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Made in China 2025: Who Cares?

7/20/2017 11:12 AM EDT
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Saturation
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We said goodbye to China 10 years ago
Saturation   7/31/2017 9:43:19 AM
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China has emerged  in essence a 1st world nation, in about the same time Russia hasn't accomplished as much as China has as the 'world's factory'.

MIC 2025 is their future game plan.  A great summary by the way.  Now that the fields are roughly equal for production, should we go to China if they are similar to a first world nation?  Costs rose as far back as 2007 and we began moving elsewhere,  leaving subsidiaries to keep our toehold on the Chinese market, and have given up on IP they've already stolen.  If China can continue to lower their costs against the EU or the USA, despite shipping and the very subtle annoyances of doing business in China, maybe we'll invest more and be more careful with our IP, but that's an if.  The loss of IP and the creation of competing local Chinese companies with our IP and others and their IP laws that side with the Chinese happened to more than just us, think daily colonoscopies for us, as a price to do be in China.

Now that China has the factory to make whatever they want, they need to find out for themselves what to make, that is create their own IP.  That will be a challenge, since creativity thrives on freedom, unbounded thoughts need unbounded environments.  Think, Falun Gong.  As far as buying companies to get their IP, that can only go so far, as its not the company but the environment of its prior management and the country they are in that nurtures their thoughts.  

Rising standards of living, wealth inequality, and a drive towards automation will challenge China's labor problems, as they have no real methods of controlling unrest besides purges, torture and imprisionment.  

We are back in the southern USA, and Mexico and we see growth in both areas for the next 5+ years and while we have a toe hold in China, there are more attractive places to go to grow: Vietnam, Malaysia, Taiwan and even India,  China was yesterday's opportunity.

 

ubm112211
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Re: We'll see
ubm112211   7/24/2017 11:33:25 PM
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china would be a mixed bag , not 100% tw or thailand.

some front will well challenge the status quo. and let the rest of world feel the heat.

ie. Drones the chinese well dominate and beaten the rest of world.

TonyTib
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We'll see
TonyTib   7/21/2017 4:29:11 PM
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I've been hearing about "shifts from mass production to mass customization" for at least 25 years....and most companies still can't pull it off.  And there are many limitations as to what can be customized - for example, legal certifications (FCC, CE, automotive, FDA, etc) place limits.

Or think about women's hand bags -- how many women want a unique hand bag versus a recognizable (e.g. as a Louie Vouton) hand bag?

Also, development from cheap manufacturing to advanced design is by no means guarenteed: yes, Korea, Japan, Singapore, and Taiwan did it, but what about Thailand, Malaysia, Philippines, etc?  Google for the "middle income trap".

I think the biggest problem for Chinese companies is cultural, for example, read this article from China Law Blog about typical attitudes towards foreign high value equipment (and I'd say most of this would also apply towards high value Chinese equipment).  

My guess is that some Chinese companies will make the grade, but unless there's a massive cultural shift, most won't.  And I'm skeptical about the value of blind but expensive IIoT, Industry 4.0, AI, and such projects, just like spending money on robotics in 1980's didn't help GM beat Toyota.

junko.yoshida
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Re: A natural evolution
junko.yoshida   7/21/2017 11:13:20 AM
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Bert, thank you for your kind words. I was really encouraged to read your comment this morning.(Reporters alway crave for comments!)

Before we embarked on this project, our new big boss Victor Gao briefly mentioned "Made In China 2025" to us, several months ago. I was intrigued with the concept but didn't grasp what's really behind it -- I kept thinking what this had to do with anything for those of us in the rest of the world.

As we dug in, we realize this is really not just about "manufacturing." Made in China 2025 is in fact setting off a whole new global race in AI, robotics, IoT on factory floors. 

When I asked Chuck Grindstaff, executive chairman of Siemens PLM Software, a business unit of the Siemens Digital Factory Division, about this, he perfectly summed it up: This is about "a shift from mass production to mass customization."

It took more than a few months for us to put togehter this whole "global series" package on "Made In China 2025." As a reporter, I feel blessed that we are given the luxury of time -- to look into a certain subject matter, broader but also up close.

Stay tuned with the rest of the stories coming in under this topic over the next few weeks. We are also getting ready with other packages on a variety of "big topics." We plan to do this every month for the rest of the year! 

 

traneus
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1945 co-bot
traneus   7/20/2017 10:10:59 PM
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"Radiotron Designer's Handbook, Third Edition" by F. Langford Smith, 1945, shows as its frontispiece, "...the 'Sealex Machine', illustrated above. Only two manual operations are performed: the machine automatically seals the bulb on the stem, evacuates it, raises the electrodes to incandescence, getters the valves, and finally seals and lifts them on to a moving belt."

Bert22306
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A natural evolution
Bert22306   7/20/2017 9:16:20 PM
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I knew right away this was you, Junko, just reading the title.

I suppose it's to be expected, and it happened this way years ago in Japan too, that a center for low-cost manufacturing would sooner rather than later develop into not-so-low-cost, and simultaneously get into design. Good job in describing the angst this 2025 initiative is creating, and very interesting how manufacturing is regaining some of its former glory. Although this is a different sort. The rebirth is only thanks to factory automation.

The centrally-planned aspects of all of this might be its major weakness. It's just really hard for mere humans, I mean a tiny group of supposed "elites," to choreograph such complicated market transitions correctly. If natural market forces aren't allowed to take the lead role, it sounds just as tenuous as attempting manual control of our biological immune system. One step forward, five steps back.

Interesting the tension between western companies wanting access to the (potentially) gymongous Chinese market, and the real possibility of losing their shirt in the process. Then again, that would be part of "natural market forces." In the end, this often works to the advantage of the risk taker, even if it means their business model might change dramatically. 

Thanks for an impressive compilation of facts, and informed predictions and opinions.

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