The Chinese Road in the Post-Manufacturing Era

Deloitte's "2013 Global Manufacturing Competitiveness Index" report shows that among 38 countries/regions, China is still the most competitive country in the world's manufacturing industry at present and in the next five years. The world's three major manufacturing powerhouses in 2018 - the United States, Germany and Japan ranked third, second and tenth in the current ranking of the most competitive countries.

The most notable shift in global manufacturing over the past decade has been the relocation of manufacturing to East Asia, with China as the main destination and the fastest rise in global manufacturing share. However, the mainstream view is that Chinese manufacturing is just a simple assembly line in global manufacturing.

Yin Xingmin, an economics professor at Fudan University, disagreed. He believes that in the process of receiving a large number of manufacturing transfers, China has formed the basis for local demand for manufacturing. In addition, China's highly competitive market environment has accelerated the transfer of manufacturing technology and the technology development of local enterprises. The combination of the two China has formed a huge manufacturing capacity. The transfer is also accompanied by the process of technological deepening, and its concrete manifestation is the improvement of China's labor productivity level. Taking the U.S. labor productivity level as a benchmark, China was 3% of the U.S. 10 years ago, and now it is 12% to 15% of the U.S. Yin Xingmin said that the rapid reduction of the gap is a huge improvement.

Xie Zuchi, global senior partner of Booz & Company and chairman of Greater China, also said that in terms of volume, China's status as a global manufacturing leader will not change in the medium and long term. As far as the manufacturing value chain is concerned, it includes R&D, manufacturing, sales, logistics and services. China's current advantages are concentrated in the manufacturing link, which includes manufacturing processes, costs, and the supply of raw materials and components formed by the advantages of industrial clusters. sufficiency and other factors. This view is also confirmed in Deloitte's "2013 Global Manufacturing Competitiveness Index" report. Corporate executives participating in the survey have consistently believed that China's labor and raw material price advantages, the government's heavy investment in manufacturing and innovation, and sound Supplier network is its key strength.

Tse Chi further analyzed that the natural advantage of China's manufacturing industry lies in its huge domestic market demand, that is, the strong purchasing power brought by the rising middle class and large-scale national projects such as smart cities, smart grids, and high-speed rail. Although China's long-term labor advantage is constantly being diluted, considering both labor costs and labor productivity, China's hundreds of millions of skilled workers are irreplaceable in the global manufacturing landscape. In addition, the industrial cluster advantages accumulated by the development of China's manufacturing industry for decades have also prevented manufacturing companies from leaving China easily. This includes the continuous improvement of manufacturing processes, supporting production and processing capabilities, and a wide and diverse supply of raw materials and components. , and even infrastructure such as electricity, road systems, etc.

The industrial structure should be upgraded

The development of the world's manufacturing industry depends on the volume and value The chain also has its own trends. Tse Zuchi believes that in terms of volume, emerging countries such as Brazil, India, and ASEAN countries have grown rapidly, while established manufacturing powerhouses such as Japan have slowed down or even declined in manufacturing. In the future, more and more "Made in India", "Made in Brazil" and "Made in Vietnam" products will be placed on the shelves of supermarkets around the world, or written into the product description column of online stores. In the value chain, the industrial focus of the manufacturing industry is increasingly shifting to R&D and services (including logistics in a broad sense), and the profits of manufacturing and sales are gradually diluted.

According to this trend, the upgrading of China's manufacturing industry structure is inevitable, and its premise is the improvement of labor productivity and the improvement of personal income level. Yin Xingmin said that the increase in income level leads to the upgrading of the demand structure, which promotes the upgrading of the industrial structure, and the upgrading of industrial institutions further promotes the improvement of labor productivity, which brings higher personal income. This is an interactive process. He believes that China can now speed up the transformation and realize the upgrading of the economic structure in a relatively short period of time.

However, "there are interceptions in the front, and chasing troops in the back." If China wants to maintain its position as a global manufacturing leader, where will it go next?

In the global manufacturing competitiveness rankings, Germany has always been in the top three. From 2000 to 2011, manufacturing exports have nearly tripled, and now it has become the world's second largest manufacturing exporter after China. Thomas Willems, head of the Shanghai Information Office of the German Academic Exchange Center, said that the reasons for the success of the German manufacturing model are tradition, technology, quality and innovation, and the most important resources are education and training. Its parallel education system has cultivated a large number of professional and technical personnel. Provide human resources support for the sustainable development of the manufacturing industry.

However, Thomas Willems bluntly said that perhaps China does not need the German model at all, but will find an industrial road with Chinese characteristics. As far as the German model is concerned, it requires time, a specific socio-political structure, and the qualities of seriousness, responsibility, humility, and moderation toward oneself, others, and the environment, the latter of which is not new to China.

“China can learn from Germany, Japan and South Korea to do the right things, but in terms of road and model, it must follow its own path of industrial upgrading.” Xie Zuchi also holds a similar view, “China should continue to increase The investment in scientific research and talents will further strengthen the industrial cluster policy, improve labor productivity, and further improve the 'cost-effectiveness' of Chinese labor. The investment in scientific research should be further strengthened. Only in this way can we continue to seize the national manufacturing market, meet the domestic market demand, and be in an advantageous position in the future world manufacturing competition.”

In the 2013 Deloitte Competitiveness Index survey, corporate executives expressed their opinions on In the scoring of key driving factors of manufacturing competitiveness, a country's quality and supply of skilled labor, including researchers, scientists, engineers, etc., and its ability to ultimately drive innovation, ranked first among all driving factors. The report points out that countries that want to come out on top in the new era of manufacturing must be driven by productive human capital and technology, not just low-cost labor. Overall, the leading countries are making such a paradigm shift - prioritizing the development of intelligent and skilled people.

However, Yin Xingmin pointed out that China's biggest difficulty at present is the country's problems in resource allocation. "If the manufacturing structure is to be upgraded, the national resource allocation should be tilted towards the manufacturing industry, and the wage level in the manufacturing industry should be higher than the social average, not lower. When the former situation occurs, outstanding talents and graduates will flow to the manufacturing industry. , manufacturing employees will have high productivity, and will strengthen the position of the manufacturing industry.”

People are the main force of transformation

In a recent survey on China's manufacturing industry conducted by the World Managers website, 66.7% of the participants indicated that their companies will actively transform themselves in the next five years. Xie Zuqi believes that the direction of manufacturing transformation is "new demand, high added value and service", which requires enterprises to establish a series of their own core capabilities in research and development, manufacturing and after-sales service. From the perspective of enterprises, it is necessary to be closer to the market, understand the needs of consumers or customers to conduct research and development (including design), improve manufacturing processes, improve product quality and labor productivity, and ensure after-sales quality by investing in construction logistics, establishing and improving service standards. and other requirements.

Yin Xingmin pointed out that the revenue multiplication plan proposed by China last year is also forcing companies to enter technology Upgrade and increase productivity. He analyzed that the premise of doubling income is the doubling of labor productivity, which means that China's labor productivity will reach 25% of that of the United States by then. In fact, China still has huge room for development. At present, the production level of South Korea's labor force is 50% of that of the United States. Germany is 82% of the United States, and Japan is also about 80% of the United States. In the survey of the World Manager website, 45% of the participants also said that enterprises should invest funds to concentrate on R&D and technology, and adopt new technologies, new materials, new equipment and new processes for transformation and upgrading.

Zhu Yanming, founder of Xike Group, proposed that the manufacturing industry should go in the direction of science and technology, and integrate products, manufacturing and business models to innovate, and only then can China's manufacturing industry have opportunities. The specific approach is that, first of all, China has participated in the formulation of product standards and the implementation of standards in the past, and has established a set of knowledge and experience in the manufacturing industry. Chinese enterprises can completely standardize and export them and take the road of globalization. . Secondly, the next step for Chinese manufacturing companies is to use the accumulated wealth to purchase technologies and patents around the world, so as to transform products and increase the added value of products. The third is to recruit talents from around the world for global R&D.

The survey data of the World Managers website shows that technological innovation is the primary measure for enterprise transformation and upgrading. However, how to get rid of low-end manufacturing and how to shift to a more favorable position in the manufacturing value chain depends on how it increases technological input. "Chinese enterprises have reached the stage of innovation investment, which is the only way for China to become a manufacturing power." Yin Xingmin analyzed from a macro level that the current per capita GDP in China is US$5,000. To import a large number of foreign production lines. With China's annual GDP still growing by 7% to 8%, Yin Xingmin believes that the development of small and medium-sized enterprises should not be difficult. "Enterprises can deal with any storm by turning profits into capabilities. The key is whether the enterprise has the spirit of innovation. Go in the direction of specialization, thereby improving productivity." He said that China already has the ability to specialize in production, and the performance of this ability has only one indicator, that is, people. The technical experts formed in various enterprises will be the most important force in the transformation.