From left: Workers check the quality of flange products at a plant in Dingxiang, a county famous for the flange industry. A worker paints a vase at a factory in Qixian, a county which is known for glassware production. [Photo provided to China Daily]

Characteristic industries strategy kick-starts economic engines across Shanxi province

Towns and counties featuring specialty industries have rapidly developed into a new growth area in Shanxi since a characteristic towns strategy was launched less than a year ago, according to local officials.

The government of Shanxi announced its first batch of 10 provincial-level characteristic towns on Sept 14, marking the inauguration of the development campaign in the province. In the months that followed, various cities across Shanxi announced their own city-level characteristic towns.

Developing towns, counties and districts with characteristic industries is a strategy which aims to create economic engines that accelerate high-quality industrial growth locally, according to Ma Yunxia, deputy chief of the Shanxi Department of Industry and Information Technology.

He said that all 92 characteristic towns in Shanxi now have gathered more than 5,500 business entities engaged in the research, development, production and sales of specialty products. Their collective annual output value surpasses 200 billion yuan ($27.92 billion).

"This shows the characteristic towns and counties have become a vital force to drive Shanxi's economic transformation and high-quality development," he said.

The official noted that the first 10 provincial characteristic towns and counties have reported impressive growth over the past several months.

"The 10 locales have witnessed the addition of 1,069 business entities in the past 10 months and the launch of 192 new investment projects with funds totaling 61.6 billion yuan," Ma said. "These new businesses and projects have created more than 37,100 jobs for local residents."

The official added that these 10 towns and counties reported a year-on-year increase of 16.4 percent in output value on average during the first five months of 2023.

"All the figures indicated that the characteristic towns and specialty industries are growing bigger and stronger, becoming new engines for Shanxi's manufacturing industry," Ma added.

One prime example is the township of Xinghuacun. It is one of the leading production sites of white liquor in Shanxi and is home to a number of nationally renowned brands.

Local statistics show that Xinghuacun is now home to 485 businesses in the white liquor industry, which have created more than 50,000 jobs for local people.

These companies produced about 20.15 billion yuan worth of white liquor in 2022. The entire industry chain reported an output value of more than 40 billion yuan.

The town's white liquor, or baijiu, industry is represented by Xinghuacun Fenjiu Group, which is among the leading baijiu producers in China.

Xinghuacun Fenjiu is also one of the exemplary enterprises that demonstrate how to boost the development of characteristic towns by innovating in their operations.

The characteristic towns, mostly focusing on the traditional models of growth, are in great need to upgrade and innovate, said one of the company's executives.

"Over the past decades, we have almost reaped all the 'fruits of growth' in the framework of traditional operational models," he said. "So upgrades and innovations are the solutions to sustain and boost growth."

Xinghuacun Fenjiu's new approach to growth is to strengthen its globalized operations. The company is now among the top three exporters in China's white liquor industry. To date, its products have been sold to more than 60 countries and regions through its 50-plus overseas dealers and more than 9,000 foreign outlets.

Innovation is now the consensus among many entrepreneurs and officials in Shanxi's characteristic towns and counties.

The county of Dingxiang, for instance, is known for the flange casting and manufacturing industry. Over the past six decades, the county has developed into the largest flange casting base in Asia and the largest exporting base of flange products in the world.

"But we are not resting on our laurels," said Li Zhiyong, deputy chief of the Dingxiang people's congress. "We are expecting greater development through upgrades and innovations."

The county government has released several action plans for the industry's growth, with a focus on industrial digitalization and smart manufacturing.

One move is that the county announced the launch of a digital operation platform for local businesses on June 9. Li said the platform integrates such functions as sharing technological research resources, offering technological services, assisting purchases, transactions, trade and transportation, as well as creating channels for fundraising.

A number of projects for digitalized upgrades of local manufacturers were also launched on the same day.

In Taigu district in the city of Jinzhong, which is a renowned production site of malleable iron, the upgrading of 112 manufacturers is underway. The work is focused on developing smart and low-carbon operations.

The county of Wanrong is a production base of concrete admixtures – additive agents used to bind cement, sand and gravel to improve the performance of concrete in erosion resistance, heat insulation and strength.

The county has forged partnerships with a number of research institutions and universities for research and development and the training of personnel. The joint facilities have not only supported local growth with new R&D results but supplied companies with more than 3,000 workers with various skills.

The provincial authorities in Shanxi are also showing strong support for the development of characteristic towns.

The provincial government recently released an action plan for the high-quality development of characteristic towns, with a number of preferential policies announced in such areas as infrastructure construction, technological upgrade support and business environment improvement.

The government pledged that it will set aside a special fund, from which 500 million yuan will be allocated annually to support technological upgrades of specialty industries in characteristic towns.

It is expected that Shanxi will have a total of 30 provincial-level characteristic towns and counties by 2025.

Yao Yi contributed to this story.