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Projected trends for manufacturing in China by 2025

August 15, 2017
Posted by Duncan Grewcock

Driven by the “Made in China 2025” mandate, manufacturing in China is set to undergo a massive transformation in the coming years and these 9 tasks have been identified as key priorities:

  1. Improving manufacturing innovation
  2. Integrating technology and industry
  3. Strengthening the industrial base
  4. Fostering Chinese brands
  5. Enforcing green manufacturing
  6. Promoting breakthroughs in ten key sectors
  7. Advancing restructuring of the manufacturing sector
  8. Promoting service-oriented manufacturing and manufacturing-related service industries
  9. Internationalising manufacturing.

China manufacturing 2025 will be spurred by significant government investment and subsidies. According to Chinese Premier Li Keqiang, China will implement the “Made in China 2025” strategy in conjunction with an “Internet Plus” plan, based on innovation, Smart Technology, the mobile internet, cloud computing, Big Data and the Internet of Things.

Although China is a leading light in the manufacturing industry, the State Council wants to cement that position in the face of increased competition from “Smart” factories from other power-houses like Germany. The next seven to eight years will be marked by significant investment in building similar systems in China.

Therefore, below we have outlined The Top 4 trends to watch out for in this exciting era of manufacturing in China.

  1. Growth in Productivity

China is the world’s largest manufacturer where wages are rising and its productivity is forecasted to keep growing compared to other Southeast Asian countries as stated in a publication by the Wharton Business School. China manufacturing remains a leader and is expected to grow 6% to 7% every year until 2025. Additionally, The China Daily reported that… “Made in China 2025 is the first 10-year action plan designed to transform China from a manufacturing giant into a world manufacturing power”.

Ten key sectors that will see a growth in productivity are:

  1. New information technology
  2. Numerical control tools and robotics
  3. Aerospace equipment
  4. Ocean engineering equipment and high-tech ships
  5. Railway equipment
  6. Energy saving and new energy vehicles
  7. Power equipment
  8. New materials
  9. Biological medicine and medical devices
  10. Agricultural machinery.

China manufacturing will continue to lead on the global stage unless the country’s “Made in China 2025” mandate fails to gain traction. However, as Chinese businesses pay more attention to trends in manufacturing elsewhere, most will want to refine and improve their operations as a matter of course.

  1. “Made in China” becomes “Made by China” as quality improves

 Manufacturing in China is currently driven by Taiwan, or by Western businesses operating their own production lines on the mainland. With State Council intervention, the next big trends in manufacturing in China will be the creation of local-owned facilities.

At the same time , e expect to see a significant improvement in the quality of manufacturing and products by Chinese-owned companies. Mainland China will learn from the example set by Taiwanese firms, building technically advanced, refined production lines that increase the standard of products made in China.

Current manufacturing standards are uneven and inconsistent. “Made in China 2025” will help to create and apply standards across the Chinese manufacturing industry, further improving the quality of goods produced.

  1. China manufacturing enters the Industry 4.0 future

The heart of the “Industry 4.0” idea is intelligent manufacturing, i.e. applying the tools of information technology to production. As China enters into the 4th Industrial Revolution, “Made in China 2025” and “Internet Plus” have become the key economic triggers of China’s long-term economic strategy.

Economists believe that the combination of these initiatives will enable a new industrial revolution. Though wages are rising in China, its labour productivity is still far higher than other countries.  China manufacturing in 2025 will evolve to become much more like the production lines in place in other first world countries as their businesses join the new Industrial Revolution.

Following general trends in manufacturing, Chinese factories will become more data-driven, using artificial intelligence, IoT and machine learning to automate more of the production line. Terry Gou, head of high tech manufacturer Foxconn, believes that at least 30% of his production line operatives will be replaced by robots by 2025.

  1. Made in China 2025 may cause disputes

The “Made in China 2025” blueprint could become the source of disputes between government and businesses. Although the State Council wants manufacturers to adopt 3D printing and robotics, there may be resistance from the industry – at least in the early stages.

No manufacturer will be willing to invest in advanced technologies until a profitable business case can be established. As such, it will take time for the “Made in China 2025” program to gain traction – but once it does, the process will be unstoppable.

As reported in BBC future – by 2025, 100 billion connections – 90% from intelligent sensors in machines of all kinds – will link the globe as a direct result of information and communication technologies as stated by Huawei, a leading global provider of information and communications ICT solutions.

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Duncan Grewcock - Chief Operating Officer – Asia Pacific, Adjuno
Duncan has over 16 years’ of experience in management consulting, business process re-design and solution implementations.
Duncan is an expert in product sourcing, PLM and supply chain management solutions.
At Adjuno he leads the Asia-Pacific team and is responsible for all elements of the business and customer experience: business development, solution design and delivery, account management and P/L accountability.
He relishes working with clients in multiple geographies and the challenge of implementing best practice software solutions.
As a member of Adjuno’ s global leadership team, he contributes to the group’s business strategy and product road map. His vision, leadership and hands-on experience has enabled the successful implementation of software solutions across Adjuno Asia- Pacific’s key clients. He is also a member of British Chamber of Commerce and American Chamber of Commerce in Hong Kong.