Advanced tech gives domestic manufacturers global boost
China's manufacturing industry has significantly improved in the past five years, with enhanced global influence, greater input in research and development (R&D), and more advanced technological processes, companies and experts said on Thursday.
The rapid rise of China's manufacturing sector is reflected by the increasing number of Chinese companies that have grabbed substantial market share and brand awareness overseas, from home appliance makers to tire manufacturers, and it is largely the result of an industry upgrade from low-end to higher-end manufacturing.
"China used to be known as the world's factory mostly because of its reliance on low-cost labor, and the country's manufacturing sector was once stuck at a bottleneck because of rising costs. However, in the past few years, the entire industry has recovered strongly, as companies gradually adapted to cost changes," Feng Liguo, an expert at the Beijing-based China Enterprises Confederation, told the Global Times on Thursday.
Liu Buchen, a senior home appliance industry analyst, told the Global Times Thursday that in the last five years, domestic home appliance brands have overtaken overseas brands like Japan's Sony and Sharp to lead the domestic market, and this has also been seen in the mobile manufacturing sector.
"Made-in-China products are also capturing overseas market share, not because of their low prices, but because of their quality," he said, "for example, Casarte, a high-end home appliance brand under Haier, is very popular in Germany, which itself is famous for its manufacturing technologies."
In other manufacturing areas, products from CRRC Corp, China's rail transit equipment manufacturer, have been sold to 103 countries and regions around the world, including underground trains for Boston in the U.S., high-speed trains for Indonesia and light rail for Ethiopia, according to a statement CRRC sent to the Global Times on Thursday.
Tire manufacturer Doublestar Group's products are also exported to about 140 countries and regions currently, Li Yong, general manager of Doublestar, told the Global Times Thursday.
This overseas success reflects a vibrant and more advanced manufacturing industry back home.
China's manufacturing Purchasing Managers' Index (PMI), a key gauge of industrial activity, reached 52.4 in September, the highest level since May 2012, according to data released by the National Bureau of Statistics on September 30.
Focusing on R&D
Companies and experts said the rise of the Chinese manufacturing sector was partly due to a greater focus on R&D.
CRRC's statement said that it invested up to 11.51 billion yuan (.74 billion) in R&D in 2016. The company has also applied for nearly 20,000 patents since late 2012.
Haier has so far established a total of 10 R&D centers around the world and its patents cover 25 countries and regions, the company said in a statement it sent to the Global Times on Thursday.
"The home appliance industry spends about 5 billion yuan on R&D each year. This is a huge jump as there was almost no R&D spending in the industry 10 years ago," Liu said.
Wu Shuocheng, a Shanghai-based independent analyst, said that domestic car manufacturers currently also invest about 5 percent of their annual revenues into R&D on average, which is a "normal" level compared to international standards.
"Besides, the R&D has also transformed from unpacking and studying overseas cars to studying novel technologies," he noted.
According to Li from Doublestar, in the company's smart factory in Qingdao, East China's Shandong Province, more than 300 robots make tires under the direction of only a handful of people.
"The company has changed from 'sweat to smart,' which has increased production efficiency by nearly three times," he said.
Wu also noted that in the automobile manufacturing industry, automation is very normal, and many domestic car brands, like Qoros and Great Wall, have achieved automated manufacturing.
"Now about 10 percent of domestic home appliance manufacturing is intelligent. This is higher than the average level in Chinese manufacturing but still low compared with international standards," Liu said.
Feng said that China's manufacturing industry still faces some challenges.
"But our manufacturing sector has advantages in terms of talent and technology. With proper government stimulus, and without negative effects from financial or real estate bubbles, I believe the sector will have another leap in the next five years," Feng noted.