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"World Factory" Dongguan Machine "**"
**"World Factory" Dongguan's "Machine" Revolution**
In 2005, the number of CNC weaving machines used by woolen garment manufacturers in Dalang Town was just 2,000. By 2008, that number had doubled to 4,000, and by 2009, it had jumped to 6,000. This marked a significant shift in the textile industry, driven by a growing demand for automation.
Wang Yongzhou, a 27-year-old salesman from Zhejiang, has finally reached his “best day†since starting his career. He sells computerized horizontal weaving machines—machines that use computer programming to control the entire weaving process. A year ago, he sold only two or three units per month. Now, he sells one every day. “The most important thing is that we’re out of stock,†he said with excitement. “If you buy more than five sets, you get twice the discount; if you buy more than ten, you get four times. But it will take until September to deliver.â€
His company, Tiger King CNC, is based in Zhejiang and previously manufactured automatic mahjong machines. Now, they’ve shifted focus to the new horizontal loom business. In the first half of last year, they opened a distribution center in Dongguan, shipping machines from Zhejiang for sale. Within a year, sales surged so much that the CEO decided to invest 50 million yuan to build a factory in Dongguan next month.
Wang’s store is located on Yinlang Road in Dalang Town, a major woolen textile hub in China. Two years ago, this two-lane road wasn’t popular. But in the second half of last year, the area became a hotspot for computerized horizontal weaving machines, which now weave fabric efficiently and quickly.
This “machine town†has attracted 45 CNC loom companies, with one-third of them established after 2009. In November last year, over 50 textile machinery companies set up more than 150 booths at the 8th Dalang Meeting. For the first time, the organizing committee had to expand exhibition areas to accommodate the surge in demand. Even with double the original space, it was still not enough.
According to statistics, about 88,900 CNC looms were produced and sold in Dalang in 2009, mostly to the Pearl River Delta. Dalang and the nearby Changping Town alone consumed over 4,000 units.
The machine-buying trend isn’t limited to the textile industry. Dongguan Bojin Machinery and Equipment Factory, which produces toy-making equipment, is also experiencing strong growth. Their cotton-filling machine can replace 20 workers. Sales Director Wang Junping said that last year, they sold over 70 units, and this year, they expect to sell at least 200.
Another popular machine is the plug-in machine, used for inserting electronic components into devices like home appliances, energy-saving lamps, and LED displays. Currently, there are only two domestic manufacturers: Dongguan Xinze Valley and Canbei Electronics.
“Sales used to be stable at around 150 units per year,†said Chen Zhuozhong, a sales director. “But this year, orders have already reached 450 units.†Zheng Ke Electronics, which opened in the second half of last year, is also selling hot. On July 19, the author saw a red banner in their factory stating that sales had exceeded 100 units. Workers were working overtime even during mealtime. General Manager Gan Ning said that orders have already been placed through October. “We don’t have enough people to pick up the goods,†he admitted.
Donglian, the first and only leasing company in Dongguan, also felt the heat. They started leasing large-scale construction and medical equipment in 2006 but found little success. It wasn’t until late 2009 that they shifted to leasing labor-intensive industrial equipment like plug-in and placement machines. Since then, their business volume has soared, reaching 1.5 billion yuan.
**Man and Machine: Reversing the Abacus**
Everyone involved in buying or selling machines says the same thing: labor costs are too high. A local business owner told the author that he had to work overtime at night, but no one showed up. Frustrated, he bought three plug-in machines.
What caused this sudden wave of machine replacement? Take the computerized horizontal weaving machine as an example. Introduced in 2004, it significantly reduces labor needs. Previously, workshops used hand-held machines and automated belt conveyors, each requiring a worker. Now, a single worker can manage 6–8 machines.
Wang calculated the cost savings for the author. Textile workers earn between 1,500 and 1,800 yuan per month, plus meals and lodging, totaling at least 2,000 yuan. With a machine, labor costs drop to one-sixth to one-eighth of the original. A machine costing 80,000 to 150,000 yuan can pay itself off in one or two years.
The plug-in machine offers even greater savings. According to Zheng Ke Electronics’ General Manager Gan Ning, a machine line requires only 3 workers, while a manual line needs 14. At 1,500 yuan per person per month, the annual cost difference is nearly 200,000 yuan.
Cai Lihui, General Manager of Guangzhou Tema Sound Factory, was drawn in by these savings. He bought five plug-in machines, replacing 80% of manual work. The cost savings matched those of Gan Ning.
This transformation was unimaginable decades ago. In the 1980s, China began taking over global manufacturing, relying on migrant workers who could assemble tiny parts without complaint for just a few hundred yuan a month.
Back then, machines were considered expensive. A German STOLL CNC weaving machine cost between 250,000 and 400,000 yuan, while a Japanese imported machine ranged from 350,000 to 450,000 yuan. With maintenance costs of 20,000–30,000 yuan annually, it would take 5–7 years to recoup the investment.
But since 2004, this trend has reversed. Migrant workers spread across the Pearl River and Yangtze River Deltas, and even central provinces saw rising wages. Labor costs nearly tripled over a decade.
Meanwhile, domestic technology improved, lowering machine prices. A Chinese computerized horizontal weaving machine now costs 80,000–150,000 yuan—less than a quarter of imported models. Maintenance is cheaper, and payback periods are just 1–2 years.
Even more importantly, younger generations of migrant workers differ from their predecessors. They no longer tolerate long hours or strict rules. Many prefer to work in internet cafes or leave if conditions aren’t right.
Foxconn’s recent labor issues and Honda’s incident highlighted these changes. Companies raised wages to retain workers. Foxconn increased salaries by over 60%, and cities like Guangdong, Zhejiang, Beijing, and Tianjin also raised minimum wages.
Yongyong, a second-hand equipment dealer, saw this shift firsthand. He recounted a story: a Dongguan boss called a team leader to announce overtime, posted the notice, but no one showed up. So he bought three plug-in machines instead.
**Everything Just Started**
“Our current machines are equivalent to Western levels from the 1980s,†said Dai Yong bluntly.
Since the reform and opening up, China’s rapid economic growth relied heavily on a booming population. From 1978 to 1998, labor contributed the most to growth. However, this “demographic dividend†is fading. Cai Wei of the Chinese Academy of Social Sciences predicted that China’s “population bonus period†ended around 2015.
Japan went through a similar transition in the 1970s, shifting from cheap labor to high-tech industries. It led to the highest robot usage rate in the world.
China surpassed Japan last year to become the second-largest producer of industrial goods after the U.S., but its industrialization level still lags. “Our machines are only at 1980s Western levels,†Dai said.
According to Nomura Securities, the ratio of machinery used in Chinese factories rose to 27% in March–May this year, higher than previous years. However, this is still far below Japan’s 82%.
Compared to the West, China’s automation progress is slower, due to its large and cheap labor force.
In Dai’s view, the last machine-driven boom in the Pearl River Delta occurred around 2000. Back then, he and his partners worked on imported machines, fixing them and reselling them at lower prices.
The second-hand e-waste business has been going on for 10 years. When domestic manufacturers emerged, Dai switched to other ventures. “With rising labor costs, mechanization and automation are irreversible trends,†he said.