan's GDP has remained steadily above 50 percent, with the output value of CNC machines for industrial mother machines exceeding 10 billion yuan (about 1.4 billion U.S. dollars).

In the first half of 2024, Dongguan introduced a package of 20 policies to further activate new quality productive forces via industrial mother machines, making them important engines for promoting a new type of industrialization.

"Demand for precision manufacturing and the enhancement of industrial design levels are precisely what provide opportunities for the development of industrial mother machine enterprises amid the upgrade of China's manufacturing industry," said Fu. The company's revenue exceeded 50 million yuan in 2019 and surpassed 350 million yuan in 2023 -- with a compound annual growth rate of over 60 percent.

"Continuous upgrading of densely packed industrial enterprises in the Pearl River Delta is pushing us to grow step by step," Fu added.

Over the past decade, Dongguan's industrial foundation has undergone remarkable transformations, shifting from labor-intensive to technology-intensive, while upgrading from automated production lines to fully intelligent factory systems.

DPT Electronics Co., Ltd., a one-stop display solutions provider, has poured in an average annual investment of approximately 100 million yuan in tech upgrading in the course of the past three years, noted Chen Cheng, head of the company.

These efforts have produced tangible returns. For instance, their VR production line has seen its labor productivity more than doubled. From January to October 2024, the company achieved an output value of 4.94 billion yuan -- marking a rise of 41.17 percent compared to the same period of 2023.

The past decade has seen Dongguan's investment in technological upgrading soar from 12.5 billion yuan in 2014 to 67 billion yuan in 2023, logging a compound annual growth rate of more than 18 percent.

The continuous upgrading of Dongguan's industrial foundation has served as a powerful support in solidifying its status as a "manufacturing powerhouse."

In the first 10 months of this year, Dongguan's value-added industrial output in terms of companies, each with an annual main business turnover of at least 20 million yuan, exceeded 435 billion yuan -- a robust increase of 7.8 percent year on year.

Advanced manufacturing witnessed double-digit growth rates during this period, with a substantial surge in the output of high-tech products. For example, the production of smartwatches soared by 92.9 percent, and semiconductor storage device player production experienced a 77.1-percent increase, while industrial robot output was up by 25.5 percent, compared with the same period in the previous year.