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Nation
Changing Fortunes
How lanterns, salt and dinosaurs are giving new life to an old industrial city in Sichuan
By Wei Yao | NO. 50 DECEMBER 14, 2017

Dinosaurs and salt wells are featured in the Lantern Festival in Zigong, Sichuan Province, on February 9 (WEI YAO)
For Zigong, a southwestern city with a population of 3 million, winter is perhaps its most glamorous season. Every year during the Chinese New Year holiday, a large-scale Lantern Festival, famed as one of the most gorgeous in the country, is held there, brightening up this usually grey, industrial city in Sichuan Province.

The centuries-old tradition of the lantern festival has gained increasing popularity in recent years, especially since Zigong was featured on China's premiere national television network CCTV. During the festival, tourists flock to the city from neighboring towns and provinces, its streets awash with visitors. But the excitement soon subsides, and after the festival the city returns to relative obscurity.

Now the city is striving to change the situation. "Zigong is accelerating its transformation from an old industrial city into a pioneer of China's Belt and Road Initiative and a premier destination for cultural tourism," the city's deputy mayor Li Hongqiang told Beijing Review on November 14.

A visitor takes pictures of dinosaurs at the plant of Zigong Gengulongteng Science and Technology Co. Ltd. on November 17 (WEI YAO)
Rise and fall 

Over the past five years, the Zigong Municipal Government has closely adhered to national development plans by encouraging the development of the city. Li Gang, Secretary of the Zigong Municipal Committee of the Communist Party of China (CPC), told Beijing Review of the city's plans to take advantage of the opportunities availed by the 19th CPC National Congress and the Belt and Road Initiative. This includes accelerating the construction of a transportation system that facilitates foreign trade, integrating itself with Sichuan Province's free trade area and a strategy which looks to strengthen connections with Europe. He also listed plans to build a national-level bonded area and unleash the vitality of various market players.

Li Hongqiang explained the strategy that he believes will achieve this goal of rejuvenation. He said that the city will intensively develop six emerging, hi-tech industries including turbine manufacture, bio-medicine, and new energy vehicles. It will also upgrade the region's traditional industries including salt chemicals, food processing and textiles, whilst investing in the electronic information, graphene and shale gas industries.

Zigong was once an industrial power house in the planned economy of the latter 20th century. Locals proud of this booming past like to point to the letter "C" emblazoned on the number plates of the city's cars as proof of its illustrious past. Back in the 1990s, the alphabetization system for number plates indicated a city's political and economic status within the province. The "C" on Zigong's plates shows that in terms of importance it trailed only behind Chengdu, the provincial capital, and Chongqing, then still under the jurisdiction of Sichuan Province.

Historically, Zigong thrived on salt. Records show that brine wells were sunk in the area nearly 2,000 years ago and during the Tang Dynasty (618-907) salt produced in the region was sent to emperors as a form of tribute. During the turbulent years of the mid-19th century and later during World War II the government adjusted its regulation of the salt industry and Zigong's well salt was sold to other provinces in large quantities, fueling the city's prosperity, said Cheng Longgang, the curator of the Zigong Salt History Museum.

After the founding of the People's Republic of China in 1949, Zigong developed into a base for salt chemicals in southwest China, and the chemical industry became the city's mainstay. Later, from the 1960s, a large number of big machinery manufacturers represented by the Dongfang Boiler Plant were established in Zigong, establishing the city as one of the strongest manufacturing areas in the province.

However, as the market economy spread across China in the 1990s, Zigong's economy, hampered by an outdated industrial structure and poor transportation, began to stagnate. Many enterprises ended up bankrupt.

In a workshop of Sichuan CRUN Co. Ltd., a customer from India inspects a product together with a staff member of the company on November 16 (WEI YAO)
Bringing the past to life 

The 9G Group was one of the companies affected by Zigong's decline. The company is the largest salt producer in Zigong, and their factory is almost 80 years old. Fu Gangyi, the group's chairman who started working in the salt factory after graduation, recalled the difficult period in the 90s. He said that in 1999, the year he became chairman at just 39 years old, the group had been in the red for the past eight years. Its debt asset ratio was 112.46 percent, its annual per-capita output was only 6,300 yuan ($952), and its designed production capacity was 570,000 tons. The equipment, mostly acquired in the late 1970s and early 1980s, was at least 20 years behind domestic peers, and 30 years behind international competitors.

"Almost everyone felt that the group would die, but I was unwilling to give up," Fu told Beijing Review. After becoming boss, a determined Fu launched an audacious reform effort. He downsized the staff, shed the company's debt, and invested heavily in technological innovation. The group began developing vacuum salt making equipment, started processing salt with biotechnology, diversified their products and expanded overseas, becoming the first Chinese well salt firm to enter the Japanese market.

After years of development, the group has since expanded to three production facilities in Zigong, Sichuan's Suining City and Hubei's Yingcheng City. Now, with an annual output of nearly 3 million tons of salt, it boasts the only nationally certified, corporate based technology center in the salt industry, a design and research institute, and a national well and rock salt industry information center. The group is now an industry standard for well and rock salt technology.

From January 1, the Central Government reforms the system on salt sale, allowing salt producing enterprises to distribute their product, promising a new development opportunity for the 9G Group.

As the major player in Zigong's salt industry transforms itself, so does another company in the city. Atlantic China Welding Consumables Inc., previously the China Welding Electrode Plant, was the first manufacturer of welding consumables in China. Founded in 1949, the company also thrived in the era of the planned economy, but had to transform to keep itself afloat as the tide of the market economy began lapping at the industry's shores.

It adopted a shareholding system in 1996 and was listed on the Shanghai stock exchange in 2001, becoming the only state-owned enterprise in the welding industry to be listed at that time. In the ensuing two decades, the company has driven its development with technology and in the five years since 2012, research and development has become its core competency.

"The only way to guarantee a technological lead is to continuously invest money and manpower," Li Xinyu, Chairman of the company, told Beijing Review. "Now only welding materials produced by our company are used to build nuclear power plants in China."

Advanced technology and quality products have made the company not only a leader in the domestic industry, but also an exporter with an increasing share of supply to the international market. In 2016, the company exported welding materials exceeding 20,000 tons and worth more than $12 million. According to Li Xinyu this number is expected to be even higher in 2017.

Yet the company's goals don't stop there. Li explained that in the future, they will not only provide welding materials, but also plan to make breakthroughs in welding technology, becoming something of a world-famous "welding expert" as well. He believes that packaging products and services together will bring greater profits and development to these kinds of enterprises.

The plant of an old salt factory in Zigong will be converted to an art museum, November 15 (WEI YAO)
Modern and green 

While companies in Zigong's traditional industries are upgrading themselves, new ones are beginning to rise as well. Established in 1992, Sichuan CRUN Co. Ltd. is looking to energy-saving technology, environmental protection and alternative energies, and aspires to become a global leader in clean energy equipment and solutions according to Luo Yongzhong, the company's chairman.

Twenty-five years ago the company started as a factory producing energy equipment, but through founder Luo Lihua's continuous drive for expansion, the company was listed on the Shenzhen Stock Exchange in 2008, one of just four publicly listed companies in Zigong. The company's approach is aligned with national development strategies, which has helped it to yield sustained profits, according to Luo, who believes that the country will continuously support new energies.

Also committed to energy conservation and environmental protection is Western Power, another publicly listed companies based in Zigong. Its vice president Lin Yu said Western Power's main business is to manufacture special boilers and other power generation equipment that is more energy efficient and environmentally friendly. Western Power targets both domestic and international markets, especially countries along the Belt and Road, and the company's business plan displayed in its exhibition hall could be mistaken for a map of the Belt and Road routes.

In recent years, especially since 2015, the company has received big orders from Asian and African countries along the Belt and Road. It has received contracts to build large power stations in countries such as Pakistan, India, Thailand, South Korea, Bangladesh, Laos and Senegal. Most of these power stations generate electricity by using garbage or clean and efficient energy sources, making a significant contribution to local green energy development.

Beyond the transformation taking place within Zigong's top companies, the city itself is taking an active role in local regeneration. In 2015 the city government set up an aviation industrial park for companies with businesses focused on the local airport such as providing operation services, engine parts and materials for gas turbines. So far, seven projects are under construction, while agreements have been signed to locate 17 other projects in the park.

The municipal and provincial governments are also making efforts to improve the city's transportation, which has for a long time been seen as a major obstacle to the city's development. A high-speed rail, the first to pass through the city, will be put into operation in 2019, while a second is in the planning stage. A fast, modern railway, fully integrated into the national network is expected to significantly boost the region's economic growth.

A tourism revolution 

Although investment has been made to update Zigong's traditional industries, in the mind of the city's planners the future will be driven mainly by the modern service industry. Access to the high-speed rail network will establish it as an important transportation hub in southern Sichuan Province, in turn boosting the development of the tourism industry.

The best resources Zigong has at its disposal for enhancing tourism are dinosaurs, salt and the lantern festival, all of which are proving popular. Yet for a long time Zigong's tourism industry has been underdeveloped. Most tourists, drawn to the city by the lantern festival during the Lunar New Year, stay in town for just 12 to 24 hours, not long enough for them to explore the city's other cultural delights, such as museums featuring dinosaurs and the city's history of salt.

In past five years, Zigong has tried to reform its culture and tourism industries, particularly those connected to lanterns. The city currently has more than 600 companies producing lanterns, which have provided stock for exhibitions and festivals all over China, and flagship companies such as Dengcai Cultural Industry Group and Haitian Culture have taken lanterns to the world.

Dengcai is a conglomerate of 14 lantern companies in Zigong. The group's chairman Huang Dechun told Beijing Review the group has participated in lantern exhibitions at home and abroad, and its three globally registered lantern festival brands have been well received in Europe and North America. During the 2017 G20 Summit held in Hamburg this July, Dengcai hosted a lantern festival in the city much to the pleasure of the heads of state and other delegates attending the conference.

Zigong has been actively tapping its dinosaur resources too. Home to one of the most famous dinosaur fossil excavation sites in China, and the world's third largest dinosaur museum, Zigong has turned its attention to creating dinosaur related products for tourists, and is even building a dinosaur theme park in an effort to boost the number of visitors.

Also keen to ride the prehistoric wave, a batch of dinosaur-themed companies has sprouted up in the city, with Zigong Gengulongteng Science and Technology Co. Ltd. being one of them. Inspired by a simulated dinosaur exhibition held in Zigong by a Japanese organization 10 years ago, Gengulongteng's general manager Guo Qihong and his partners decided to set up a company producing animatronic products, or giant moving dinosaurs. The company is now a leader among the city's 30 plus simulated dinosaur producers. These producers make more than 90 percent of all simulated dinosaurs in the world, displayed in parks, museums, malls and exhibition halls around the globe.

Salt, too, remains at the heart of Zigong's tourism oriented revival. The Shenhai Well has been ever-present throughout the city's rise, fall and resurgence, and offers tourists a taste of the city's history. It was the world's first man-made well to reach a depth of more than 1,000 meters, and is well preserved as it continues to produce well salt today.

Around 1 km from the Shenhai Well is an obsolete salt factory founded in 1957. It is a site which showcases the area's industrial heritage with old factory buildings, cooling towers and power-generation equipment, which serve to remind visitors of the industrial process which has made Zigong what it is today. In the future, art galleries, cafeterias and creative art workshops are to be built here, transforming it into an area similar to Beijing's popular 798 Art District.

Endowed with such potential and so much determination to transform its fortunes, Zigong is at last bouncing back to become the vibrant city it once was.

(Reporting from Zigong, Sichuan Province)

Copyedited by Laurence Coulton 

Comments to weiyao@bjreview.com 

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