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Made-by-China

Sunday, March 20th, 2016
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At the China Insights Forum on Friday (from left to right) Prof Wang Zhile, Prof Xu Hongcai and Jeffrey Kang. All pics: Sonia Awale

 

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Prof Xu Hongcai, Director of Economic Research Department at China Centre for International Economic Exchanges

Sonia Awale in Shenzhen

As Nepal’s Prime Minister K P Oli embarked on a week-long official visit to China to attract trade and investment, China itself is changing from the world’s manufacturing hub to one that innovates.

Speakers at the China Insights Forum in Shenzhen said this weekend that China wants to specialise in services and technological creativity, and is transforming from Made-in-China to Made-by-China.

Economists and entrepreneurs alike called for better cooperation between the government and the market and emphasised the need to achieve China’s target to create more homegrown global and transnational companies.

“China is number one manufacturing industry, only behind Germany and the US,” said Xu Hongcai, director of the Economic Research Department at the China Centre for International Economic Exchanges. “But China is going to need structural reform to enhance our technological roles, and build public platforms.”

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Jeffrey Kang, CEO of IngDan in Shenzhen

Faced with a slowdown in growth and a currency crisis, Chinese experts said the country needed to adapt to new global challenges, be more socially responsible and not just be focused on maximising the economic benefits to shareholders.

Said Wang Zhile, professor at the Chinese Academy of International Trade and Economic Cooperation: “The Chinese are very reluctant and sometimes too closed to change, the issue is as much about culture as it is about technology and manufacturing.”

As part of China’s 13th Five Year Plan, Premier Li Keqiang last month announced a plan to “transform China into a smart and innovative world manufacturing power by 2025”.

China has also realised that the past decades of rapid growth have brought unsustainable development with pollution and negative consequences for the health of its citizens. China is committed to reducing carbon emission per unit of GDP by up to 45 percent by 2020.

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Alpha 1S intelligent robot (under production) at the Hong Kong IngDang Cyberport facility

Zhang Jing’an, former member of the leading party group said: “For a long time we talked about economic transformation, achieved it, reaped its benefits but it came with the high cost of environmental degradation.  The market has to be given freedom to be more innovative.”

Wang Zhile agreed that with 100 million highly-educated people in its workforce, China has unlimited potential but there needs to be greater support for more creativity in the manufacturing field. Speakers at the Forum stressed the importance of setting up new technological platforms that will bring together young entrepreneurs and creative ideas to meet the ever changing and transforming need of the Information Age.

With China’s focus on quantity over quality in the past and increasing global competition it doesn’t only face the challenge of production capacity overhaul, but also of manufacturing better automation and building a global value chain.

“In terms of automation China started low, it’s below 50 per cent and lower in most cases,” said Denis Depoux, Asia Deputy President of Roland Berger. A recent survey by Financial Times point out the high cost of making automation and lack of skilled manpower as some of the reasons for this.

One of the new innovation platforms that China hopes will take the country from the Industrial Revolution to the Information Revolution is IngDan, an Internet of Things (IoT) initiative that works to help new entrepreneurs with projects and connects them with right suppliers in China.

Jeffrey Kang, CEO of IngDan was present in Shenzhen to share his experience, and what he envisions to achieve with his company.

“As entrepreneurs and innovators we always make mistakes. In that past if you design a hardware and make mistake it would cost you millions,” said Kang “But through IngDan we aim to reduce the cost of making mistakes, provide rich resources to help the entrepreneurs on their projects.”

IngDan was established two years ago in Shenzhen by Kang and has its branches in Rome, Silicon Valley and Israel. It is a subsidiary of Cogobuy which is an e-commerce platform for corporate procurement of electronic components in China.

On 19 March IngDan opened its ‘experience centre’ in Cyberport, Hong Kong where several of its innovative products ranging from intelligent robot to vacuum cooker to smart health and medical kits were on display. Several of the showcased items were also specially designed for children.

One of the entrepreneur groups at the Cyberport is METAS (Maths, Engineering, Technology, Arts and Science) which will try to connect technological innovation with early education. It demonstrated its software-based electronic product with which children can assemble Legos, write letters and do maths followed by higher operations with simple software codes.

The developers of this product said that they’re essentially teaching children to do the simplest of coding and the idea is that more youngsters would go on to love it and pursue engineering and create innovative products themselves in future.

The Centre hopes to provide the space to innovate products and boost the transformation of China from a manufacturing-based economy to one that is knowledge-based.

Given this shift in China’s strategy for the future, it may make sense of Nepal’s PM Oli to seek Chinese investment in Information Technology and services rather than just in aid and investment in physical infrastructure. Nepal’s advantage is that it borders one of the world’s largest and most vibrant economies.

Wang summed it up: “You can establish experience centres in China and other countries and try to provide that platform to overseas companies, providing value for them and contribute to growth.”

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