Companies transform, upgrade in Kunshan

City encourages innovation to keep top county-level GDP

In the Wusongjiang park of Foxconn Technology Group in Kunshan, East China's Jiangsu province, mechanical arms have replaced workers in many procedures, such as polishing, assembling and detecting.

While the number of the workers at Foxconn, Apple's biggest supplier, has reduced from more than 80,000 to about 40,000, the output value of the group has doubled.

Yang Minglu, deputy general manager of the group, said that after being based in Kunshan, a county-level city under the administration of Suzhou, for more than 10 years, the group has embraced transformation constantly.

"A robot costs about 130,000 yuan ($20,400) a year, while a worker costs about 50,000 yuan," said Yang. "Robots can work 24 hours a day, a workload equal to that of three workers. Some versatile robots can even do two jobs that would otherwise need two people to do, which makes them each equivalent to six workers."

Foxconn's Kunshan group now uses more than 2,000 mechanical arms.

Apart from mechanical arms, the group has also established a detection center in Kunshan, which includes laboratories researching top techniques, such as 3D engineering and verification, metal materials and plastic materials.

The output value of the detection center reached 65 million yuan in 2014. It now provides services to about 1,500 companies in neighboring areas.

Statistics show that Foxconn owns 7,000 patents on the mainland. The State Intellectual Property Office has received more than 8,600 applications from the group.

According to Yang, a new energy material - solar cell conductive paste - is being researched and will be manufactured in Kunshan. Its output value is estimated to reach 200 million yuan in 2016.

Foxconn is one of many companies that hopes to transform in Kunshan, a city that encourages innovations and has put forward several policies to support this.

Xu Huimin, Party chief of Kunshan and deputy mayor of Suzhou, said that transformation and innovation are essential for the city to keep its status as China's No 1 county-level city in terms of GDP.

Located in the southeastern part of Jiangsu province, between Shanghai and Suzhou, Kunshan lies within the Yangtze River Delta, one of most developed areas in China in terms of economy. Last year, Kunshan's GDP reached 300 billion yuan.

As a county-level city, Kunshan has attracted one-ninth of the mainland's investment from Taiwan.

"Kunshan used to consume energy and rely on labor, land and resources to develop its economy," said Xu. "Those elements cannot support the city's sustainable and healthy development in the future."

Xu said Kunshan should take opportunities brought about by China's Made in China 2025 plan and Germany's Industry 4.0 to fully develop its potential, as the city is also home to a cluster of German-invested companies.

"The local government will continue to transfer power to lower levels, create a business-friendly environment, and let the market play its essential role," Xu said.

According to Kunshan's Bureau of Finance, the city will allocate at least 2 billion yuan every year to establish a transformation and upgrading fund, which will be used to support local enterprises for innovation and bringing in high technologies.

Each high-level foreign expert will be financed with 100,000 yuan to 500,000 yuan to support their programs, and professionals employed by local companies will be rewarded 12,000 yuan to 36,000 yuan after evaluation, the bureau said.

Contact the writers at zhoufurong@chinadaily.com.cn and cangwei@chinadaily.com.cn

(China Daily 11/23/2015 page22)