China industrial policy at work in lingerie themed town

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On a freshly paved avenue in a Chinese rural county, a few doorways down from a dog-meat restaurant, Midnight Charm Clothing produces obvious chemises and “erotic schoolgirl” outfits.

A decade in the past Dongwangji, a town in China’s eastern Jiangsu province, was on the whole rice fields. Today it is the heartland for Chinese production of “emotional hobby underwear” — a euphemism for lingerie.

Local officials are actively helping Midnight Charm and 600 different lingerie producers as section of an initiative to strengthen “feature towns” that focal point on unique industries.

The initiative illustrates President Xi Jinping’s vision of a government-guided market financial system the place the Communist celebration channels non-public funding into favoured sectors, in addition to controlling the largest agencies via kingdom ownership.

Industries need to be chosen “based on each region’s natural endowments and comparative advantages”, the National Development and Reform Commission (NDRC), the nation planning agency, stated in December. “Every vicinity must accurately be aware of the feature town’s intrinsically unique characteristics.”

Most function towns are on the outskirts of larger cities. The Ministry of Housing and Urban Development accepted 127 characteristic cities in late-2016 and a similarly 276 in August. By 2020, the corporation desires to advance 1,000.

Beyond lingerie, different topics include pets, chocolate, drone aircraft, common Chinese opera, glassware, fund management and poetry. Some are intended as visitor attractions, whilst others such as Dongwangji are production centres.
Dongwangji produces 60 per cent of China’s lingerie enterprise output
Lei Congrui, regular manager of Midnight Charm, was once one of the first entrepreneurs in Dongwangji to produce lingerie. The enterprise now employs 20,000 people in the city and the surrounding county, accounting for 60 per cent of China’s whole lingerie production, in accordance to the local government.

Midnight Charm has produced lingerie for a British high-street company that he requested the FT now not to title due to the fact Mr Lei had acted as a subcontractor barring the brand’s knowledge.

“This region didn’t virtually have any different industries except farming, and humans here didn’t definitely know how to do business,” said Mr Lei, whose agency booked revenues of Rmb12m ($1.9m) ultimate year, primarily from export to the US. “I taught a lot of my rivals how to do it. Now some of them are doing higher than me.”

Many characteristic cities are placed in poor, rural areas left behind via China’s fast industrialisation. Experts say that if good executed, the thinking makes sense. But they also warn that the thinking may want to be mis-used to fuel property bubbles or different wasteful investment.

“We must honestly forestall the city actual estate model from migrating to small towns, which causes fees to upward shove and economic risks from property finance to worsen,” said Li Tie, director-general of the China Center for Urban Development, a think-tank under NDRC. “That’s the frequent trouble with characteristic towns.”

Zhong county, a bad vicinity outside the megacity of Chongqing in western China, is searching for to appeal to Rmb5bn in investment for a function town dedicated to aggressive e-sports video gaming. A purpose-built 6,000-seat stadium hosted a country wide competition ultimate year.
Some 20,000 humans in Dongwangji city and the surrounding county are employed in the layout and manufacture of lingerie
But at least 5 different localities are additionally creating on-line gaming towns. And not like Dongwangji’s lingerie industry, Zhong county does now not already have an present e-sports economy.

Town and county-level officers have authorized the layout for Dongwangji to obtain reputable focus as an “emotional activity underwear” function city and are now in search of approval from the Jiangsu provincial NDRC.

Tang Jingdong, the town’s Communist birthday celebration secretary, stated the assignment would enable small manufacturers to cut fees through collective purchasing of uncooked materials such as fabric.

“Once it’s approved, we’ll have land support, fiscal support, and a lot of bank funding will drift in,” stated Mr Tang. “This is a way to assist our local residents get away poverty.”