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International News From the Field: China

This week, we revisit China and the country’s efforts and priorities in evolving their manufacturing industry, which has held the top spot globally since 2010. In the 11 years since then, the manufacturing value added increased from $2.632 trillion to ...
Oct 08, 2021

This week, we revisit China and the country’s efforts and priorities in evolving their manufacturing industry, which has held the top spot globally since 2010. In the 11 years since then, the manufacturing value added increased from $2.632 trillion to $4.124 trillion, and its global market share increased from 22% to nearly 30% today. For more industry intel and other tidbits, read on.

Currently, the Ministry of Industry and Information Technology of China has made proactive efforts to encourage, promote, and prioritize:

  • New energy automobile companies to merge and reorganize to become stronger and increase industrial concentration.

  • The digital transformation of the manufacturing industry and the in-depth application of digital technology across the entire manufacturing process and all associated fields.

  • The acceleration and deployment of 5G networks and the building of 5G-based application scenarios and industrial ecosystems. 

  • The cultivation and expansion of emerging industries, such as AI, big data, and blockchain, including cybersecurity to ensure the sustainable and healthy development of IT and communications industries.

Meanwhile, the energy consumption per unit of value added of industrial enterprises above designated size dropped significantly during the “Twelfth Five-Year Plan 2011-2015,” and the “Thirteenth Five-Year Plan 2016-2020” further dropped by 16%. The digital transformation of the manufacturing industry has accelerated in an all-round way, significantly contributing to the reduction of energy consumption. The leading role of key areas such as Beijing-Tianjin-Hebei, Yangtze River Delta, and the Guangdong-Hong Kong-Macao Greater Bay Area has been further enhanced, and many advanced manufacturing clusters have formed in the fields of electronic information, rail transit, construction machinery, and automobiles. The “Fourteenth Five-Year Plan” will last from 2021 to 2025, and targets, among other things, the development of an innovation ecosystem for the integrated circuits industry, with IC design, manufacturing, and equipment as areas of focus. It also calls for the further development of the advanced manufacturing industry clusters to promote innovation and foster the development of a range of technology industries. 

One of the key measures to implement the “dual carbon” strategy in China, the goals of which are to reach the country’s carbon emissions peak by 2030 and carbon emissions neutrality by 2060, is the new energy infrastructure industrial chain, which includes BIPV (building-integrated photovoltaic), wind energy, and super high-voltage energy storage. These strategies will bring plenty of opportunities in different application segments for manufacturing industries. However, it still takes time for new energy to replace traditional thermoelectricity power generation, and the electric power supply is extremely important to the manufacturing industries carrying out the dual carbon strategy.  

In mid-September of 2021, the Chinese governmental agency National Development and Reform Commission issued the Notice to Improve the Dual Control Scheme of Energy Consumption Intensity and Total Amount to control more firmly energy-hungry, high-emissions projects. Many provinces also introduced their own action plans immediately to strengthen the control of high-energy-consuming industries and to take measures to restrict electricity and production for some industries and sectors. The main reasons for these actions is the demand of energy consumption of the first eight months of 2021, which increased 13.8% compared to all of 2020. In past years, YOY energy consumption demand averaged between 5%-6% growth; on the other hand, the unit price of coal for power generation is incredibly high now: 300% YOY. Considering the recent electric power shortage and supply interruption – which is estimated to last for several months – purchasing plans should expect to be impacted, especially price and delivery time for many overseas buyers, including those in the United States. 

AMTech & AMC 2021 (China International Advanced Manufacturing Technology Show and World Advanced Manufacturing Conference) will take place Oct. 11-14 in Shenzhen, Guangdong Province. It is the first industrial trade show organized by the CCPIT Machinery Sub-Council and the Guangdong-Hong Kong-Macau Advanced Manufacturing Alliance (GHM-AMA), which is composed of 21 machinery and manufacturing associations in the Greater Bay Area, with thousands of member resources encompassing complete machinery production chains. AMT participates in this event at booth #7C55, where we will present transformative technologies and the MTConnect standard. If you’re in the region, come by and see a demo of a virtual system, where six AMT member companies’ CNC equipment (Hardinge, Hurco, Kennametal, Omax, Omega, and Sunnen) are linked and integrated by private software and CNC technology company ISESOL from Shanghai.

For more information, please contact Fred Qian at fredqian@AMTchina.org

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Author
Fred Qian
General Manager - Shanghai Technology and Service Center of AMT
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