Page 160 - 2018 White Paper on the Business Environment in China
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8 White Paper on the Business Environment in China
previous years. Cutting machine tools output made about States the number is 164. The global average is 62. In
$12.2 billion of that total, nearly identical to the previous China, that number is only 36 (Chan). Of course the
year. Forming tools pulled in $10.7 billion, an increase Chinese government wants to change this. The current
of 8.1 percent. Meanwhile, the total import of machine Five Year Plan allowed for billions of yuan for manufacturer
tools and accessories, mainly high-end from Japan and upgrades including advanced machinery and robotics
Germany, was about $7.5 billion, a decrease of 12.8 percent (Knight). However, in order to achieve Beijing’s target of
from 2015. At this point, fewer than 20 Chinese companies a robot density of 150 units by 2020, some 600,000 to
can provide medium and high-end computer numerical 650,000 new industrial robots will have to be installed
control (CNC) machine tools. (China-Machinery). throughout China. By comparison, around 254,000 units
were sold in the global market during 2015. Nevertheless,
One of Made in China 2025 goal is to upgrade the today China is already a leading sales market. At around
nation’s machinery industry so that it is better capable 68,600 units sold, the statistics for 2015 were 20 percent
of manufacturing major machine goods with their above the previous year’s figures, thereby exceeding the
own innovations and intellectual property rights. A top volume of sales for all European markets combined (50,100
priority is to adopt intensive manufacturing by making units). Total sales will increase by 30 percent in 2016 and
the best use of foreign capital, management expertise between 2016 and 2019 by 20 percent on average to more
and advanced technology. U.S. firms known for being than 400,000 units in 2019. This will be 40 percent of the
innovative and producing high quality products will be total sales in 2019 (World Robotics Report).
offered unprecedented opportunities to export their
high quality and durable industrial products to domestic Many regional authorities have been especially bold
manufacturers in various sectors as China tries to make in their own efforts including Guangdong which has
those goals. promised to spend 943 billion yuan to equip factories
with industrial robots and create two centers dedicated to
Onelatedevelopmentthatmayaffectthemanufacturing advancing automation. The provincial capital Guangzhou
sector was announced July 2017. According to Xinhua, aims to have 80 percent of manufacturing automated by
China’s major state-owned enterprises will complete 2020 (Chan). The idea is to create a virtuous cycle, helping
corporate governance reforms by the end of the year in birth a new high-tech industry and inspiring innovations
an attempt to overhaul inefficient state companies. An that could spill over from manufacturing into other sectors
action plan released by the State Council said the reform and products (Knight).
targets state-owned enterprises (SOE) supervised by the
central government. SOEs played a major role in China’s Apple and Samsung supplier Foxconn has already
recovery, but now many of them seem bloated and while reported that it has already replaced 60,000 factory
at the same time command significant resources such as workers with robots. A government official told the South
land and loans. For the past several years China has said China Morning Post that one factory has reduced employee
market forces should play a decisive role in the allocation strength from 110,000 to 50,000 by introducing robots to
of resources. Of course, corporate governance reform is the line. In a statement to the BBC, Foxconn Technology
one of the key tasks of the SOEs reform. SOEs that become Group confirmed that it was automating “many of the
enterprises with“diverse equity structures”will be required manufacturing tasks associated with our operations”
to go through specific procedures such as verification, but denied that it meant long-term job losses, “We are
appraisal and financial audits. The reform is scheduled applying robotic engineering and other innovative
to introduce private and foreign investment. Mixed- manufacturing technologies to replace repetitive tasks
ownership reform diversifying shareholder structures is previously done by employees, and through training, also
expected to take off in the second half of 2018. enable our employees to focus on higher value-added
elements in the manufacturing process such as research
Robotics and development, process control and quality control. We
will continue to harness automation and manpower in our
China already imports a large number of robots every manufacturing operations, and we expect to maintain our
year, but the country still lags far behind competitors in significant workforce in China” (Wakefield).
the ratio of robots to workers. There are 478 robots per
10,000 workers in South Korea. In Japan the number is Meanwhile, advanced machinery and robotics are
315, for Germany the number is 292, and in the United increasingly being used in the private business sector.
160
previous years. Cutting machine tools output made about States the number is 164. The global average is 62. In
$12.2 billion of that total, nearly identical to the previous China, that number is only 36 (Chan). Of course the
year. Forming tools pulled in $10.7 billion, an increase Chinese government wants to change this. The current
of 8.1 percent. Meanwhile, the total import of machine Five Year Plan allowed for billions of yuan for manufacturer
tools and accessories, mainly high-end from Japan and upgrades including advanced machinery and robotics
Germany, was about $7.5 billion, a decrease of 12.8 percent (Knight). However, in order to achieve Beijing’s target of
from 2015. At this point, fewer than 20 Chinese companies a robot density of 150 units by 2020, some 600,000 to
can provide medium and high-end computer numerical 650,000 new industrial robots will have to be installed
control (CNC) machine tools. (China-Machinery). throughout China. By comparison, around 254,000 units
were sold in the global market during 2015. Nevertheless,
One of Made in China 2025 goal is to upgrade the today China is already a leading sales market. At around
nation’s machinery industry so that it is better capable 68,600 units sold, the statistics for 2015 were 20 percent
of manufacturing major machine goods with their above the previous year’s figures, thereby exceeding the
own innovations and intellectual property rights. A top volume of sales for all European markets combined (50,100
priority is to adopt intensive manufacturing by making units). Total sales will increase by 30 percent in 2016 and
the best use of foreign capital, management expertise between 2016 and 2019 by 20 percent on average to more
and advanced technology. U.S. firms known for being than 400,000 units in 2019. This will be 40 percent of the
innovative and producing high quality products will be total sales in 2019 (World Robotics Report).
offered unprecedented opportunities to export their
high quality and durable industrial products to domestic Many regional authorities have been especially bold
manufacturers in various sectors as China tries to make in their own efforts including Guangdong which has
those goals. promised to spend 943 billion yuan to equip factories
with industrial robots and create two centers dedicated to
Onelatedevelopmentthatmayaffectthemanufacturing advancing automation. The provincial capital Guangzhou
sector was announced July 2017. According to Xinhua, aims to have 80 percent of manufacturing automated by
China’s major state-owned enterprises will complete 2020 (Chan). The idea is to create a virtuous cycle, helping
corporate governance reforms by the end of the year in birth a new high-tech industry and inspiring innovations
an attempt to overhaul inefficient state companies. An that could spill over from manufacturing into other sectors
action plan released by the State Council said the reform and products (Knight).
targets state-owned enterprises (SOE) supervised by the
central government. SOEs played a major role in China’s Apple and Samsung supplier Foxconn has already
recovery, but now many of them seem bloated and while reported that it has already replaced 60,000 factory
at the same time command significant resources such as workers with robots. A government official told the South
land and loans. For the past several years China has said China Morning Post that one factory has reduced employee
market forces should play a decisive role in the allocation strength from 110,000 to 50,000 by introducing robots to
of resources. Of course, corporate governance reform is the line. In a statement to the BBC, Foxconn Technology
one of the key tasks of the SOEs reform. SOEs that become Group confirmed that it was automating “many of the
enterprises with“diverse equity structures”will be required manufacturing tasks associated with our operations”
to go through specific procedures such as verification, but denied that it meant long-term job losses, “We are
appraisal and financial audits. The reform is scheduled applying robotic engineering and other innovative
to introduce private and foreign investment. Mixed- manufacturing technologies to replace repetitive tasks
ownership reform diversifying shareholder structures is previously done by employees, and through training, also
expected to take off in the second half of 2018. enable our employees to focus on higher value-added
elements in the manufacturing process such as research
Robotics and development, process control and quality control. We
will continue to harness automation and manpower in our
China already imports a large number of robots every manufacturing operations, and we expect to maintain our
year, but the country still lags far behind competitors in significant workforce in China” (Wakefield).
the ratio of robots to workers. There are 478 robots per
10,000 workers in South Korea. In Japan the number is Meanwhile, advanced machinery and robotics are
315, for Germany the number is 292, and in the United increasingly being used in the private business sector.
160
