Datang is a small town unknown to many Chinese. However, it enjoys a great reputation as the largest sock production base in China.
The tiny town in eastern China's Zhejiang Province has a complete industrial chain, from sock-making machine manufacture and production of raw materials, to sock production and sales.
After 20 years of booming sock business, people in Datang realized that increased output alone couldn't make it the world's sock capital. To be competitive in the international market, they needed to innovate.
In today's China Horizons, Wang Jing will introduce to you the innovative new policies driving Datang's economy.
People in Datang began making socks in the 1980's, and the town experienced rapid development over the following decade.
The small town that started with only 1,000 residents has turned into the world's capital of socks, with a population of 60 thousand. Datang can now produce 8 billion pairs of socks each year.
Guo Jianbo, head of the town, said that three out of every 10 pairs of socks in the world are made in Datang.
"There are three special things about Datang: The town has a big reputation, the small industry has created a big market, and tens of thousands of households are small factories."
The sock industry in Datang is representative of the economic model in Zhejiang Province, where towns and villages usually become clusters for a certain industry, such as shoes, stationery, T-shirts or pearls.
In Datang's case, its business has spread to 12 surrounding towns and villages. The production cluster, of which Datang is the center, supports over 100 thousand employees.
Statistics show that the entire sock district had over 100 thousand sock machines in 2006, with an annual output of 20 billion pairs of socks and a revenue of 28 billion yuan.
However, people in Datang were not satisfied with what they had achieved.
Guo Jianbo says, according to economic rules, an industry will shift its focus after 15 to 20 years. Datang has already boomed for 20 years. How could it challege the so called rule?
"We have been thinking about the future of our sock industry. We came up with an idea of establishing Datang as the headquarters of the sock industry, to keep the key part of the industry in Datang. We established a public service platform in 2007 to carry out the idea."
The platform cost 20 million yuan, or about 3 million US dollars. It includes a sock research institute, a quality testing center, an e-business center and a certification center. It also has a Web site for Datang socks and a regional information network.
The research center designs an average of 1,000 socks each day for more than 500 customers. There are already millions of designs in the database, and if customers still can't find what they need, the institute can design socks rapidly: It can finish a design within 10 seconds. This way, the sock companies are staying competitive in the market.
The public service platform has enjoyed a good reputation among sock companies since it went into operation in September 2007. It is estimated that the platform can save 200 million yuan, or about 30 million US dollars, for sock companies each year. Their orders have increased by two billion yuan as a result.
Meanwhile, the local government is encouraging companies to cultivate famous brands. It offers an award of 500,000 yuan to those who create a famous national brand and 200,000 yuan for a famous provincial brand.
Guo Jianbo, head of Datang, describes the situation.
"Scientific innovation is the life of a company. It's also the life of the sock industry. In addition to establishing a public service platform, we also allocate special funds as a reward for scientific innovation and patents. This has helped improve the added value of socks and promoted the sock industry."
Danjiya Group was one of the first companies to invest in research and development. It set up a sock research institute and innovation center in 2003.
Zhu Tianyong is an executive in the company.
"Our company has been working with Donghua University and Zhejiang Engineering University. So far, three of our technologies have been classified as scientific achievements, and one as state and provincial scientific progress. We are using technologies in bamboo fiber, bean fiber, and antibacterial and odor-reducing products. They are all leading products in the world."
Huahai Spandex is one of two high-tech enterprises in Datang. Deputy general manager Du Chunshu says spandex is a highly efficient, high-quality chemical fiber produced through a complicated technique. His company has been studying the material for years.
"We have a research center where we do experiments and develop different products according to the demands of the market. We have our own experimental equipment."
Guo Jianbo says there are many other enterprises like Danjiya and Huahai which are attaching increasing importance to research and innovation.
"One industry must deal with research and development properly, or the added value of its products will not increase and the life of its products won't last long."
For the moment, Datang has established a complete innovation system for its sock industry. As innovation injects vigor to the industry, Datang is fulfilling its ambition to make a stir in the international market.