The logic of “transformation and development”—talk about Dongguan

Every city has its own development logic. Rostow's stage theory of economic growth, Lewis' theory of unlimited labor supply, etc., illustrate that urban development has its own stages, and each stage requires different focus. Rostow's theory also pointed out that with per capita GDP of US$3,000 as the watershed between traditional society and modern society, the role of investment and export in driving GDP shows a downward trend, and the focus of development strategy must be changed from foreign trade dependence to domestic demand. At present, China's eastern coastal cities are generally facing the transition dilemma of "per capita GDP of US$3,000". Under the background of domestic demand-driven, most cities are facing the task of transformation and need to transform from a traditional export-oriented economy to an economy that satisfies domestic demand. However, the smooth transformation and No, in addition to policy support, it is also necessary to guide and adjust based on the characteristics of the city, and the influence of important factors such as "path dependence" and "regional competition" cannot be ignored.

After the financial crisis in 2008, Dongguan’s foreign trade exports suffered a major blow. The massive reduction in orders from Europe and the United States led to the closure of a number of companies and factories, and the economic development slowed down significantly. In 2009, Dongguan’s GDP growth rate ranked first in Guangdong. Last place. Relying on the superior location of the Shenzhen-Hong Kong-Guangzhou Economic Corridor, Dongguan was dominated by the processing and manufacturing industry of imported materials in its early years and became a manufacturing center in Guangdong. Foreign trade exports became an important lifeline of economic development. Relying on the functional spillover of industrial highlands such as Shenzhen and Guangzhou and its own manufacturing tradition, a large number of manufacturing companies have been formed in Dongguan, including many Taiwanese companies, Hong Kong companies, and some European and American companies. It has also activated the development of a large number of micro-enterprises supporting midstream and downstream industries. In the early stages of reform and opening up, the prosperity of the manufacturing industry created Dongguan's economic miracle. Its GDP growth rate ranked among the top in consecutive years, and "Made in Dongguan" became famous throughout the country.

While the manufacturing industry is booming, supporting service industries have also emerged, such as business services, business tourism, etc. Due to the low urban energy level, Dongguan, which is sandwiched between the two super cities of Guangzhou and Shenzhen, has developed relatively slowly in producer services such as finance, accounting, and intermediaries, while the lifestyle services related to food and housing have developed rapidly. A large number of star hotels and restaurants have been built. In this process, a relatively special service industry—the erotic service industry—also emerged. Since the sex service industry is not allowed by government laws and policies, it has been operating "underground" and belongs to the underground informal economy. Its scale is estimated by netizens to be as huge as 50 billion yuan, accounting for about one-tenth of Dongguan's GDP.

Before the financial crisis, Dongguan was also aware of the danger of an excessive proportion of export-oriented economy. Dongguan has a population of 8 million, 6 million of which are migrants. Once problems arise in export-oriented industries, it will not only impact the economic foundation, but may also cause social problems. At the same time, the rise of the Yangtze River Delta and the mainland has triggered a "labor shortage" in the Pearl River Delta. The sustainability of the Dongguan model has also caused concern. Dongguan attempted transformation and development and built the Songshan Lake Science and Technology Industrial Park, focusing on modern service industries such as software and information. However, judging from the effect, Dongguan's modern service industry's breakthrough is not a success. On the one hand, it does not have the cultural and information agglomeration advantages of Guangzhou. On the other hand, it also lacks the service industry foundation and innovation environment like Shenzhen. Dongguan's export-oriented manufacturing industry Dependence remains difficult to change. After industries gradually moved to the periphery of the core area of ??the Pearl River Delta, Huizhou has made great progress in receiving electronic information and other industries, which has also had a certain impact on Dongguan's status.

After the financial crisis broke out, the crisis in Dongguan finally became fully apparent. Caused by a sharp decline in GDP and a large number of bankruptcies of companies, the only option was to "accelerate transformation and development." But transformation is not something you can just change if you want. Industrial path dependence and the emergence of regional cities are constantly squeezing the space for transformation. Each of the surrounding cities has the desire for industrial transformation and the foundation for transformation, especially Guangzhou and Shenzhen, which have already occupied high ground in various new development factors such as culture, information, and capital. Dongguan has become a "sex city" - the most memorable thing is that it is the pornographic service industry that is not allowed by national laws and policies. It is indeed ironic but also helpless.

The "anti-pornography" campaign will indeed have a certain impact on Dongguan, but it is also a necessary "re-force" stage and a further test of the wisdom of government governance and development.

Where will Dongguan go from here? Can Dongguan break the "curse" of an export-oriented economy and find a development path that is in line with trends and characteristics?

Finally, I would like to make two points.

First, the core competitiveness of the industry. What will be Dongguan’s core competitiveness in the future? I think water town culture should be one of its core elements. Creative culture based on the characteristics of the water town, leisure and entertainment centered on sports and competition, and service industries dominated by high-quality education and medical care may form new industrial characteristics of Dongguan.

The second is the urban spatial pattern. Dongguan is not a strong central city in the true sense. Guancheng's economic strength is not the strongest. The economic connections between other towns and streets are not centered on Guancheng, but form regional economic sectors with cities such as Guangzhou and Shenzhen. Dongguan Municipalities are only loosely connected in an administrative sense. Combined with industrial transformation, in the future, will Dongguan need to build a "strong central" city or form a networked, multi-center urban spatial pattern? If the above two structures are to be formed, what development strategies are needed? This requires further research.