Rebuilding a "New Foshan" still requires how many Midea? | Regional Innovation and Technology Insights

In 2025, the number of China’s trillion-yuan GDP cities grew to 29, with 28 maintaining an upward momentum, while Foshan’s nominal growth rate was -0.55%, making it the only city showing negative growth. As an important city whose foundation is built on manufacturing and that has been steadily growing by relying on the real economy, Foshan is currently facing phased growth challenges.

From the perspective of operating business, business scale, and corporate governance, listed companies are usually the “critical few” of the regional economy, offering a glimpse into the development logic and direction of the regional economy.

Since 2021, the Nanfang Weekend Kechuangli Research Center has been building a database of China enterprises’ Kechuangli. By sorting through nearly 30 indicators—including R&D inputs, R&D outputs, and enterprise operations—for operating entities/controlling shareholders in A-share, Hong Kong-listed, and U.S.-listed Chinese companies (also including a small number of private companies that have issued third-party audited annual reports), the center aims to track Chinese companies’ innovation and technology activities.

In the 2025 fiscal year, Foshan had 70 companies added to the database. Among them, 14 were in consumer electronics and electrical industries, and 8 were in specialized equipment manufacturing. In the non-metal mineral products industry, the rubber and plastic products industry, and the chemical raw materials and chemical products manufacturing industry, there were 6, 5, and 4 companies respectively. Traditional manufacturing advantages are Foshan’s “stabilizing weight.”

At the same time, it also reveals a structural weakness in Foshan’s industrial setup: the remaining 34 listed companies are spread across 23 different industries. Although it appears diversified, industrial resources are highly fragmented, lacking large platforms and big projects, making it difficult to form emerging industry clusters like those seen in Shenzhen and Suzhou. On the other hand, Foshan also shows obvious shortcomings in “soft strength” such as industrial software and artificial intelligence algorithms.

During the “15th Five-Year Plan to 2030” period, Foshan has anchored a development goal of “recreating a new Foshan.” Tang Yifeng, Deputy Governor of Guangdong Province and Secretary of the Foshan Municipal Party Committee, pointed out: “‘New Foshan’ is first new in terms of its industrial form—more modern. Without a modern industrial system to support it, it is impossible to build a modern new Foshan.” By this standard, achieving a transformation from “Foshan” to “new Foshan” is clearly a long-term and arduous systems engineering task.

Midea’s contribution makes up half of Foshan’s total,

To catch up with Shenzhen, Foshan needs 7 more “Mideas”

Foshan stands at a historic node of “recreating a new Foshan.” Yet when examining the reality of its innovation and technology foundation, it exposes a grim structural problem: nearly half of the city’s key innovation-and-technology indicators are tied to a single company—Midea Group.

With R&D spending of 16.23B yuan and 23.7k R&D personnel, Midea Group accounts for 54.69% and 47.98% respectively of the city’s total figures related to listed companies for R&D input and R&D personnel. Its revenue of 23.7k yuan and net profit of 407.15B yuan account for 48.45% and 65.25% respectively of the city’s totals. If Midea Group’s data are excluded, Foshan’s various averages would be cut in half.

Compared with neighboring Shenzhen, Foshan’s gap is comprehensive. This shows that it faces challenges in building a modern industrial innovation ecosystem.

Shenzhen not only has 580 companies added to the database—8.3 times that of Foshan—but also has 8 companies entering China Enterprise Kechuangli TOP100 (2025), with average R&D spending and average R&D personnel numbers far exceeding Foshan’s. More importantly, Shenzhen has formed a pyramid-shaped innovation ecosystem led by world-class giants such as Huawei, Tencent, and BYD, with a large number of “specialized, refined, and innovative” enterprises jointly constituting it.

Under Midea Group’s “top of the pyramid” position, Foshan still lacks a sufficiently strong “body”—that is, mid-tier enterprises with core competitiveness in strategic emerging industries. In 2025, Shenzhen’s advanced manufacturing accounted for 68.4% of above-scale industrial output, while Foshan’s figure was 55.7%—a gap of nearly 13 percentage points, which is a snapshot of the overall difference in the innovation ecosystem’s level.

The deeper gap also lies in the intensity of innovation investment: Shenzhen’s 2024 whole-society R&D expenditure intensity (R&D expenditure as a share of GDP) reached 6.67%, while Foshan’s was only 2.23%. High-intensity R&D spending is the “soil” for cultivating emerging industries, attracting high-end talent, and generating disruptive technologies. The thickness and thinness of Foshan’s innovation foundation versus Shenzhen’s are starkly different.

Whether Foshan can cultivate new innovation players—multiple entities at the same level—is the key to achieving a true transition to a modern industrial system and reaching the innovation-and-technology height that Shenzhen has. Foshan has 11 industrial clusters at the trillion-yuan scale, such as broad home furnishings and equipment manufacturing. Its output in areas like ceramics, home appliances, building materials, and food is globally leading. However, its innovation ecosystem still shows a “single-pole support” situation.

Based on Midea Group’s current level of contribution as a rough benchmark, if Foshan wants to match Shenzhen in innovation strength, it would need at least 7 more leading technology innovation enterprises of the same scale.

Where will the next “Midea” come from?

Focus on the “intelligent upgrades and digital transformation” of traditional industries

To answer the question of where the next “Midea” will come from—a proposition concerning Foshan’s future—we cannot only look at emerging tracks that are still just taking shape; we also need to examine the deep base of its traditional industrial landscape.

As the second-ranked innovation-and-technology company in Foshan—LianDong Technology—it is leading in the semiconductor test equipment field. But with revenue of 311 million yuan and R&D spending of 118 million yuan, its scale is far from sufficient to serve as a pillar for regional innovation. Emerging industries still need time to be cultivated; the intelligent upgrading of traditional industries and digital transformation are a more realistic and critical front line for nurturing the next “Midea.”

On the policy level, Foshan was already the first in Guangdong to roll out “intelligent upgrades and digital transformation” policies in 2021. In 2022, it also led nationally in advancing digital transformation paths for industrial clusters—exploring chain-based upgrades in manufacturing and transforming in groups to transition together.

On the enterprise side, traditional industry companies with revenue scales reaching into the hundreds of billions—such as Hisense Home Appliances, China Lesso, Xingfa Aluminium Industry, and Foshan Lighting—are demonstrating the potential to become a new growth engine through sustained, high-intensity R&D spending and “intelligent upgrades and digital transformation.” Specifically, Hisense Home Appliances, with R&D spending of 38.76B yuan and a year-on-year growth rate of 24.01% in R&D spending, shows the momentum of traditional home appliance giants transforming into technology companies. China Lesso, with R&D spending of 3.45B yuan, is exploring new materials and intelligent manufacturing.

In addition, the group of mid-sized enterprises with revenue scales between 1 billion and 10 billion yuan is showing strong dynamism in innovation and technology. This group stands out most in both R&D spending and talent expansion. Among the 22 companies whose R&D spending grew year-on-year, the average year-on-year R&D growth rate (18.17%) is higher than that of the centurymillion-yuan scale enterprises. Also, 15 companies saw growth in the number of R&D personnel year-on-year, with a much higher average growth rate of 25.67%. It can be said that they are investing in innovation through “increasing capital” and “adding people” at the same time.

From the structural perspective, these companies are highly concentrated in consumer electronics (6 companies), specialized equipment manufacturing (5 companies), and industries such as chemicals and rubber and plastics. This reflects that Foshan’s traditional advantageous industries—such as home appliances, ceramics, furniture, and aluminum profiles—are collectively moving toward higher-end, more intelligent, and greener directions.

Among them are cases like Foshan Lighting, which uses R&D spending of 591 million yuan to promote intelligent upgrades of products. There are also companies such as Bear Electric, Delmar, and Deguon New Materials. By leveraging year-on-year R&D spending growth rates exceeding 20%, they are seeking breakthroughs in their sub-sectors through R&D, and driving upgrades through innovation.

For Foshan, the next “Midea” may not necessarily emerge in a completely new industry. It is more likely to be transformed from existing enterprises that are deeply rooted in manufacturing and are realizing value-chain upgrades through “intelligent upgrades and digital transformation.” This will help more companies like Hisense and China Lesso move from “big” to “strong,” and from “strong” to “smart,” ultimately cultivating, on Foshan’s manufacturing foundation, an “innovation forest” composed of multiple technology-leading giants, truly building “new Foshan.”

Researcher at Nanfang Weekend: Luo Xianxian

Editors: Huang Pinghuang