On November 24th, during the “2017 Annual Conference of China’s Intellectual Industry,†Xin Renzhou, an inspector from the Industrial Policy Department of the Ministry of Industry and Information Technology, emphasized that intelligent manufacturing represents a sophisticated integration of advanced information technology with modern manufacturing techniques. This approach transforms the entire production process, including management and after-sales services, into a brand-new model of industrial production.
Zhang Wenkui, director of the SME Research Institute at the State Council’s Development Research Center, highlighted that the core of the new manufacturing industry lies in fundamental changes to production methods. He noted that the future of manufacturing will not simply be about the Internet, but rather a comprehensive transformation across design, production, sales, and consumption. This process requires active participation from both producers and consumers, leading to a reengineering of traditional workflows.
Zhang warned that these changes will significantly impact the manufacturing sector in the coming years, potentially reshaping the competitive landscape. He urged Chinese companies to deeply understand the emerging trends and characteristics of the new manufacturing industry to stay ahead in the evolving market.
A key concern raised by Zhang was the current trend of shifting focus away from manufacturing toward other sectors. While the growth of the service industry is natural, he stressed that the declining share of manufacturing in China’s GDP—dropping from 33% in 2010 to 30%—is alarming. Meanwhile, the financial sector's share has risen to 8.5%, raising concerns about the long-term health of the manufacturing base.
In contrast, developed countries like the U.S., Japan, and Germany are actively working to bring high-end manufacturing back home. For instance, the U.S. manufacturing PMI for October reached 58.9%, far exceeding China’s 51.6%. Similarly, the European manufacturing PMI stood at 57.2%, also higher than China’s figure.
Zhou Lingkun, a partner at Deloitte, pointed out that according to the 2016 Global Manufacturing Competitiveness Index, the U.S. is expected to surpass China within five years, with China following as the second most competitive manufacturing nation. In the long term, Japan may even overtake both the U.S. and China, while India could catch up rapidly.
Zhang Wenkui expressed deep concern over China’s low added value in its manufacturing sector. Although China leads in certain areas such as high-speed rail and nuclear power, the overall quality and innovation remain behind global leaders. As China’s industries evolve and traditional cost advantages fade, there is a risk of falling into passive manufacturing, which could harm the economy irreversibly.
However, there is hope. The 19th Party Congress highlighted the importance of building a strong manufacturing sector, promoting advanced manufacturing, and integrating technologies like the internet, big data, and AI with the real economy.
Xin Renzhou noted that while China has made significant progress in IT, hardware, and advanced manufacturing, there are still critical gaps in key technologies compared to global competitors. He pointed to the robotics sector, where essential components like speed reducers are still dominated by foreign firms. This dependency poses a risk, and technological innovation must become the primary driver of progress.
He advised companies to focus on practical solutions, align with national industrial restructuring, and avoid blindly following trends. Each company should tailor its smart manufacturing strategy to its specific needs.
Zhang Wenkui also criticized the current policy focus, arguing that it remains too industrial-centric and neglects the need for production method transformations. He emphasized that the new manufacturing industry brings unique features shaped by globalization and technological advancement, distinct from past initiatives like "Made in China 2025."
Using steel as an example, he explained that traditional large-scale automation is no longer suitable for niche markets requiring highly customized products, such as ballpoint pen components. These products demand personalized production methods, emphasizing interconnected and intelligent systems.
In conclusion, Zhang urged Chinese enterprises to proactively adapt to these changes, invest in technological upgrades, and embrace innovation. Only by doing so can China maintain its competitiveness in the global manufacturing arena and build a robust industrial system capable of sustaining economic growth.
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