Why China’s hollowed-out manufacturing hub is pinning its hopes on a hi-tech revival

He Huifeng for South China Morning Post:  The four-storey building in Dongguan used to be a busy factory, full of young migrant workers.

Recently resurrected, with a shiny, glass curtain wall replacing dusty concrete, it is now home to dozens of domestically funded tech and internet start-ups.

Opened in the 1990s by SAE Magnetics, a subsidiary of Japanese electronics giant TDK, the factory employed around 20,000 workers at its peak and made hard disc parts for companies including Samsung, Toshiba and Fujitsu.

But despite being portrayed as a shining example of Dongguan’s economic miracle, which saw the city turn into China’s undisputed export leader and the capital of its labour-intensive manufacturing, it lost its lustre over time, along with tens of thousands of similar factories across the city.

The old-economy stalwarts, battered by soaring labour and raw material costs and falling orders from overseas, shut down or shrank. It now charges its new tenants, Chinese e-commerce and hi-tech companies, rents that are two or three times higher than it could ask before.

That is all part of a broader transformation in Dongguan as the city, between Shenzhen and Guangzhou, looks to become a smart manufacturing base focused on the emerging mainland market, banking on the rise of domestic tech brands and booming domestic consumption.  Full Article:

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