Furniture industry is another core industry in Shunde nowadays. It's output has reached to RMB 11 billion in 2001, and accounted to 30% of Guangdong's total output (Hong Kong Trade Development Council), which make the city become one of the country's largest bases for manufacturing furniture, related coatings and woodwork machinery, as well as one of China's largest markets for related raw materials and accessories.
Moreover, the city has more than 2700 enterprises manufacturing furniture, together with more than 800 enterprises manufacturing furniture coatings, more than 700 enterprises manufacturing oodwork machines and about 500 enterprises manufacturing ironware for furniture. The enterprises are mostly situated in Longjiang Town (China Daily, 13th January, 2003). Shunde Longjiang Town is known as "hometown of sofa" and the first town of furniture. And there are more than 1,200 furniture factories in it.
In addition Longjiang Town is the well-known transaction center of furniture material. For this reason, "Longjiang Model" is generated, which represent the Furniture Industry of Shunde. There are four characteristics of "Longjiang Model": 1. Mainly Labor-Intensive Industry with Collective Ownership Longjiang furniture enterprises have more than 1,200 factories, which account for one fifth of the whole province. There are also over 500 subsidiaries distributed in different areas with nearly 50,000 employees.
Furniture Industry is a labor-oriented industry with low capital and technology requirement. Therefore, with the relatively low starting capital, this industry has attracted many small scale collective enterprises. Mostly, their average employees are only about 19. 8 person. 2. Target in Domestic Market Similar to household electric appliance industry, furniture industry in Shunde still target to local market, which is restricted to their small scale and low R&D techniques.
However, there are some exceptions, in which some individual large enterprises are able to establish sales connections to Hong Kong, Taiwan and southeastern countries. In 1999, the amount of export has reached 12 million yuan. 3. Diversified and High-Quality Furniture Products Extensive production line is the main characteristic of Longjiang Furniture industry. From Production of Sofa to kitchen furniture collection, they can keep their quality at a high level. At the same time, some enterprises ntroduce ISO9000 quality management System to assure their qualities.
4. Rapid Growth of Secondary Industry Longjiang Town was a fish pond town before the open door policy. After 20 years of rapid development, it gradually becomes a manufacturing and commercial town in Shunde. In terms of real GDP composition, the primary sector's share decreased from 21. 3% in 1994 to 10. 3% in 1999. However, the secondary sector's share increased from 43. 7% in 1994 to 54. 3% in 1999. The third sector's share has reached to 45% in 1996, which has reached its climax and then returning to 35. % in 1999.
It is noteworthy that the average GDP growth was around 103. 4%1 Exploitation of Overseas Markets Being well known for its furniture industry, Shunde is not bounded by its local market and brand name, but also actively exploring the overseas markets. In order to attract more business and FDI, Shunde local government has held some Furniture Fairs and exhibitions such as the Dragon Excellent Furniture Exhibition, China (Lecong) International Furniture Fair. Recently, the 5th Dragon Excellent Furniture Fair has been held from 17th to 20th March, 2003.
The Fair was located in the "Furniture Town" in Shunde---- Longjiang Town, which attracted the furniture industry giant from France, Dutch, Singapore and Canada. The center has four floors, and each floor is 10,000 square meters, of which total exhibition area is 40,000 square meters and which there are 2,600 standard booth. Another trade exhibition, the China (Lecong) International Furniture Fair have been hold yearly for the third times. It is approved by China Foreign Trade Department, attracting 600 exhibitors from China and overseas and it received a great support by Shunde People's government.
This Fair held lots of activities other than Furniture Fair, such as China furniture forum, Furniture & Furnishings design contest and Order trading meeting. Those fairs and exhibitions give a valuable chance for local furniture enterprises to present their products more worldwidely. Lecong is a national furniture distribution centre. Its sales reached US$ 1 billion in 2001, with a cluster of 3000 furniture enterprises. Moreover, Hong Kong and overseas companies (mainly from South East Asia) have set up sales offices and retail outlets over there (Hong Kong Trade Development Council).