Yangtze River Delta: Shanghai factories moving as integration accelerates
Updated 18:02, 26-Jul-2018
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05:26
The integration of China's Yangtze River Delta is accelerating under the coordination of the region's local governments. One result is that many factories in the region's largest city of Shanghai are moving to take advantage of the changes.
Shanghai, Jiangsu, Zhejiang and Anhui form a giant administrative region in the Yangtze Delta. The region covers 359,000 square kilometers and houses a permanent population of 220 million. It also boasts an economy worth 19.5 trillion yuan annually, or nearly one-quarter of the mainland's output. The State Council implemented a plan for the Yangtze Delta region in 2016. The plan covers 26 cities including Shanghai, Nanjing, Hangzhou, and Hefei. However, the Yangtze Delta regional cooperation that started in the early 1980s stumbled from a planned to a market economy. There were a variety of regional conflicts that Unilever vice president Zeng Xiwen has seen during his career with the company. Unilever closed seven plants in Shanghai in 2002 and moved its production facilities to Hefei in Anhui Province. The move caused quite a stir.
ZENG XIWEN, VICE PRESIDENT UNILEVER NORTH ASIA "The same Lux soaps were also made in Indonesia. The overall costs including shipping and tariffs were lower than ours. In fact, the integration of the Yangtze Delta was a trend at the time, and the question was who would be the first to leave."
The plant that Unilever built in Hefei 15 years ago has proved to be the company's largest production base. Its products are sold in nearly 20 countries around the world.
ZHANG LU, DEPUTY DIRECTOR HEFEI ECONOMIC & TECH DEV'LP ZONE MGT. COMMISSION "After more than 10 years of growth, our development zone is now the largest one in central and western China. Last year, the gross industrial output value topped 350 billion yuan."
The SAIC-Volkswagen Ningbo Branch opened and the first car rolled off the assembly line in October 2013. The plant brought with it an auto parts company, a testing institute, and an automobile college. That was in addition to talent and capital.
CAI SHIJIE, DEPUTY DIRECTOR NINGBO HANGZHOU BAY NEW AREA MGT. COMMISSION "Ningbo was a port city in the first place. Previously petrochemicals were the primary industry here. But in 2017, the auto industry took over the No. 1 status in the manufacturing sector."
More than 1,000 new cars leave the SAIC-Volkswagen Ningbo base every day bound for every corner of China. Construction began earlier this year on the Huahong Wuxi Integrated Circuit R&D and manufacturing base. The company has invested 10 billion US dollars in the project.
"So far we have launched the first phase of the project. In the future, we will have a 12-inch integrated circuit production line and achieve a technological milestone by producing 40,000 90-nanometer, 65-nanometer or even 55-nanometer circuits."
WANG JINJIAN WUXI DEPUTY MAYOR "The Huahong project perfectly supports the promotion and improvement of our entire industry chain, and it has also secured Wuxi's foothold in the semiconductor industry in China."
Car rentals on mobile phones, billing by the minute, and brand-new lease models have fueled the growth of new energy vehicles in the Yangtze Delta. Forty-five models of new energy vehicles have more room to showcase their features. On average one order is generated per second. In the case of new energy vehicles, if the standards for charging facilities in different places aren't consistent, then the cars can't run smoothly.
ZHANG TIANPEI, DIRECTOR ANHUI DEV'LP AND REFORM COMMISSION "Given the administrative divisions in the past, various regions have their own industrial policies and systems, including their own market rules. To completely eliminate the institutional differences brought about by these administrative divisions, it is necessary to do so in a step-by-step manner and to realize high-level match-ups in the process of cooperation and integration."
WEN JIANRONG, DEPUTY DIRECTOR ZHEJIANG DEV'LP AND REFORM COMMISSION "Sometimes, the qualification criteria for personnel, including high-tech enterprises, are not consistent. The high-tech companies in our province and those in Shanghai do not recognize the qualification from each other. This dilemma cripples both the cross-regional operations of high-quality companies and the market."
MA CHUNLEI, DIRECTOR SHANGHAI MUNICIPAL DEV'LP AND REFORM COMMISSION "General Secretary Xi Jinping put forward new requirements for the realization of higher-quality integration in the Yangtze Delta. He suggested that Shanghai should take the initiative to work with Jiangsu, Zhejiang, and Anhui to streamline the industrial layout, improve the business environment, and formulate market standards to provide better service for the Yangtze Economic Belt so the country can better brace itself for international competition."
A few years ago, Taicang Port in Jiangsu Province began cooperation with the Shanghai Port. Under the arrangement, Shanghai handles long-haul goods while Taicang manages short-distance products. That means they won't compete with each other and stands better chances for development.