Industrial progress creates moderate prosperity
Jiangsu shows how to balance socioeconomic trade-offs while creating lively biz environment
A recent week-long visit to many modern factories, beautiful parks, and pleasant villages and farmland in East China's Jiangsu province with a group of international journalists made me think of English poet William Blake's magnificent song Jerusalem. Much of Jiangsu's industry is far from the coal-fired "dark satanic mills" Blake described in his poem, which was written in the 1800s as England first grappled with the economic, environmental and societal consequences of the early stages of the industrial revolution.
Though many challenges remain, Jiangsu is making strong progress toward improving the lives of its citizens by upgrading industry, fighting pollution, and creating services and public goods such as excellent parks and transportation.
Jerusalem expresses societal goals so strongly that it had become the anthem of British workers' movements. Blake's dream of building a new "Jerusalem in England's green and pleasant land" is similar to the Chinese concept of xiaokang.
Often translated into English as "moderately prosperous society", xiaokang actually includes much wider goals than the limited idea of economic growth implied by the English phrase.
First explained by Confucius, xiaokang incorporates ideas about what a person needs to be happy. But, broader than Aristotle's near-contemporaneous idea of human flourishing, xiaokang emphasizes policies that a nation needs to follow to make its people happy.
Certainly, a good level of material prosperity, or raw GDP, is needed. But xiaokang also emphasizes the need to ensure the well-being of everyone, while acknowledging the need for entrepreneurs and businessmen to drive development.
In an explanatory speech delivered to the Fifth Plenary Session of the 19th CPC Central Committee, which was convened from Oct 26 to 29 in Beijing, President Xi Jinping said China can complete the goal of building a moderately prosperous society in all respects on schedule. It is "completely possible" for China to meet the current standards for high-income countries by the end of the 14th Five-Year Plan period (2021-25) and to double the total economic volume or per capita income by 2035, he said.
We journalists had the privilege of visiting a wide variety of factories, farms, natural sites, and historical sites near the cities of Nanjing, Wuxi, and Taicang. These places gave us a good view of the policies that an industrial province is implementing to achieve the economic aspects of xiaokang while improving the environmental and lifestyle aspects.
Jiangsu province has a long history of focusing on economic productivity. In a visit to the restored ancient Meili town in Wuxi, our group learned the story of Taibo, the first son of King Tai of the Zhou Dynasty (c.11th century-256 BC), who established the state of Wu, which was centered on present-day Wuxi on the north side of Taihu Lake.
One of Taibo's first priorities was increasing the productivity of the area by importing new technology from more northern parts of China.
A visit to two factories and one logistics warehouse illustrates Jiangsu's move to upgraded, efficient, and environmentally friendly industry. Plus, these show the importance of the dual-circulation model of the economy, which emphasizes production for domestic demand while still maintaining strong international trade and investment ties.
The main lessons learned from these visits are:
1) Wages are rising and the competition for workers is fierce, so companies are forced to upgrade their production technology. In many cases, factories in Jiangsu are world leaders in efficiency.
2) The best international companies are locating in Jiangsu, both because it offers productive capability and because it gives them access to the Chinese market.
3) Prosperity has spread from first-tier cities to smaller cities around the region. Many smaller cities and counties in Jiangsu offer excellent infrastructure and access to skilled workers while the local governments compete to offer the best business environment.
The SAIC factory making Maxus vehicles near Nanjing is able to produce cars efficiently because it has the lowest inventory of all carmakers, said Wang Ying, director of the plant.
A walk around the plant shows a very clean, productive environment with a large deployment of robots. According to Wang, the average employee in the plant makes 8,000 yuan ($1,207) per month, though that entails a lot of overtime work.
The company decided to locate the plant in Nanjing because Jiangsu has a good business environment and also especially because Nanjing has lots of universities, so needed talented people are available.
The plant focuses mostly on the booming domestic car market, though it exports about 20 percent of its production, mainly to the Middle East and Norway.
Yu Haibin, general manager of Brose Taicang Automotive Systems Co, said his experience is that the local government and businesses treat each other as family members. "Whenever the company finds difficulties or problems, we consult with the relevant government authority. We work with the person in charge of the issue to find solutions. The government treats us the same as local companies and provides high-quality services," he said.
The Cainiao warehouse in Wuxi, a division of Alibaba, also illustrates the upgrading and high-tech transformation of business in Jiangsu, and throughout China.
Partly because of rising wages and great competition for workers, the warehouse has implemented some of the world's most advanced automation to cut the labor count from 2,000 to less than 1,000. A large benefit is that the robots do the dangerous work of moving heavy packages, so workers' injuries have been practically eliminated.
Yao Xinyu, senior manager of the East China region for Cainiao, said the company designs and builds the robots itself. "The key is artificial intelligence. When we deploy more robots, we need to store more data on our system. So only Cainiao is able to support the huge orders from Tmall (Alibaba's online marketplace for established Chinese and foreign brands). We are the only company able to process this huge amount of data because we have the needed algorithms and systems," he said.
Thousands of German plus other European and American companies have moved to Taicang. Matthias Muller, managing director of the German Center for Industry and Trade in Taicang, said that German companies that want to compete in this market need to move here and that a significant portion of manufacturing is moving. "They are finding it harder and harder to compete against Chinese companies that are closing the quality gap," he said.
He praised the business environment in Taicang, noting that it is friendly, convenient and approaching German standards of transparency. "There is lots of competition among places in the southern parts of Jiangsu to attract foreign investment, so that already improves the service attitude," he said.
Taicang has become a center of German companies because of its business environment and because of vast improvements in living environment. "The place has changed from an industrial spot with lots of smoking chimneys to a developed area and a very attractive city. Germans have everything they need here. It is a green city," Muller said.
Xiaokang also focuses on ways to achieve economic growth while protecting the environment, as expressed in President Xi Jinping's statement that "clear waters and green mountains are as valuable as mountains of gold and silver".
Achieving strong environmental protection goals is not easy and often requires a trade-off in lowering measured GDP growth and cutting jobs. In 2018, Jiangsu pledged to reduce air pollution. This will entail cutting steel capacity by 17.5 million metric tons and banning new capacity in the steel, coke, primary aluminum, casting cement and glass sectors, and shutting down all independent coke plants near the Yangtze River and Taihu Lake.
An April 2020 research report by the Development Research Center of the State Council concluded: "In recent years, Jiangsu province has been actively promoting high-quality development. It has made significant progress in improving air quality, continuously reducing the total amount of pollutants discharged from major industries and realizing prominent achievements in urban green development, through optimizing structure, emphasizing the key issues, and implementing comprehensive measures.
"At the same time, Jiangsu's economic development is still facing severe challenges of air pollution for a long period of time to come. For example, the difficulty of fundamentally changing the coal-based energy structure in the short term, bottlenecks in green transformation and upgrading of the industry…"
Our group of journalists was able to visit parks and protected farmland that illustrated strides Jiangsu is making to improve the environment and to provide opportunities for its people to experience nature.
The city of Taicang has retained a lot of its territory as farmland, with three concentrated developed areas around the city. We were able to see the Lianghong Wetland Park and the nearby Hongshan Intelligent Farmland, near Wuxi, both of which were designed to protect the area's water quality.
We saw the magnificent new Tangshan Quarry Park near Nanjing and the stunning flowers of Nianhuawan Park in the Mashan National Scenic Area near Wuxi, which give people access to nature.
Building one of the world's greatest industrial centers while achieving all the aspects of xiaokang takes time and effort. Jiangsu is taking big steps and reaching notable successes in this long journey.
Though many challenges remain, Jiangsu is making strong progress toward improving the lives of its citizens by upgrading industry, fighting pollution, and creating services and public goods such as excellent parks and transportation.
Jerusalem expresses societal goals so strongly that it had become the anthem of British workers' movements. Blake's dream of building a new "Jerusalem in England's green and pleasant land" is similar to the Chinese concept of xiaokang.
Often translated into English as "moderately prosperous society", xiaokang actually includes much wider goals than the limited idea of economic growth implied by the English phrase.
First explained by Confucius, xiaokang incorporates ideas about what a person needs to be happy. But, broader than Aristotle's near-contemporaneous idea of human flourishing, xiaokang emphasizes policies that a nation needs to follow to make its people happy.
Certainly, a good level of material prosperity, or raw GDP, is needed. But xiaokang also emphasizes the need to ensure the well-being of everyone, while acknowledging the need for entrepreneurs and businessmen to drive development.
In an explanatory speech delivered to the Fifth Plenary Session of the 19th CPC Central Committee, which was convened from Oct 26 to 29 in Beijing, President Xi Jinping said China can complete the goal of building a moderately prosperous society in all respects on schedule. It is "completely possible" for China to meet the current standards for high-income countries by the end of the 14th Five-Year Plan period (2021-25) and to double the total economic volume or per capita income by 2035, he said.
We journalists had the privilege of visiting a wide variety of factories, farms, natural sites, and historical sites near the cities of Nanjing, Wuxi, and Taicang. These places gave us a good view of the policies that an industrial province is implementing to achieve the economic aspects of xiaokang while improving the environmental and lifestyle aspects.
Jiangsu province has a long history of focusing on economic productivity. In a visit to the restored ancient Meili town in Wuxi, our group learned the story of Taibo, the first son of King Tai of the Zhou Dynasty (c.11th century-256 BC), who established the state of Wu, which was centered on present-day Wuxi on the north side of Taihu Lake.
One of Taibo's first priorities was increasing the productivity of the area by importing new technology from more northern parts of China.
A visit to two factories and one logistics warehouse illustrates Jiangsu's move to upgraded, efficient, and environmentally friendly industry. Plus, these show the importance of the dual-circulation model of the economy, which emphasizes production for domestic demand while still maintaining strong international trade and investment ties.
The main lessons learned from these visits are:
1) Wages are rising and the competition for workers is fierce, so companies are forced to upgrade their production technology. In many cases, factories in Jiangsu are world leaders in efficiency.
2) The best international companies are locating in Jiangsu, both because it offers productive capability and because it gives them access to the Chinese market.
3) Prosperity has spread from first-tier cities to smaller cities around the region. Many smaller cities and counties in Jiangsu offer excellent infrastructure and access to skilled workers while the local governments compete to offer the best business environment.
The SAIC factory making Maxus vehicles near Nanjing is able to produce cars efficiently because it has the lowest inventory of all carmakers, said Wang Ying, director of the plant.
A walk around the plant shows a very clean, productive environment with a large deployment of robots. According to Wang, the average employee in the plant makes 8,000 yuan ($1,207) per month, though that entails a lot of overtime work.
The company decided to locate the plant in Nanjing because Jiangsu has a good business environment and also especially because Nanjing has lots of universities, so needed talented people are available.
The plant focuses mostly on the booming domestic car market, though it exports about 20 percent of its production, mainly to the Middle East and Norway.
Yu Haibin, general manager of Brose Taicang Automotive Systems Co, said his experience is that the local government and businesses treat each other as family members. "Whenever the company finds difficulties or problems, we consult with the relevant government authority. We work with the person in charge of the issue to find solutions. The government treats us the same as local companies and provides high-quality services," he said.
The Cainiao warehouse in Wuxi, a division of Alibaba, also illustrates the upgrading and high-tech transformation of business in Jiangsu, and throughout China.
Partly because of rising wages and great competition for workers, the warehouse has implemented some of the world's most advanced automation to cut the labor count from 2,000 to less than 1,000. A large benefit is that the robots do the dangerous work of moving heavy packages, so workers' injuries have been practically eliminated.
Yao Xinyu, senior manager of the East China region for Cainiao, said the company designs and builds the robots itself. "The key is artificial intelligence. When we deploy more robots, we need to store more data on our system. So only Cainiao is able to support the huge orders from Tmall (Alibaba's online marketplace for established Chinese and foreign brands). We are the only company able to process this huge amount of data because we have the needed algorithms and systems," he said.
Thousands of German plus other European and American companies have moved to Taicang. Matthias Muller, managing director of the German Center for Industry and Trade in Taicang, said that German companies that want to compete in this market need to move here and that a significant portion of manufacturing is moving. "They are finding it harder and harder to compete against Chinese companies that are closing the quality gap," he said.
He praised the business environment in Taicang, noting that it is friendly, convenient and approaching German standards of transparency. "There is lots of competition among places in the southern parts of Jiangsu to attract foreign investment, so that already improves the service attitude," he said.
Taicang has become a center of German companies because of its business environment and because of vast improvements in living environment. "The place has changed from an industrial spot with lots of smoking chimneys to a developed area and a very attractive city. Germans have everything they need here. It is a green city," Muller said.
Xiaokang also focuses on ways to achieve economic growth while protecting the environment, as expressed in President Xi Jinping's statement that "clear waters and green mountains are as valuable as mountains of gold and silver".
Achieving strong environmental protection goals is not easy and often requires a trade-off in lowering measured GDP growth and cutting jobs. In 2018, Jiangsu pledged to reduce air pollution. This will entail cutting steel capacity by 17.5 million metric tons and banning new capacity in the steel, coke, primary aluminum, casting cement and glass sectors, and shutting down all independent coke plants near the Yangtze River and Taihu Lake.
An April 2020 research report by the Development Research Center of the State Council concluded: "In recent years, Jiangsu province has been actively promoting high-quality development. It has made significant progress in improving air quality, continuously reducing the total amount of pollutants discharged from major industries and realizing prominent achievements in urban green development, through optimizing structure, emphasizing the key issues, and implementing comprehensive measures.
"At the same time, Jiangsu's economic development is still facing severe challenges of air pollution for a long period of time to come. For example, the difficulty of fundamentally changing the coal-based energy structure in the short term, bottlenecks in green transformation and upgrading of the industry…"
Our group of journalists was able to visit parks and protected farmland that illustrated strides Jiangsu is making to improve the environment and to provide opportunities for its people to experience nature.
The city of Taicang has retained a lot of its territory as farmland, with three concentrated developed areas around the city. We were able to see the Lianghong Wetland Park and the nearby Hongshan Intelligent Farmland, near Wuxi, both of which were designed to protect the area's water quality.
We saw the magnificent new Tangshan Quarry Park near Nanjing and the stunning flowers of Nianhuawan Park in the Mashan National Scenic Area near Wuxi, which give people access to nature.
Building one of the world's greatest industrial centers while achieving all the aspects of xiaokang takes time and effort. Jiangsu is taking big steps and reaching notable successes in this long journey.
