Biology of Business

Xiangyang

TL;DR

The fortress that held off Mongols for five years now hosts Dongfeng Motor's ¥45B automotive cluster — same chokepoint geography, different kind of siege.

City in Hubei

By Alex Denne

The Mongols besieged Xiangyang for five years. From 1267 to 1273, the most formidable military force on earth threw everything it had at a city whose double-layered fortress walls — designed so that invaders who breached the outer ring would be trapped and slaughtered in the killing ground between the walls — refused to fall. When Xiangyang finally surrendered, the Song dynasty's last defensive line collapsed and the Yuan conquest of southern China became inevitable. The city earned the title Iron Xiangyang, the First Fortress Under Heaven.

The fortress geography is the permanent fact. Xiangyang sits where the Han River divides, with the old city of Xiangcheng on the south bank and Fancheng on the north, surrounded by water on three sides and backed by mountains. This position made it the gateway between northern and southern China for two thousand years — whoever controlled Xiangyang controlled the passage. The Three Kingdoms hero Liu Biao made it his capital of Jingzhou Province. The Battle of Fancheng, where Guan Yu fought to hold the passage, remains one of the most dramatised military engagements in Chinese literature.

Modern Xiangyang has translated fortress geography into industrial geography. Dongfeng Motor Corporation, one of China's largest automakers, headquartered its Dongfeng Automobile Company here. The Dongfeng Cummins joint venture, established in 1995, produces heavy-duty diesel engines. One of Dongfeng's four national R&D centres employs over 14,000 people in the city. A 2025 joint venture with ¥8.47 billion in registered capital is expected to generate ¥45 billion in vehicle sales and ¥28.5 billion in auto parts sales by 2028, adding 10,500 jobs.

The mechanism is niche construction reinforced by path dependence. Dongfeng did not choose Xiangyang randomly — the company's origins trace to the Third Front movement, when Mao dispersed strategic industry into China's interior to protect it from coastal attack. The same geographic isolation that made Xiangyang defensible made it suitable for military-industrial production. The automotive cluster that grew from those origins now creates its own gravity: over 400 enterprises in the rail transit and automotive equipment supply chain orbit around the Dongfeng anchor.

The city's five rivers, all open to commercial transport year round, connect it to the Yangtze economic corridor. The population of 5.3 million across the municipality provides the labour pool. The defensive moat that once kept Mongol cavalry out now keeps competing automotive clusters from replicating the supplier density that decades of co-location have built. Iron Xiangyang's walls are gone. The industrial fortress they inspired is not.

Key Facts

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