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Made in China 2025 strategy aims to use cutting-edge technology to transform the manufacturing sector and make exquisite products

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A robot is put through its paces at the 14th Suzhou Electronics Manufacturer Exposition in Jiangsu province Photo: Wang Jiankang / For China Daily

It was on a frosty day in late February 1850 when Emperor Daoguang drew his final breath in Beijing. During his benefit firSt from reign, in the late stages of the Qing Dynasty (1644-1911), China was defeated at its front gates by the British navy and was forced to handover Hong Kong Island for colonisation.

His death also marked the end of China’s domination in global manufacturing. That year, Britain and other industrialised nations overtook the Middle Kingdom to become the world’s leading makers of goods, with the streets of Manchester, Paris and the Ruhr valley singing with the sounds of spinners and steam engines. China regained the title some 160 years later, at least in terms of scale, and as the country closes in on surpassing the United States as the world’s largest economy, the central government is aiming to recapture those long-lost glory days in manufacturing with the help of 21st century technologies.

We need to push China from being the world’s largest manufacturer to one of the strongest Made in China 2025 is the first phase of an ambitious, 30-year goal that could transform China from a factory known for cheap, low-quality goods into one that makes exquisite products envied by the world.

Although even the most optimistic industry insiders said the task would be extremely difficult, given the country’s current industrial level, the consensus is that it is a target worth striving for.

“The goal is crystal clear for us,” Miao Wei, the minister of industry and information technology, said. “We need to push China from being the world’s largest manufacturer to one of the strongest.”

The “low-end” label attached around the globe to most products made in China was no good for the country’s long- term development, he said.

The Made in China 2025 strategy would have a far-reaching influence on the nation’s manufacturing strategy over the next decade by shaping the technology development path and future strengths of Chinese companies.

According to the plan, drawn up by the Ministry of Industry and Information Technology and approved by the State Council, ten sectors, including machinery manufacturing, biotech, aviation, robotics and new-energy vehicles, would be the first to benefit. The plan also included setting up several innovation centres and IT facilities to boost manufacturing.

The investment in strategically important industries would help improve the level of China’s manufacturing and competitiveness in the global market, Mr Miao said.

China spent $210 billion (£135 billion) last year on importing integrated circuits, more than it spent on buying oil around the globe, according to ministry data. Microchips are critical components for electronic devices such computers, smartphones and televisions.

“With overseas powers controlling the export of high-end microchips to China, we realised the need to develop our own microchips so there is no longer a bottleneck for the IT industry,” Mr Miao said.

Last year, the country put 120 billion yuan (£12.6 billion) into an investment fund to support the development of microchips, leading to many applications for funding from domestic companies.

“The breakthroughs in key technologies will lead to a new round of manufacturing growth,” the minister said.

Compared with private-sector investment, the amount of government- led investment will be small and confined to key projects that the leadership thinks are strategically important. Meanwhile, officials have pledged to give the market absolute control over the industrial upgrading process.

Mr Miao said the government would do its best to support manufacturers in upgrading equipment and would provide suggestions, but the market should decide which segments enterprises invest in.

“We will make it clear up front that the manufacturing sector will remain market-orientated. The government will only provide policy guidance and other supportive work,” he said.

Zhu Sendi, a professor who advised China’s leadership on IT matters, said a well-defined boundary of government duties would boost the next wave of development.

China’s economic growth dropped to 7.4 per cent last year, the slowest since 1999. However, market analysts International Data Corp estimated that spending on IT by enterprises would grow this year by a healthy 10 per cent compared with 2014, partly thanks to continuous investments in efforts to lower costs and increase efficiency.

Robotic replacements

In recent decades, the rural residents who flocked to Chinese cities have provided low-cost labour, giving factories a competitive edge in the global market. Yet with labour costs rising, insiders said that to stay competitive companies would need to rely more on employees with innovative ideas and the ability to “think outside of the box”, both of which were lacking among many Chinese enterprises.

Boosting innovation is where Made in China 2025 comes in. Plus, according to analysts, having a better manufacturing industry could help a nation better defend itself against a global economic slowdown and other international turbulence.

“We have seen a surge in Chinese companies interested in investing in new technologies to reduce operation costs,” said Marco Cassinadri, managing director of technology and services for Greater China at management consultancy Accenture.

According to a report from his company, about 60 per cent of Chinese executives were considering a move to collect customer data using sensors, compared with the global average of 40 per cent. It indicates that Chinese companies were more willing to try out IT upgrades to improve service quality, the report said.

In economically vibrant regions of China, companies have already been trying to replace human workers with robots, to lower salary expenses.

In Guangdong province, China Southern Power Grid introduced drones fitted with cameras to check high-voltage transmission lines, allowing maintenance workers to monitor cables without climbing a single pole. “The adoption of drones will liberate the precious human resources from heavy daily checkouts, so maintenance workers can focus on solving problems instead of finding them,” Mr Cassinadri said.

Since last year, government subsidies have been given to Guangdong manufacturers that employ robots on production lines.

Statistics from the International Federation of Robotics showed that China’s demand for industrial robots has been growing at a speed of 25 per cent a year. Zhu Shiqiang, director of the Robotics Research Centre at Zhejiang University, estimated that the market value in China could soon reach 100 billion yuan.

The potential has led to a boom in Chinese robot manufacturers, including SpaceH, which was registered last year. However, the domestic market is

dominated by international brands such as ABB, Fanuc, Yaskawa and Kaku.

Mr Zhu said China must invest more in the research and development of products, improving technology and practicality, rather than focus solely on scientific research.

“The robotics industry is important for almost every developed country,” Qu Daokui, CEO of Siasun Robot and Automation, the largest enterprise of its kind in China, said. “It’s key to the future of our manufacturing industries... (and) is a good development opportunity for China. We should make good use of it.”

Industry 4.0

Made in China 2025 has been compared by some to Germany’s Industry 4.0 strategy. Yet, while there are similarities, Mr Miao said the differences are distinct.

“Germany has a stronger industrial foundation than China, and Industry 4.0 mainly focuses on adding the smart manufacturing elements to the already very advanced manufacturing process,” he said.

“For China, a large number of factories are yet to fully achieve industry 3.0, an information-orientated manufacturing process. From this perspective, the country will have more work to do than Germany, as the job is more complicated.” Policy adviser Zhu Sendi agreed, and argued that some Chinese companies are even stuck in industry 2.0, using Soviet-era manufacturing technology. “China is attempting to keep all industries above the lowest bar, at the same time as catching up with the cutting-edge technologies. This will not be an easy job for anyone,” he said.

It could take Germany about a decade to accomplish its Industry 4.0 mission, yet the overall level of Chinese manufacturing in 2025 was expected to still be lower than the top manufacturer in Europe.

The adoption of modern technology, such as the “Internet of Things” and artificial intelligence, would help China to spend less time in low-end manufacturing and to embrace high- margin manufacturing sooner, Mr Zhu said.

“I don’t think China can leapfrog the leading economies by using this 10-year strategy, but it’s possible to catch up with them,” he added. “Shifting manufacturing to the higher end is a long-term project for China.” (Source - The Telegraph)


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