Shifting Industries

By YU YAN

Shifting Industries

By YU YAN

Coastal city Beihai aspires to revive its economy by developing its electronic information industry

Against a clear sky, the blue sea hums along a shining beach, with villas in the distance. This beautiful scene is in Beihai, in south China’s Guangxi Zhuang Autonomous Region.

Situated on the edge of the South China Sea, Beihai has long been famous as a tourist city. Its Silver Beach, which stretches 24 km, is reputed as the best beach in China.Tourism and real estate were once the main industries supporting its development.

From 1992 to 1993, the city experienced a severe real estate fever due to overbuilding.When the bubble burst, the city’s economy collapsed, resulting in a surge of bad assets and mounting debt.

“We have realized that to achieve a sustained development, we need to have modern industries,” said Lian Younong, Mayor of Beihai. “It’s far from enough to only have tourism and real estate. Without modern industry, a single fi nancial crisis can lead to the city’s economic collapse.”

For years, the Beihai Municipal Government has been formulating a plan to revive the city’s economy. The government finally decided to develop the electronic information industry as its pillar industry because of its high added value and minimal effects on the environment.

Since Beihai brought in the electronic information industry in 2008, the industry has experienced a sound growth.

“By 2015, we aspire to strike a balance between the electronic information industry and other industries, including the petrochemical industry and port-related industry,”Lian said.

Opportunities

Indeed, Beihai’s successful industrial shift owes greatly to the Central Government’s strategic planning for Guangxi—development of the Beibu Gulf Economic Zone.

Facing the Beibu Gulf to the south,Guangxi is the only region that bridges China and ASEAN countries through land and sea channels.

To promote China-ASEAN cooperation and also to boost the economic development of Guangxi, the Central Government approved the Guangxi Beibu Gulf Economic Zone Development Scheme on January 16,2008. Thereafter, the economic zone was incorporated into the national strategy. The Beibu Gulf Economic Zone was established to be a logistics and trade base, a manufacturing base and an information exchange center for China-ASEAN cooperation.

The zone covers four cities of Guangxi,namely, Nanning, Beihai, Qinzhou and Fangchenggang, and two logistics centers in Yulin and Chongzuo.

It is against this backdrop that Beihai decides to build itself as an international electronic information production base of the Beibu Gulf. The huge ASEAN market provides it with bright development prospects.

Achievements

With the completion of the CEC (China Electronics Corp.) Beihai Electronics Industrial Park opened on December 30,2009, where almost all electronic and IT companies in the city are located now, the city’s electronic information industry has come into the orbit of rapid development.

In the past two years, the industrial park has created many “firsts” in Guangxi and even in China.

The first production line of solid tantalum capacitors in China went into operation in Jing Guang (Hong Kong)Electronic Co. Ltd. The first laptop battery and computer power of Guangxi was produced in Beihai Great Wall Energy Technology Ltd. The first batch of Self-Adaptive LED display of Guangxi was produced by Guangxi Great Wall Computer Co. Ltd., a subsidiary of the state-owned China Great Wall Computer Group Co. Ltd. The first LCD television of Guangxi was produced by Beihai New Future Information Industry Co. Ltd. The fi rst LED light of Guangxi was produced by Beihai Kuantech Co. Ltd.

It is worth noting that Netac Technology Co. Ltd., a world leading manufacturer and solution provider of USB Flash Drive and MP3 player entered the industrial park on May 28, 2011. So has 3nod, the world’s No.1 solution provider of audio products.

The output of the electronic information industry in Beihai rose from 7.68 billion yuan ($1.184 billion) in 2008 to 18.7 billion yuan ($2.884 billion) in 2010,accounting for about two thirds of the total output of electronic information industry in Guangxi.

Predictions hold that the output will hit 30 billion yuan ($4.62 billion) by the end of 2011 and surpass 100 billion yuan ($15.38 billion) in 2015. Such rapid growth will greatly boost the local economy and promote employment.

Challenges

Bright prospects aren’t the only thing lying ahead for the city.

“We are still behind some advanced cities in the scale and the research ability of the electronic information industry,” Lian said.

The advanced cities refer to cities Shenzhen in Guangdong Province in the Pearl River Delta, and Shanghai, Suzhou of Jiangsu Province and Hangzhou of Zhejiang Province in the Yangtze River Delta.

Meanwhile, the logistics cost remains high, Lian said. Although Beihai has a complete transportation network, including a deepwater port, airport, railway and express highway, its logistics costs are still higher than other cities such as Shenzhen, which has long been a distribution center. Currently,the delivery of Beihai’s products needs to go through Shenzhen.

Competition with neighboring cities also forms a challenge.

“For a long time, we have been beset by the concern that it is difficult to avoid competition with our neighboring cities, due to our similar locations, resources, industries and development projects,” said Liao Dequan, Vice Mayor of Beihai, in his book meditating on the development path for Beihai published in October 2010.

“But now, we have adopted a positive attitude to the competition,” Liao said.

“The key for us is to build our own strength. Now we only need to build our information industry parks, equipping them with the most preferential policies and the most effective measures,” Liao said.

“In the meantime, we should also develop supporting services, such as logistics,to form an industry chain,” he added.

A dearth of talent is another problem.“We are absorbing talented people with our thriving industry and the broad prospect of making a good career here. Also, we are putting in time to train local people to enable them to become skilled and experienced quickly,” said Gao Xishun, Manager of the Development Department of the CEC Beihai Electronics Industrial Park.