China's manufacturing is in urgent need of transformation

At the International Forum on Chinese Manufacturing Management concluded in Tianjin on the 25th, a number of experts from the government and enterprises suggested that China's manufacturing industry urgently needs to transition to service-oriented manufacturing in order to increase industrial value and core competitiveness, and to transform China's economic development approach. The direction is suitable.

The importance of manufacturing to China's economic development is beyond any doubt. On the forum, Zhu Sendi, a special advisor to the China Federation of Machinery Industry, stated that after years of development, the manufacturing industry has become an important part of the national economy. Zhou Zixue, chief economist of China's Ministry of Industry and Information Technology, believes that the overall scale of China's industry has increased substantially, its overall strength has been continuously enhanced, and its contribution to the national economy has exceeded 45%. The overall strength of the manufacturing industry has become the largest in the world, providing strong support for ensuring China’s status as a big country.

The “2013 Global Manufacturing Competitiveness Report” recently released by Deloitte Consulting and the American Civil Institutions Competitiveness Committee also showed that in the competitions of 38 countries and regions, China’s mainland scored first place with 10 points outperformed Germany. The United States and other traditional strong countries.

The report believes that the reason why China's manufacturing industry has achieved such success depends not only on its low cost, but also on policy support in China and strong investment in scientific research. The report predicts that in the next five years, the mainland of China will continue to maintain its position as the world's leading manufacturing company.

However, affected by the global macroeconomic recession, China's manufacturing industry is also experiencing the "winter" test, and the entire industry is facing rising costs, declining demand and squeezed profits. Although HSBC Holdings released data on the 22nd, China's November HSBC manufacturing PMI rose to 50.4, the first time in 13 months to return to above the 50 level, there is a warming trend, but the arrival of a strong recovery remains to be seen .

Zhou Zixue believes that China's manufacturing industry has long relied on high input, high consumption, and unreasonable development, coupled with deep-seated contradictions of the lack of core technologies and unbalanced regional development. In the coming period, the manufacturing industry must fully implement the transformation and upgrading plan, promote independent innovation, and build on innovation-driven, intensive, efficient, and endogenous growth to improve overall sustainable development capabilities.

He pointed out that one of the directions of the tax reform in China is that the business tax of the service industry has gradually been changed to VAT. The value-added tax of modern service industry is a low tax rate. This is an industry that the country must strongly encourage and support development. The service-oriented transformation of the manufacturing industry will become a trend.

“In the future, the value and profit of industrial contribution will be mainly reflected in the service, and will be transformed into a modern service industry through good service and industrial design.” Zhou Zi said.

Since the beginning of this year, the topic of foreign manufacturing outflows in China has been constantly mentioned. In response to this, Zhu Sen believes: “Foreign investment in China is the most important market prospect. In the past, labor costs were low, and investment in China made it easier to make profits. However, as the proportion of new technology elements becomes higher and higher, the labor cost advantage will increase. It will become less obvious. Investment in the future manufacturing industry in China will still have a good profit prospects."

Of course, when the demographic dividend is no longer there, foreign-funded enterprises will pay more and more attention to the introduction of technology. This process will inevitably squeeze the living space of local companies, not only the market, but also attract more talents. Zhu Sendi said that from this perspective, it is equally urgent to speed up the transformation and upgrading of Chinese domestic manufacturing companies.

"The transformation and upgrading of China's manufacturing industry is currently in a critical period." Zhu and the number of participating experts pointed out that on the one hand, with the highlight of technical elements, the role of talent will also be more apparent. Related companies should increase their investment in technology and research and development to provide talents with a good R&D environment so that they are willing to contribute their intelligence to realizing their own value.

On the other hand, the transition from manufacturing to service manufacturing also requires Chinese companies to start with the initial industrial design and extend the added value to R&D, design, experiment, and management. Enhance the value of manufacturing products, extend the industrial chain, and improve the overall solution with reference to the experience of foreign companies.

In addition, Yin Jiaxu, party secretary of the China Weapons Industry Group, also suggested that the modern manufacturing industry should be accompanied by modern management, and there is room for improvement in the management capabilities of Chinese enterprises. The core of China's corporate management for a period of time is to promote industrial transformation and upgrading, which requires management to also have some innovations. The introduction of foreign advanced experience at the same time into their own corporate management, so that the advantages of enterprise management, highlights the latter.

The forum was held at the Tianjin Binhai International Convention Center and was jointly sponsored by Tianjin Binhai New Area People's Government and Aiborui Management Consulting Co., Ltd. The theme of the forum was "From Manufacturing to Creating - Lean Boosting Enterprise Transformation and Upgrade".