Global giants back evolution plan

There's a factory in Chengdu, Sichuan province which, should you want to visit, has a one month waiting list. The attraction is a successful realization of China's ambitious industrial evolution plan, Made in China 2025.

Siemens Electronic Works Chengdu is the German manufacturer's first overseas model digital plant, which the company says features machines and products communicating with one another in real time and automated processes. The result, it says, is exceptional levels of productivity and quality.

Siemens decided last year to increase its total investment in the Chinese endeavor to over 1 billion yuan ($145.5 million; 136.7 million euros; ￡115.7 million) by 2019, a move that will be positive for the wider Chinese manufacturing chain.

China's goal is for "Made in China" products to be synonymous with innovation and quality by 2025, and it deserves the greatest respect for aiming to complete this transformation by 2049, says Joe Kaeser, president and CEO of Siemens, during the China Development Forum 2017.

China's government understands that multinational companies have the potential to play a vital role in the renewal of its economy, but multinationals also must understand that China needs reliable partners who think long term and do not sidestep the challenges ahead, Kaeser says.

Many foreign manufacturers rushed to open factories in China, to capitalize on the cost effectiveness of "Made in China". However, now they are exploring smart manufacturing as the nation transitions from the world's factory to the world's laboratory.

China will improve policies designed to turn China into a manufacturer of quality and adopt a variety of supportive measures related to technological upgrading, according to the Government Work Report for 2017.

The Made in China 2025 blueprint was introduced in May 2015, listing several tasks for high-tech manufacturing, including boosting innovation and fostering Chinese brands and service-oriented manufacturing.

In early March, a report from the European Union Chamber of Commerce claimed that China's support for high-tech manufacturing would lead to lesser treatment for foreign companies, while allowing government-subsidized homegrown players to compete unfairly.

"The strategy and its related policies are applicable to all businesses in China－domestic or foreign," Miao Wei, minister of industry and information technology, said at a news conference on the sidelines of the annual legislative session in early March.

To boost domestic manufacturing, the EU, the United States and Germany have all released similar plans in recent years, Miao said, hoping for more bilateral and multilateral exchanges and cooperation in the area.

The world's second-largest economy is transforming from "Made in China" to "Made by China". Numerous measures have been rolled out to digitalize and modernize, which will result in many opportunities, especially for European companies, according to Charles-Edouard Bouee, CEO of the international consulting firm Roland Berger.

Companies should focus on opportunities afforded by the dynamic Chinese market, instead of thinking about taking protectionist moves, Bouee wrote.

China's manufacturing sector is still in the medium stage of industrial modernization, with big differences in automation and digital capabilities among different sectors, regions and companies, leading to different market demands, according to a report released by the Development Research Center of the State Council and Bosch Group.

This calls for custom solutions, "where we can offer expertise", according to Werner Struth, board member of Bosch Group. "China is Bosch's largest market outside Europe, and cooperation is win-win in nature, because we can also get insights and ideas from our Chinese partners."

With China well on track to boost its global competitiveness through Made in China 2025, the widespread application of digital technology could further accelerate progress in energy efficiency and productivity, says Ulrich Spiesshofer, CEO of ABB.

(China Daily European Weekly 04/21/2017 page27)