Jiaozhou, a county-level city in East China's Shandong province, leads the world in hat production.

With more than 600 hat manufacturers and one of the world's most complete and competitive hat-making industrial ecosystems, the city produces 1.2 billion mid- and high-end sports and casual caps a year, enjoying a strong presence in more than 100 markets around the world.

Globally, one out of every three sports caps is made in Jiaozhou. From European and American streets to Latin American fairs, and even during NBA championship celebrations, caps from Jiaozhou are worn everywhere.

The city's hat-making story began in the mid-1980s in Xiaoyao village, Ligezhuang town.

In 1985, a Hong Kong businessman partnered with a local company to establish Shandong's first public–private joint venture hat factory.

Benefiting from advanced technology and strong overseas channels, the enterprise grew rapidly, producing over a million dozen hats annually.

Other investors soon followed. In 1996, another Hong Kong businessman set up a privately-owned hat factory in Xiaoyao village, which at its peak employed over 5,000 workers.

As leading enterprises expanded, upstream and downstream suppliers, covering every link from fabric, embroidery, and thread to packaging and logistics, sprang up across nearby villages, eventually forming a complete local industrial chain.

By 2009, Ligezhuang had earned the title "the hometown of Chinese hat-making," granted by China National Light Industry Council and China National Minority Necessities Association.

In the same year, an industry standard for six-panel sports caps, formulated by six local manufacturers in Ligezhuang, was approved as a guideline for the hat industry.

The explosive growth of the town's hat industry led to surging orders, which eventually contributed to close collaboration between hat manufacturing factories and small, distributed home workshops.

Many local residents supplement their income by taking orders from nearby factories and completing specific steps, such as stitching brims, at home.

68-year-old Zhang Mingzhen and his wife, for example, operate three sewing machines in their living room, taking overflow orders from multiple factories.

"During peak season, we work for four to five hat factories and can earn over 20,000 yuan ($2,828.81) a month," Zhang said.

This collaborative model has fueled local prosperity. Ligezhuang now posts an annual output value of 13 billion yuan and a per-capita disposable income of 62,000 yuan, consistently ranking among China's top 500 town economies.

A wave of digital and intelligent transformation has given Jiaozhou's hat industry a strong boost, leading more and more companies to a development path featuring technology-empowered production.

At Qingdao Qianfeng Capart Int'l Corp, a leading local hat manufacturer founded in 1996, sewing robots now perform many of the tasks once handled by a large workforce.

In the production workshop of the company, the main processes such as cutting and sewing are completed by machines, with workers playing a supportive role, according to Wang Aimei, general manager of the company.

"Through seven years of research and development, we have built the world's first automated hat-sewing production line featuring robotic workers," Wang said, noting that the company's production line has made the leap from one worker operating one machine to one worker operating six machines.

Automation has cut labor costs by half and raised production efficiency by 100 percent, while the overall production cycle has been reduced by 28 percent.

Today, the company produces 20 million hats annually, enjoys an annual output value of more than 400 million yuan, and exports hats of over 1,000 series to more than 50 countries.

Across Jiaozhou, over 800 manufacturing firms have undergone digital and intelligent upgrades.

So far, the city has fostered 129 pilot enterprises for the digital transformation of small and medium-sized enterprises (SMEs), 66 provincial-level digital technology-driven factories, two national-level 5G-powered smart factories, and two provincial-level smart industry platforms.

Notably, smart platforms and shared smart factories have also reshaped cooperation within the city's hat industry.

In 2022, Qingdao Qianfeng Capart Int'l Corp. and several partners launched China's first industrial internet platform for the hat industry, enabling equipment sharing, data connectivity and collaborative production across the entire supply chain.

A shared smart factory in Ligezhuang town, the country's first shared smart production workshop for an industrial cluster, enables hat companies to place production orders via a mobile app and in other ways.

After receiving orders, the factory, where more than 100 machines work in a space of over 1,000 square meters, handles specific steps such as brim or strap manufacturing on demand on intelligent production lines.

For many small firms, this eliminates the need to invest in expensive equipment.

"Without the financial pressure of upgrading equipment, we are able to move forward with a light pack, and production efficiency actually improved," said Ye Fangzhen, general manager of a hat company that has benefited from the shared smart factory.

The company sells over 2 million hats annually, producing nearly 200,000 hats per month on average, according to Ye, who noted that the shared factory has helped save labor costs and increased production efficiency by nearly one-third.

Thanks to these game-changing models and transformations, Ligezhuang has evolved from a cluster led by a few major firms into a dynamic main hub of mid- and high-end sports caps in the world.

The local hat industry of Jiaozhou is expected to embrace further upgrading, as the local authorities are planning to intensify efforts to improve the top-level design of the supply chain and industrial chain of its fashion industry, according to Ma Jiabo, secretary of the Communist Party of China Ligezhuang town committee.

The town will continue to focus efforts on the transformation and upgrading of its hat manufacturing, wigs, and jewelry industries, Ma said.

Efforts will be made to speed up the industrial upgrading of hat manufacturing by promoting a "shared manufacturing 4.0 model" that is characterized by shared manufacturing capabilities, service capabilities, innovation capabilities, and ecological collaboration, Ma noted.