Pressure on resources to force change
Greener growth and energy efficiency will be the key words for the future development of China's manufacturing sector in the face of growing pressure on resources and costs, a senior industrial official said on Tuesday.
"At the moment, 70 percent of Chinese cities couldn't meet the new standard for air quality, while water and soil pollution are becoming a more serious issue," said Su Bo, vice-minister of industry and information technology, during the 15th China International Industrial Fair in Shanghai.
Meanwhile, he said, some manufacturing sectors are losing their competitiveness to Southeast Asian countries because of a diminishing demographic dividend, with the country nearing an reflection point regarding population growth.
"In this context, green and low-carbon growth will be the direction of the future development for the country's high-end manufacturing sector," Su said.
According to data from the China Center for Information Industry Development, China contributes 20 percent of the world's total industrial output.
The country employs 100 million, or one-third of the world's total workforce in its manufacturing sector. The amount is 10 times larger than that of the United States.
But Hu Chunmin, a researcher with the China Center for Information Industry Development, said China's manufacturing sector is big but not strong.
One problem is in the utilization rate of capacity. The number is 78 percent in the US and 85 percent in Japan, but generally below 75 percent in China, meaning more than a quarter of the country's industrial capacity is idle, Hu said.
But at the same time, China's energy consumption as a share in global volume climbed from 6 percent in 1980 to 20 percent in 2010.
As such an unsustainable development model continues, Hu estimates that China's industrial output growth will see a slowdown in the next three to five years.
Worldwide, countries have been actively investing in renewable energy and new materials, such as shale gas exploration in the US, which has turned the country from an oil importer into an exporter.
But Su said the development of high-end manufacturing in China couldn't be carried out overnight and the country should focus on basic industrial research to improve its competence in material, core components and technologies.
"For example, aircraft engines couldn't be developed without years of research and experiments."
Su also said China would make efforts to widen its technology achievements in high-end manufacturing and encourage big corporations to go overseas for a bigger presence in the global value chain.
"China is in transition from a 'manufacturing factory' to a 'manufacturing force' by focusing on making valuable products instead of low-priced, mass-produced goods," said Marc Wucherer, president of Siemens China Industry Sector.
With regard to improving resource efficiency, Wucherer said that manufacturing enterprises should consider it at the equipment level first, such as energy-saving for high-efficiency motors and frequency converters.
"Enterprises should think longer-term, focusing on resource efficiency improvements for the entire industrial chain, from product design, production planning, production engineering and production to services," he said.
Siemens has brought to the Shanghai fair a solution integrating current technologies and innovations based on its "digital enterprise platform", where all processes in product development and manufacturing have been optimized in a virtual environment prior to production. Therefore time, labor, equipment and raw materials used will be significantly reduced.
Ulrich Spiesshofer, ABB's new chief executive officer, strongly advocates smart technology for intelligent upgrading for China's next level of urbanization and industrialization.
"Smart technologies are the best way to realize intelligent upgrading to the next-level intelligent infrastructure and industry, supporting China to maintain its competitiveness," said Spiesshofer.
As the "world's factory", China has gone through the initial stage of industrialization and faced the challenges of globalization, urbanization, environmental issues, a rising standard of living among the Chinese and new industrial development.
