Town-based factory district

Summary

Jinjie town, Tiandeng county is located in a mountainous region in southwestern China with scarce arable land. Many people from the area tended to leave in search of better opportunities, and those who stayed often faced poverty. By establishing a new factory district, the county government improved infrastructure, trained Jinjie natives, employed more than 500 people and reduced poverty.

Challenge/Problem

Tiandeng county in the Guangxi Zhuang Autonomous Region is mountainous, as is often the case with China’s impoverished counties. The county’s residents have tended to rely on traditional forms of agriculture to work the region’s scarce arable land. As a result of these difficulties, many people have chosen to move to other areas for work, which has led to many children and seniors being left behind in Tiandeng’s towns and villages. This phenomenon has created a cycle in which there is not enough labour for development, and people become even more reluctant to stay in the areas they are from. Women often lack childcare resources, which limits their ability to work. Tiandeng’s Jinjie town was especially in need of assistance. It suffered from poverty, weak infrastructure, and insufficient business opportunities.

Solution

The Tiandeng government decided to establish a special district in Jinjie town for new factories in order to increase incomes, diversify economic activity and attract the area’s young people to work there. The structure improves productivity by making it possible for the government to offer various services in a centralized area and by making it easier for the companies that come to the area to cooperate and exchange materials. The Tiandeng government has implemented favourable policies for companies that established factories in Jinjie and the people who work there. It:

• Waives water, electric and rent bills at the plants in the district;
• Helps furnish workshops and provides assistance with advertising and hiring;
• Has built affiliated facilities such as kindergartens, dining halls and dormitories;
• Established a 2,000-yuan (US$281) per month minimum wage, offers beneficial social insurance packages and provides training; and
• Helps factory owners get loans.

Many opportunities were created for Jinjie’s residents, especially women and young entrepreneurs. Women gained the ability to work near their homes, which is particularly useful for those with children. Young entrepreneurs were able to start new businesses and create new factories in order to expand existing endeavours.

The plants operate under standardized safety regulations issued by Tiandeng in order to ensure good practices. They must participate in creating a database for factory management and poverty reduction that makes information transparent and available to employees. Factories are also required to cover their staff members’ social insurance.

This solution is intended for areas that are experiencing difficulties similar to those that Jinjie faced – i.e. overreliance on agriculture despite small amounts of arable land, populations that tend to relocate for work, weak infrastructure – and want to attract new forms of business to create jobs and reduce poverty.

Results

The following results have been achieved as of the end of 2018:

• Poverty has been reduced in Jinjie. More than 500 jobs were created that pay an average of 2,000 yuan (US$282) to 3,000 yuan (US$422) per month.
• The factory district has led to improvements in lighting, parking, sports facilities and other forms of infrastructure and public services.
• Social services in the area have been enhanced. Childcare centres were created so that the children of factory employees have somewhere to go during work hours, which has decreased the burdens that women used to experience in Jinjie and made it possible for them to engage in greater amounts of work.   
• Jinjie’s residents have improved their abilities. They have learned new skills while working at the plants, and regular training is making it possible for them to become professionals in certain fields.

Lessons Learned/Potential for Replication

Tiandeng’s main poverty reduction concept entailed creating a special district where factories would be constructed, which helped diversify Jinjie’s economy. The zone utilizes space efficiently, which is important in mountainous areas, and improves production efficiency.      

Instead of creating conducive policies and waiting for companies to come, Tiandeng government actively sought out good companies, invited them to build factories in the area and provided services for them and their employees. These kinds of efforts alleviated business leaders’ concerns and made the project more effective.

Citizens living in poverty, factory owners, government officials and other stakeholders have different interests and points of view, and pursuing the type of project that Tiandeng executed requires collective effort. Timely communication plays an important role in the process.

The model has been a success. It has already been replicated in other towns in Tiandeng and could be implemented elsewhere as well.

Next Steps

Tiandeng’s plan reduced poverty in Jinjie, but some challenges persist. Most of the jobs at the factories are labour-intensive, and the industries that they operate in are harmful to the environment. Policy dependency is another issue. The factory district concept that Tiandeng came up with only works in areas that the government is able to devote a fair amount of resources to. The county is currently working on tackling these kinds of difficulties, implementing and promoting the system in other areas and adjusting it as necessary.