Digital industrial clusters prosper in China

Digital industrial clusters prosper in China
By Wang Zheng, Peoples Daily
The rapid development of the digital economy over the recent years in China has led to a tide of
the construction of digital industrial clusters.
A batch of digital industrial clusters with international competitiveness has taken shape and grown
strong across China, injecting fresh impetus into the high-quality development of the Chinese
economy.
Digital industrial clusters, led by new development philosophy, include enterprises and relevant
organizations driven by digital factors and engaged in digital product manufacturing, digital
services, and digital technology application. They have strong core competitiveness.
According to China 14th Five-Year Plan (2021-2025) on the development of the digital
economy, the country aims to raise the proportion of the added value of core digital economy
industries in its GDP to 10 percent in 2025, up from 7.8 percent in 2020.
The China Center for Information Industry Development (CCID) said over 60 percent of China
25 advanced manufacturing clusters are engaged in the digital economy. The prospering
development of the digital economy is driving the upgrade of industrial clusters.
China Speech Valley, an industrial base focusing on speech recognition technologies in Hefei, east
China Anhui province, reported revenue of 137.8 billion yuan ($19.71 billion) from its main
businesses last year. Led by leading artificial intelligence and speech technology company
iFLYTEK, the industrial base is home to 1,423 enterprises. The annual average growths in its
output value and number of enterprises have both exceeded 30 percent over the past five years.
A digital security industrial cluster in Hangzhou, east China Zhejiang province, is home to
leading Chinese video surveillance product and solution provider Dahua Technology, top-notch
manufacturer and supplier of video surveillance equipment Hikvision, as well as over 4,300 other
innovative enterprises engaged in the industry. The revenue of core businesses of the cluster
reached 272.08 billion yuan ($38.9 billion) last year, up 17.2 percent year on year. It has the
worlds largest two producers of digital video recorders and cameras, with a market share of over
50 percent.
Represented by global leading provider of optical products Yangtze Optical Fibre and Cable Joint
Stock Limited Company and laser technology developer Huagong Tech, the Optics Valley in
Wuhan, central China& Hubei province, has received total investment exceeding 200 billion yuan
during the past three years and owns more than 15,000 optoelectronic enterprises. The industrial
cluster has witnessed a series of breakthroughs, such as the making of the world first 128-layer
3D NAND flash memory chip and China& first 400G silicon photonics optical module.
Platform-based synergetic online development and production is one of the features of digital
industrial clusters. For instance, Chinese tech firm Xiaomi, establishing over 100 enterprises in its
ecological chain in the Beijing-Tianjin-Hebei region, Yangtze River Delta and Pearl River Delta,
has created more than 100 hot-selling products. So far, the Chinese company has gathered over
4,000 online development teams on its platform.
The new model of work division is another feature of digital industrial clusters. Gao Yingmai,
director of the Digital Economy Strategy Research Office of CCID, told Peoples Daily that
different from the models of one-to-one division adopted by traditional industrial clusters, digital
industrial clusters use platforms to connect businesses.
Data alignment and interaction as well as artificial intelligence-enabled analysis make industrial
collaboration more precise and efficient, Gao explained.

For instance, these platforms could detect shortages of key spare parts and then seek suppliers, and
could also predict fluctuations in the market and thus ensure a reasonable inventory and timely
production, Gao noted.
Digital industrial clusters can achieve synergy in R&D, orders, production, quality, inventory and
services, said Fan Qiuci, an expert with the AliResearch, a research arm of Alibaba Group. Fan
said the clusters can digitalize and align various systems for a closed synergy loop, so as to
stabilize and strengthen industrial and supply chains,
An official with the Ministry of Industry and Information Technology said that China will
strengthen digital industrialization, industrial digitalization and its data-to-value capability, so as
to build digital industrial clusters with international competitiveness in different fields in a phased
manner.
According to the official, the country will accelerate the development of industrial clusters, with
market potential and dominated by innovative players. China will also build a development pattern
led by major enterprises, followed by small- and medium-sized enterprises and constantly joined
by innovative companies, to continuously integrate the digital economy with the real economy and
traditional industries.
Besides, China will also speed up its efforts to build a national big data center and actively explore
the new models of data flow and transaction, to fully turn digital dividends into development
potential, the official added.