Urgent need for self-branded products

But the question is: What's the advantage of robotizing a Chinese factory doing mainly original equipment manufacturing on contract to foreign buyers? The one great advantage these manufacturers enjoy is that they can build goods to the specifications of their customers cheaper than their competitors next door, or in some other emerging markets or development economies.

Putting more robots on the assembly lines is not going to help these factories win OEM orders when the orders are being directed to those equally cost-effective robotized factories nearer the major markets in developed countries. It is estimated that more than 50 percent of China's total exports consist of goods manufactured under contract to foreign buyers.

Economic planners have been calling for the speeding up of the restructuring of the Chinese industrial sector, focusing on the development of self-branded products for the domestic and overseas markets. Such calls appear to have acquired a new sense of urgency as the advancement in robotic technology is threatening to upset the global formula of the division of labor.

The more forward-thinking entrepreneurs in Wenzhou are known to have acquired long-established garment and shoe factories in Italy and some other European countries primarily for their brand names and design expertise. This apparently has proven to be an effective shortcut.

The real proof, no doubt, will eventually lie in the determination of the management of many larger manufacturing enterprises, including those owned by the State or related to local governments, to shake off their complacency or break out of their monopolistic cocoon to compete in the global marketplace with products of their own design and specification.

(China Daily 12/17/2012 page8)