Five satellite navigation industrial clusters formed in China

Five satellite navigation industrial clusters formed in China

Five satellite navigation industrial clusters have been formed in China, although there is a bubble risk in some of the industrial parks, experts said on Monday.

The development of China’s satellite navigation sector, boosted by the progress of the homegrown BeiDou Satellite Navigation System (BDS), has led to the emergence of five vibrant industrial clusters, the 21st Century Business Herald reported on Monday.

The five clusters are, according to the Herald, the Beijing-Tianjin-Hebei region; the Pearl River Delta; the Yangtze River Delta; the Central China region encompassing Hunan, Hubei and Henan provinces; and a western China region including Sichuan and Shaanxi provinces and Chongqing Municipality.

Together, the five clusters, with a gross output value of 204 billion yuan ($31.89 billion), accounted for about 80 percent of the output value of the national satellite navigation industry in 2017, with each of the clusters registering an annual growth rate of 15 percent, the report said.

“The rise of these clusters is the result of movement of talent and market resource allocation,” Wang Bo, a satellite navigation system expert with the Beijing Institute of Technology, was quoted as saying in the report.

Gu Zhengxi, general manager of 4DSmart Co based in Jiaxing, East China’s Zhejiang Province, told the Global Times on Monday that the sector needs to focus on developing the overall industrial chain rather than geographical factors.

“What matters is how players can coordinate under a reasonable division of labor, how standards are formed, and how a win-win ecosystem is forged,” said Gu, whose company applies location-based services in the building of smart cities.

“Maybe for local governments aiming to attract companies and capital, or for some companies, the branding of an industrial cluster based in a certain location is a relevant tag, but we would like to focus on other tags such as chips, applications, data, platforms, industry-specific systems and comparative advantages over foreign competitors,” Gu said.

The Herald report said that Huizhou, which is situated in the Pearl River Delta, accounted for over 60 percent of domestic production of vehicle-based BDS navigation equipment.

But Gu said that should be attributed to the overall manufacturing capacity of the region, rather than the strength of the local satellite navigation industry.

Dong Dengxin, director of the Finance and Securities Institute at the Wuhan University of Science and Technology, said the satellite navigation industry could have a big influence on new economic forms such as artificial intelligence and drone technology.

“This industry can drive many other industries to grow. But what is important is to make homegrown BDS the key, and to let BDS drive the development of other homegrown technologies,” Dong told the Global Times on Monday.

Bubble concerns

The five clusters have as many as 34 BDS-themed industrial parks, although 16 of the parks are still under construction, according to the Herald.  

“The industrial parks are growing too fast, and despite many companies using BDS in their branding, they are not competitive and have no core capacity,” Gu said. “The support from local governments is good, but only the market can decide where resources should be allocated.”

According to an industry white paper, the overall output value of the satellite navigation and location-based services market in China reached 255 billion yuan in 2017, up 20.4 percent from the previous year.