Digitization has Become a New Fulcrum for the Second Rise of China’s Manufacturing Industry

At 10am on July 19, the State Council Information Office rectangular press conference, Ministry of Industry and Information Technology spokesman Zhao Zhiguo introduced the development of industry and information technology in the first half of 2023 at the press conference, and accepted reporters. Throughout the news released at the conference, and accepted reporters. Throughout the news released at the conference, the development of industry and information technology in the first half of the year presents two characteristics: on the one hand, China’s manufacturing industry has entered a new round of development through high-quality development, and the global competitiveness of Chinese manufacturing has been future enhanced; On the other hand, digitalization has become a new fulcrum to drive the high-quality development of China’s manufacturing industry, and the digital transformation of China’s manufacturing industry has initially achieved results.

In the first half of the year, China’s manufacturing industry enjoyed a good momentum of development, with both scale and quality improving simultaneously. From the scale point of view, the industrial added value of enterprises in the first half of the year increased by 3.8%, and the efficiency increased by 0.4 and 0.8 percentage points compared with the first half of last year and the first quarter of this year. In terms of quality, the industrial structure of China’s manufacturing industry has been continuously optimized, and advanced manufacturing and high-end manufacturing have witnessed rapid growth. In the first half of the year, the output of new energy vehicles, solar cells, industrial control computers and systems increased by 42.4%, 54.5% and 34.1%, respectively, of which the cumulative output of new energy vehicles exceeded 22 million in the first half of the year, ranking first in the world. China will accelerate the development of emerging industries such as 5G, smart connected vehicles, new energy, new materials, biomedicine and high-end medical equipment, and strengthen the growth momentum of high-speed rail, electric power equipment, new energy vehicles, photovoltaic and communications equipment. China’s manufacturing is shifting from quantitative scale to qualitative intensification. From a historical point of view, scale dominated the first round of the rise of Chinese manufacturing, and high-quality, intensive will become the main engine of the second round of the rise of Chinese manufacturing.

How did made in China achieve high-quality development? It can be summarized as follows:

First, market demand-oriented industrial policies lead the development of manufacturing. In 2023, the Ministry of Industry and Information Technology mentioned “efforts to expand expand effective demand and organize new energy vehicles, smart home appliances, and green building materials to be countryside”. The prosperity of manufacturing industry cannot be separated from industrial policy, and China’s industrial policy is innovation-oriented, and the early development of a large number of emerging industries depends on industrial policy to create new demand.

Second, optimize the business environment to encourage enterprises to innovate and create. Create a fair market competition environment and attract enterprises to innovate and create with an advantageous business environment. The integration of production, university and research is used to drive technological innovation and application, and the market environment and technological innovation environment are used to encourage enterprises to innovate and develop, so as to realize the transformation of Chinese manufacturing from the low-end of the industrial chain to the high-end, from the low-end of the value chain to the top, and achieve high-quality development.

Third, promote the high-quality development of China’s manufacturing industry through digital transformation. China has adopted the following four points to drive the high-quality development of China’s manufacturing industry with digitalization.

1. Improve the construction of digital infrastructure and provide hardware conditions for the digital transformation of manufacturing industry through digital infrastructure.

In terms of hardware, China has accelerated the construction of communication computing power networks. In the first half of this year, China has built and opened 2.937 million 5G base stations, 676 million 5G mobile phone users, more than 2.12 billion mobile Internet of Things terminal users, and 5G has achieved full coverage of cities at or above the county level. In terms of computing power, the revenue of computing power related industries such as Internet data centers, big data, cloud computing, and the Internet of Things increased by 19.2% in the first half of the year. Through measures such as computing infrastructure construction, computing technology breakthrough, and computing structure optimization, the quality of China’s computing power has been continuously improved, and the supporting force for the digital transformation of the manufacturing industry has become increasingly strong.

2. Adopt models such as demonstration, pilot and standardized digital transformation schemes to commission feasible schemes for enterprises’digital transformation.

At the press conference, the Ministry of Industry and Information Technology mentioned: up to now, nearly 8,000 digital workshops and smart factories have been built around the country, of which more than 2,500 have reached the level of intelligent manufacturing capability maturity above 2, and basically completed the digital transformation; 209 have explored intelligent upgrades and become intelligent manufacturing demonstration factories with international advanced level. After the transformation, the product development cycle of these demonstration factories was shortened by 20.7% on average, the production efficiency was increased by 34.8% on average, the rate of defective products was decreased by 27.4% on average, and the carbon emission were reduced by 21.2% on average. Through the example of manufacturing transformation, Chinese entrepreneurs see the benefits of digital transformation, thus stimulation the enthusiasm of entrepreneurs. The Ministry of Industry and Information Technology said it will continue to promote no less than 3,000 enterprises to build 5G factories during the year.

3. Promote the development of the digital industry itself

China has four steps to achieve the development of the digital industry: one is to consolidate the network foundation, the second is to accelerate core technology innovation, the third id to deepen integrated application, and the fourth is to strengthen cyber security. The development of digital industry is an important foundation for the digital transformation of manufacturing industry, and digital core enterprises provide various supporting facilities for the digital transformation of manufacturing enterprises.

4. Deepen openness and cooperation in the digital field.

China will further open up the manufacturing and information and communication industries to a high level, continue to foster a market-oriented international business environment governed by law, actively leverage the role of multilateral and bilateral cooperation mechanisms between governments, strengthen foreign policy coordination, strive to maintain the security, stability and unfettered industrial chain, participate in global digital governance through relevant international organizations and multilateral platforms, and promote cooperation in the digital economy.

China will improve digital infrastructure, increase enthusiasm for digital transformation through demonstration and pilot projects, drive the development of digital industries, and deepen openness and cooperation in the digital field. With these four points of blessing, China’s manufacturing industry can successfully achieve digital transformation, so as to achieve high-quality development. In the second half of the year, China’s manufacturing industry will continue to continue this development trend, relying on digital transformation to achieve high-quality development, and through high-quality development to create a new legend of Chinese manufacturing, in the “new story”, Chinese manufacturing is no longer to win the quantity, brand, technology, efficiency will become the new magic weapon of Chinese manufacturing.