In 2011, China overtook the United States to become the world's largest commodity producer by production, regaining the "world's first" throne lost in the 19th century. But China's manufacturing industry still needs to change its image in the eyes of the world. In the eyes of the world, China's manufacturing industry is only a low-cost factory that produces inferior cottage products. In the headquarters of Trina Solar (next to the company's large factory that can accommodate 14,000 workers), Gao Jifan expressed his consistent optimism about China's industrial creativity. He mentioned the new generation of "Honey" solar cells produced by Trina Solar as an example of China's local innovation. This product achieves a record level of energy efficiency. He said: "The company has made progress by increasing R&D investment. Of course, our pursuit of product quality and service has also contributed to this." Gao Jifan, who has a chemical background, created Trina Solar in 1997. . It is not difficult for people to understand Gao Jifan’s optimism. In the past 15 years, China has rapidly developed into one of the world's manufacturing powerhouses, and almost all large foreign companies have established operations in China. China's manufacturing industry is no longer limited to producing cheap basic components for export, but instead focuses on producing precision products and meeting fast-growing domestic demand. Another reason for the growing concern about the rise of China's manufacturing industry is that Chinese companies are beginning to acquire Western competitors. Recently, Chinese companies have even acquired several German companies, and Germany is the bastion of European manufacturing. Acquired companies include the construction equipment company Putzmeister and auto parts manufacturer Kiekert. Chinese government planners hope that more “industrial leading companies†like Trina Solar will emerge to achieve sustainable wealth creation. At present, the rising wage costs make China no longer able to rely on a large amount of cheap labor as an engine of economic growth. What may seem puzzling is that Trina Solar and other Chinese companies' efforts to develop new technologies to the upstream of the value chain are also in the interest of large Western and Japanese manufacturers. The latter two invested billions of dollars in setting up factories and R&D departments in China. The more China moves toward a “standard industrial country†– the manufacturing level is close to or comparable to that of Germany or the US – foreign manufacturers are more likely to make China a vital part of their global business. In the case of Voith, the German engineering group is a global leader in hydropower equipment and paper machinery. The group's CEO, Hermut Lienhard, is very representative. He said that the primary goal of the group's international business is to "integrate into China's manufacturing industry." Voith's business development also clearly shows the changes in the business focus of foreign companies after entering China. Ten to fifteen years ago, the vast majority of foreign companies established factories in China to produce export products. Now, Lin Hud and many other executives believe in the concept of "Chinese production, Chinese sales." His focus is on producing products for sale in China's local market with capacity in China. Voith's sales in the Chinese market reached 1 billion euros last year, half of which came from the company's factory in China, and the other half from the company's imports from abroad (mainly from Germany) to China. Lin Had said: "My plan is to increase the company's annual sales in China to 1.5 billion euros by 2015, and make two-thirds of them come from the company's factory in China." He also plans to be during this time. Voith's staff in China has doubled in size to 10,000. Some people think that exporting technology to China may cause Voith to lose some of its technological advantages relative to Chinese competitors. Linhad does not agree with this view. The bosses of other foreign companies are somewhat worried that their company will be harmed by IPR infringements that occur from time to time in China. A number of high-profile lawsuits recently filed by Western companies such as Apple, Hermès and Pfizer have involved intellectual property infringement. Cyrus Jilla, CEO of Luxembourg company Element Six, said Element Six is ​​cautious about launching new technology at its large plant in Suzhou, China. Element Six is ​​the world's largest producer of synthetic diamonds, and synthetic diamonds can be used for metal cutting. Gila said: "If we adjust the process of the factory in China, then within three or four months, we can see that the competitors have more or less imitated. (The synthetic diamond industry) China's business environment is like a The sieve is covered with holes.†Element Six’s cautious attitude toward craft problems has weakened the competitiveness of its factories in China relative to factories in other countries. “ Five years ago, our production cost in our Suzhou plant was half that of our factories in Europe and South Africa. Now, the former is about 85% of the latter.†Gila said that due to the production of top synthetic diamonds The chemical technology needed was originally very complicated, so Element Six's Chinese competitors are still far behind. He said: "The current level of technology of our Chinese competitors is lower than we expected four years ago. In fact, they are still stagnating in the low-end sector." However, some Western companies are convinced that China is rapidly advancing to the high-end manufacturing sector. . Claudio Facchin, president of ABB's China region, Switzerland-Swedish Electrical Engineering Group, said that the overall level of China's manufacturing capacity is measured by factors such as the quality of local suppliers and the difficulty of obtaining top-level design professional services. - Currently about 75% of Germany, and five years ago it was only 50% of Germany. “We are combining our engineering R&D skills with the manufacturing capabilities of Chinese factories and starting to develop new products in the Chinese market. This model was not possible a few years ago.†In the cost-effective discussion of production, China’s rising wage costs inevitably become a core topic. According to a study by the IFO Economics Institute in Germany, between 2008 and 2010, the average labor cost in China's engineering sector rose by 11.6%, while the average annual increase in Europe was 1.9%. The United States and Japan respectively. There has been an average annual decline of 8.5% and 3%. This rise in wages has led to speculation that some foreign manufacturers may withdraw more capacity from China and switch to a cheaper production base in Southeast Asia. However, China still has obvious advantages in terms of labor costs, especially in terms of infrastructure, technology and domestic consumer markets. At present, the labor force of Chinese factories is still 80% to 90% cheaper than many Western countries. As these factories gradually increase their technological content—especially in factories in industries such as electronics that China intends to support—the labor force's share of operating costs is declining, accounting for only 10% to 15% of total costs in many industries. Yoshitaka Morinaga, head of a Japanese manufacturer of Nichicon, a major Japanese capacitor manufacturer, said that at least for his industry, the impact of rising wages is minimal. The growing development of China's manufacturing capabilities is much more important in terms of significance, which is characterized by higher quality suppliers, fewer quality issues and better logistics networks. Sen Yongfang said: "At present, we have 50 to 60 suppliers in China. Since they are improved in terms of quality and reliability, the cost of producing capacitors in China is only 70% to 75% in Japan. %, compared with 80% to 85% five years ago." The above remarks can be regarded as a positive evaluation of China's efforts to develop manufacturing. Another encouraging sign is that some Chinese companies that have won international recognition for their technical level are accelerating their development. Well-known leading companies include: China's two major telecom equipment manufacturers Huawei and ZTE (ZTE); chemical group Sinopec and China National Bluestar; construction machinery manufacturer Sany Heavy Industry (Sany); National Aviation Corporation Aerospace Industry Corporation (Aviation Industry Corporation of China). As China's largest and the world's sixth-largest flat-panel TV display manufacturer, Beijing-based BOE Technology is also eager to rank among the above companies. Chen Yanshun, president of BOE, said that in the next five years, the company will double the number of R&D engineers to 6,000. The company now has 6,000 patents. Chen Yanshun pointed out: "Although some foreigners don't see it this way, many Chinese companies are really good at innovation." Even though the above aspects are more positive, the overall conclusions of many Western manufacturing executives are: China's distance is really The technologically innovative countries still have a way to go – especially in China, which lacks breakthrough products that can make a significant impact on the world or integrate different types of technologies such as surface materials, electronics design and software. The following examples can fully illustrate the gap between China and developed countries in the manufacturing level. Most of China's “national leading companiesâ€â€”such as Huawei and ZTE—are good at producing on the technology platforms that big Western companies have built for them, and most of the progress they have made is not groundbreaking. Chinese companies have yet to demonstrate their manufacturing capabilities in more complex industries, such as laser cutting machines, heavy-duty automotive hydraulic presses, nuclear pressure vessels, and most of the advanced medical equipment. Omar Ishrak, chief executive of Medtronic, a major US manufacturer of medical implants, also said that China's ability to achieve major technological leap is "currently limited." James Xia, president of the German medical engineering group Simens Medical Scanning Equipment Business in China, said that Chinese companies in their own industry have so far "not yet" made any technological advances that will make him shine. In general, over the past 20 years, China has been committed to improving its international position in the manufacturing field and has made amazing progress in the field of basic manufacturing. But in terms of major technological innovations, China is still in its infancy. In the case of a country that was in the early stages of industrial transformation, this situation is completely in line with expectations. Ye Shiqu, chairman of Anhui Tianda Petroleum Pipe Co., Ltd., acknowledges that China still has a long way to go in terms of technological innovation. He pointed out: "Over the years, most of the technology we used to achieve industrial progress has been exported from abroad. In my opinion, what we are doing is not enough to support us to draw our own technical ideas."
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