Shanghai Bell and Factory 520: The National Telecommunication Team from Qiujiang Road

Basic information

This section is also about an institution, and a big one. It had only twelve years on this factory ground, but those twelve years were the key leap of China's telecommunications industry from a "jumble of foreign makes" to a "national team".

First, this address: 1307 Qiujiang Road

This factory ground is more of a "veteran" than most of the stories in this book — its timeline stretches across nearly a century:

From a Republican-era telephone bureau, to a posts-and-telecommunications factory of the planned-economy years, to a joint venture, to a creative park — a twenty-mu factory ground has held four eras.

Factory 520: making our own telephone exchanges

For a long time after the founding of New China, the exchanges Shanghai people used to make phone calls were of every kind imaginable, a jumble known as the "ten-thousand-nations brand".

Shanghai's posts-and-telecommunications industry began with repair work: in 1951 several small repair-and-manufacture firms merged into the East China Posts and Telecommunications Equipment Factory, which then step by step developed manufacturing capacity. In 1962 three factories were merged to form a branch of the Shanghai Posts and Telecommunications Equipment Factory; in 1964 it was renamed the Shanghai No. 2 Posts and Telecommunications Equipment Factory, directly under the Ministry of Posts and Telecommunications; after specialised rebuilding, this factory became the Shanghai Telephone Equipment Factory of the Ministry of Posts and Telecommunications — that is, "Factory 520", its main product being the crossbar automatic telephone exchange.

(Incidentally: the Shanghai posts-and-telecommunications system had another one, "Factory 519" — the Shanghai Communication Equipment Factory, which made teleprinters and carrier machines and later went public — that was another line, not on this ground. "520" was the code number of the telephone equipment factory, the protagonist of this section.)

By the 1970s and 1980s Factory 520 was already one of the mainstays of China's telephone-equipment manufacturing. But at this point the world turned a corner — the program-controlled exchange appeared.

The negotiations: bringing S1240 in

A program-controlled exchange is, put plainly, "a telephone exchange run by a computer", a product two generations on from the crossbar.

How far behind was China's telecommunications industry at the start of reform and opening up? — making a call was hard, and getting a line meant standing in a long queue. The Ministry of Posts and Telecommunications set out a three-tier development strategy — "direct purchase abroad — joint-venture production at home — independent development and production at home" — and the most important move in it was to bring in program-controlled exchange technology.

Negotiations began in 1980. At the time the West restricted technology exports to socialist countries ("COCOM"), and many manufacturers would only sell equipment, not transfer production lines. The Belgian Bell company eventually agreed to a technology transfer.

• the joint-venture factory was first to be sited at Luoyang;
• later the Chinese side weighed transport, funding, industrial base and talent, and decided to move the site to Shanghai — which translated into one sentence: "set it up in the Shanghai Telephone Equipment Factory (Factory 520)."
• on 30 July 1983 the joint-venture contract was signed at the Great Hall of the People in Beijing, with Li Peng attending the signing ceremony;
• registration was completed in December 1983, and in 1984 Shanghai Bell was formally established — the first joint venture in China's telecommunications industry, numbered 008.

The old workshops of Factory 520 now had a new identity: the birthplace of Shanghai Bell.

1984: no. 008 hangs its plate in Zhabei

Shanghai Bell's early story is one word: "hard".

The equipment arrived, but the factory was in the city, and by regulation large container lorries could enter only after ten o'clock at night — so the transport, unloading, carrying and installation all took place in the middle of the night. The company was short of hands — most of its people were still training abroad, and only a few dozen stayed with the company, so the twenty-one new graduates who had just joined became the main force for installing the equipment. With no machinery they carried things on their shoulders; for overtime there was no overtime pay, and the midnight snack was nothing but shengjian buns.

On 1 October 1985 the first fully digital program-controlled exchange production line was completed and went into production.

The line between life and death: near shutdown, and "my baby"

Once production began, the real test arrived.

Imported components were too expensive, and the product had no price advantage; foreign equipment, meanwhile, was backed by government loans and high commissions — Shanghai Bell ran at a loss, and in 1987 came close to shutting down.

The turning point came from a hard campaign of "localization". In March 1988 Zhu Rongji set the tone at an on-site conference on localization at Shanghai Bell: only localization could bring down costs, and output had to be pushed to its highest and costs to their lowest. (People later learned that Zhu Rongji privately called this enterprise "my baby" — a reformer's fondness for the joint venture he had raised with his own hands, all of it in those two words.)

The localization approach was very practical: put the processing of components and parts into domestic supporting suppliers, and use the joint venture's "window" to connect them with overseas customers — three gains from one move. By 1996 more than 70% of Shanghai Bell's product was localized, drawing along nearly a hundred domestic supporting firms — and a Chinese telecommunications-manufacturing industrial chain grew up from here.

1992: did that equipment "belong to socialism or capitalism"?

On 10 February 1992 Deng Xiaoping inspected Shanghai Bell's plant making S12 dedicated large-scale integrated circuits.

Listening to the introduction to the imported equipment, he said the line that later spread widely:

"You tell me — does this equipment belong to socialism or to capitalism? So long as it serves socialism, it belongs to socialism."

That year Shanghai Bell's output reached 1.42 million lines — more than four times the original designed capacity. From "near shutdown" to "first in the world" took less than ten years.

From Qiujiang Road to Pudong

The Qiujiang Road workshops soon could not hold this enterprise's ambition.

In December 1992 the foundation stone of the new Pudong works was laid; in June 1995 the Pudong production line was completed; in March 1996 Shanghai Bell moved entirely to Jinqiao in Pudong — a site of 162,000 m², eight times the Qiujiang Road site.

Shanghai Bell set out from Zhabei and grew up in Pudong. Its annual sales climbed steadily after that: 7.85 million lines in 1998 and 10.79 million lines in 2000, first in the world. It later merged with Alcatel and then integrated with Nokia, to become today's "Shanghai Nokia Bell".

And 1307 Qiujiang Road stayed where it was, going on to its next stretch of life.

The fourth life of the factory ground

In September 2023 the century-old factory ground began its redevelopment.

In March 2025 it completed its completion filing, and in June phase one opened as the "Yongxinghui" creative park — positioned as "telecommunications genes × digital creativity", with a signed partnership with Shanghai University National University Science Park. The redevelopment kept buildings of different periods: the 1928 telephone-bureau building has had its Art Deco façade restored to its original form, and the 1970s–80s workshops keep their Bauhaus-style column grid — ten or so buildings that make a three-dimensional history of industrial architecture.

From the "Shanghai Telephone Bureau" to "Factory 520", from "Shanghai Bell" to "Yongxinghui" — over a hundred years, every generation on this ground has been doing the same thing: joining the city together. What they joined before was telephone lines; what they join now is creativity and code.

Telecommunications has never left Qiujiang Road.

Connections

• Sub-district：Zhijiang West Road Subdistrict
• See also：Zhijiang West Road Subdistrict, 8. Thirty Years of Catching Up

Sources: the establishment of Shanghai Bell, the signing of the joint-venture contract at the Great Hall of the People on 30 July 1983, Li Peng's attendance, the Chinese side's 60% share, the registered capital of US$22.8 million, the number 008, the introduction of S1240 technology and the "COCOM" background, the start of production on the line on 1 October 1985, the designed annual capacity of 300,000 lines, the near shutdown in 1987, Zhu Rongji's on-site localization conference in 1988, the localization rate of more than 70% in 1996, Deng Xiaoping's inspection on 10 February 1992 and the "socialism or capitalism" remark, the output of 1.42 million lines in 1992, the move of the whole operation to Pudong in 1996, and the output and sales figures for 1996–2000 follow the Shanghai Party History website's "Zhu Rongji Called This Joint Venture 'My Baby'", The Paper's "Seeking a Breakthrough: Three Steps Taken as One", Sohu's "Forty Years of Made-in-Shanghai" feature and public historical material of the telecommunications industry (cross-checked against several sources, Grade B); the "my baby" appellation, the localization conference of March 1988 and the demand for "the highest output and the lowest cost" follow the Shanghai Party History website (Grade B); the change of the joint venture's site from Luoyang to Shanghai and its siting in the Shanghai Telephone Equipment Factory (Factory 520), and the provision that "the transfer of the Factory 520 workshops was the Chinese side's responsibility", follow Sina Tech's "A History of the Telecommunications Industry in Thirty Years of Reform and Opening Up" (Grade B); details such as the equipment entering the city at night in the summer of 1985, the twenty-one graduates serving as the main force for its installation and the shengjian buns at midnight follow an interview with Yuan Xin in the telecommunications-industry media (Grade B); the lineage of Factory 520 (the merger of three factories to form a branch in 1962, the renaming as the Shanghai No. 2 Posts and Telecommunications Equipment Factory in 1964, and its later becoming the Shanghai Telephone Equipment Factory of the Ministry of Posts and Telecommunications) follows the industry gazetteer Shanghai Posts and Telecommunications Industry (Shanghai local-gazetteer system, Grade B); the chronology of the site's buildings (Building 12 as the 1928 Shanghai Telephone Bureau building and a Shanghai fifth-batch outstanding historical building, Buildings 1 and 3 as the 1952 printing works of the East China Posts and Telecommunications Equipment Factory, Building 6 as the 1951 instrument components workshop, Building 2 as the 1972 equipment manufacturing workshop, Building 5 as the 1984 warehouse, and Buildings 7, 8 and 10 of 1988) follows the park's public introduction (corroborated by several sources, Grade C); that 1307 Qiujiang Road belongs to Zhijiang West Road Subdistrict follows the creative park's public material and business-registration information (Grade B); the timeline of the Yongxinghui redevelopment (work begun in September 2023, completion filing in March 2025, phase one opened in June) and the "telecommunications genes × digital creativity" positioning follow the park's public investment material (Grade C). The full bibliography is in Appendix 4.