Industry cluster a success

Despite the economic crisis, the lights are still on in Guzhen, the lighting capital of China.

Business is down with tax receipts to the local government falling 20 percent and exports to lucrative North American and European markets falling. Some 10,000 migrant workers have also left.

But the township in Zhongshan in Guangdong province, which supplies 60 percent of China's lights and fittings, is showing some resilience.

Wu Runfu, a party secretary in Guzhen, is confident that the town will survive the downturn because of the dominance it has in its sector.

"You might not be able to find Guzhen on any international map, but everywhere in the world you will find lights made in Guzhen," Wu said.

That Guzhen is a world leader in lights is the result of the local government's strategy in the early 1990s to focus on developing a major lighting industry in what was then mainly an agricultural area.

On one street alone there are now 1,000 lighting stores in a town with a population of 69,000 and a migrant work force of 150,000.

The town has also spawned small metal, glass and plastics manufacturers whose products go into making the lights.

The only other non-lighting industry of any size in the town is horticulture.

Guzhen is held up as a successful example of creating a cluster of similar industries so that a whole industrial chain can be built around it.

Party secretary Wu admits it can have some downsides.

"With the whole town engaged in the lighting industry, it was once difficult to buy a bottle of coke or water here," he joked.

Zeng Shuneng, 40, is managing director of the Lighting Era Center, a major new 700 million yuan lighting retail complex that opened in March in the center of town.

"For a very short period of time, people stopped buying because of the crisis. Exports have been hit, but the Chinese market is quite stable," Zeng said.

The center attracts buyers from all over the world, including the Middle East, and some of the light fittings are priced at up to 400,000 yuan.

Zeng said one of the advantages of having such an industrial cluster in the town is that it attracts interest not just in China, but internationally.

"It is like the Canton Fair every day here, with a lot of small manufacturers being able to show what they make," he said.

Zeng said that being dependent on one industry does not make Guzhen vulnerable, but actually gives it greater resilience.

"The companies are actually very diverse, supplying a variety of different lights aimed at different segments of the market and various international markets," he said.

The town's shopping center is owned by Ou Genquan, still only in his 30s. He started one of the town's larger lighting companies, Zhongshan Kaiyan Lighting Co.

It employs 1,800 both in manufacturing and retail in the town. At the entrance of the central showroom, there is a huge light in the shape of a horse with a price tag of 58,800 yuan.

A spokesperson for his company said the business was weathering the economic storm well.

"There has been no major impact on the Chinese market. There has been a little bit of a slowdown in the export market, although we have regular clients," the spokesperson said.

Chen Zuowang, vice secretary of the Party for the town, said he is confident that Guzhen will move forward and that the strategy of focusing on one major industry has been a success.

(China Daily 08/31/2009 page6)