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Dongguan
BusinessChina Business

Dongguan’s multinational factories from Gillette to Samsung give it an edge as a manufacturing hub for the bay area

  • Dongguang is the fifth-largest city in the Greater Bay Area by size of economy, boosted by investments by the likes of Swire Pacific and Samsung
  • The city is seeking to wean itself off a reliance on low added-value and labour-intensive manufacturing as growth has lagged the nation’s average

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Dongguan’s economy is the fifth largest of the bay area’s 11 cities, worth 965 billion yuan (US$149.6 billion) in 2020. Photo: SHUTTERSTOCK
Zhang Shidong
Dongguan stands out as a manufacturing hub in the Greater Bay Area, thanks to its myriad local factories of multinationals from Samsung to Philips and DuPont that have helped to boost the size of the city’s economy more than 1,500-fold over the past 70 years.
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Dongguan’s rise may partly stem from its geographical advantage. Being located between Guangzhou and Shenzhen enables the city to benefit from a spillover effect from the two biggest economies in the region. And Dongguan is 140 kilometres away from Hong Kong, a distance that can be covered in 30 minutes by high-speed train.

Dongguan’s economy is the fifth largest of the bay area’s 11 cities, worth 965 billion yuan (US$149.6 billion) in 2020.

It is getting close to joining the trillion-yuan club in the area that includes Shenzhen, Hong Kong, Guangzhou and Foshan. It set itself a target five years ago to boost the economy to more than 1 trillion yuan in 2021.

It is all a far cry from humble beginnings. When the Communist Party won the civil war in 1949, Dongguan’s economy was worth a mere 600 million yuan, heavily relying on the agricultural industry.

Manufacturing is the pillar that makes up 54 per cent of the city’s economy. Among the big names that have factories in the city is the vast Hong Kong conglomerate, Swire Pacific, which has a unit that supplies bottles to Coca-Cola, food giant Nestle and razor maker Gillett.
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Still, that is a double-edged sword. Dongguan’s economy grew by only 1.1 per cent last year, well behind the 2.3 per cent expansion for the whole nation. Its export-led and labour-intensive economy proved to be vulnerable to shrinking overseas demand resulting from the global outbreak of Covid-19. The manufacturing sector contracted 0.9 per cent in 2020, and exports decreased 4.4 per cent.

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