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Smarter Industry, Better Life
Intelligent technologies help China upgrade its traditional manufacturing industry while bringing convenience to people's lives
By Cui Xiaoqin & Wang Jun | NO. 1 JANUARY 5, 2017

A Huawei smartphone on display at the 2016 Mobile World Congress in Barcelona on February 22, 2016 (XINHUA)

Like the countless white-collar workers in China's many state-owned enterprises based in Beijing, Zhou Yun is busy from sunrise to sunset, with little time for housework and cooking. But thanks to technology developed in China, she now has the comfort of knowing that at the end of her long workday, a full bowl of hot steamy rice is waiting for her back home.

Just before leaving her office, Zhou is able to turn on her rice cooker at the touch of an application on her smartphone. By the time she arrives home, the delicious and fragrant rice is ready to be eaten, bringing much-needed convenience to her busy urban life.

"This smart rice cooker can be remotely controlled by your phone, so you can turn it on to cook rice or porridge anytime, anywhere," Zhou said. "By scanning the barcodes on the rice packages, it can also recognize rice varieties and automatically select the best cooking method."

"Made in China" used to be perceived as a byword for low-tech manufacturing. But the past few years have seen a variety of smart devices made by Chinese companies taking over both domestic and overseas markets. China, known as a global manufacturing powerhouse, is adding yet another skill to its repertoire: intelligent manufacturing.

Intelligent manufacturing

Zhou's smart rice cooker was produced by Xiaomi, a superstar among Chinese technology startups, which has released the smart cooking appliance together with an app to control it.

This innovative product is in line with the Ministry of Industry and Information Technology's Five-Year Plan (2016-20) for the light industry, released in August 2016, emphasizing innovation and creativity. The plan stated that intelligent manufacturing should be promoted in competitive industries such as food, household appliances and furniture.

An industry most benefiting from the government's strong impetus for "intelligentization" is the mobile terminal. According to data released at the Mobile Intelligent Terminal Summit held in Beijing in December 2015, from 2011 to 2015, Chinese mobile terminal enterprises submitted 87,000 patent applications, representing nearly half of the world's applications in this sector.

According to research firm Strategy Analytics, in 2015, Chinese mobile manufacturers Huawei, Xiaomi and Lenovo ranked third, fourth and fifth respectively in terms of global smartphone shipments, marking huge improvements in corporate competitiveness, brand influence as well as research and development. The Chinese market for smart wearable devices, a newly emerging market of intelligent mobile terminals, has grown to 12.6 billion yuan ($1.82 billion) in 2015, up 472 percent from the previous year.

"I've used several smart bracelets, such as Xiaomi and Huawei. They help me when I exercise by recording the number of steps I take and measuring my heart rate; this brings a lot of convenience to my training," electronic equipment specialist Su Hao said.

A contestant interacts with a robot after an industrial robot design competition for college students in Suzhou, east China’s Jiangsu Province, on December 23, 2016 (XINHUA)

Smart robotization

Since 2011, China has been encouraging research on intelligent manufacturing equipment, which has become a driving force for the upgrading of equipment-manufacturing enterprises. The development of intelligent robots, such as the ones used in the manufacturing sector, plays an important role in improving productivity in China's traditional manufacturing industry.

According to the China Robot Industry Alliance, 22,000 units of industrial robots of Chinese brands were sold in 2015, a significant growth from 9,600 units in 2013. While foreign brands still hold most of the market, domestic industrial robot brands have gradually grown to occupy 34 percent of China's total sales in 2015.

Wang Xiaoming, a researcher at the Development Research Center of the State Council, has no doubt that robotization represents the path to follow for the transformation and upgrading of China's manufacturing industry.

Wang said that in the future, the size of the robot industry in China could even compete with that of the automobile, home appliance and mobile phone industries. However, robotization might not come easy. Due to high costs and high standards of utilization, maintenance and security, it remains difficult for small and medium-sized enterprises to apply robot technology in production.

This explains why a major part of China's manufacturing industry is still mostly relying on traditional processes and equipment which are in need of upgrades. In many sectors, explained Wang, the challenge remains first automation and digitalization; intelligentization will come only at a later stage.

But with robot technology constantly progressing, it is expected to be applied in more industrial fields in the future.

"The era of artificial intelligence will not only promote progress in terms of technical aspects, but more importantly, it will bring about changes in consumer attitudes and lifestyles," said CityEasy CEO Li Zheng in an interview with the China Economic Times newspaper. One of the first companies to tap into the children's smart watch market, CityEasy has recently launched a smart robot dog, opening the door for use of intelligent robots in the field of children's education.

Going global

In recent years, encouraged by the Chinese Government's Belt and Road Initiative (Silk Road Economic Belt and 21st-Century Maritime Silk Road), many of China's intelligent manufacturers have expanded their activities abroad, helping promote local industrial development and employment.

Chinese telecommunications giant Huawei, for example, seeks to bring intelligent manufacturing capabilities to less developed regions.

During the 27th African Union Summit held in January 2016, Huawei officially joined Smart Africa, an Africa-led alliance of innovation to share knowledge and experience and provide affordable broadband access and other information and communication technologies on the continent. The initiative's ultimate goal is to improve socio-economic development in Africa by helping African countries digitize.

"Huawei will continue to support Smart Africa and work with all the stakeholders to promote interconnection and build an intelligent Africa," said Pang Jimin, Vice President of Huawei.

Lu Hongsong, Deputy Director of the All China Lawyers Association, said the manufacturing industry is a pillar industry of the national economy and the Belt and Road Initiative will bring new cooperation opportunities to manufacturing industries in all countries and regions along the route.

"Developing intelligent manufacturing equipment is necessary for China to realize the upgrading of manufacturing industry and evolve from being a large manufacturing country to a manufacturing power. In the next five to 10 years, China's manufacturing industry will grow at an average annual rate of 25 percent and experience an important strategic opportunity for development," Lu said at a Silk Road economic forum held in August 2016 in the Xinjiang Uygur Autonomous Region.

Lu said that Chinese-made standards can help Chinese manufacturing go global.

"Standards can help Chinese companies in the international market establish technology models, set up industrial alliances, gain policy support and cooperate with local companies for mutual benefit," he said.

Lu also warned of the risks that these companies may run into when attempting to expand their business abroad.

"For Chinese companies, risks exist in every field of international cooperation, so they must be prudent in their legal and financial affairs. They must, considering their own conditions as well as industrial and market changes, formulate feasible international strategies, improve their risk control measures and schemes, and prevent and address various risks," Lu said.

To address these problems, Lu said companies can adopt a number of measures.

First, they should thoroughly investigate the investment environment in host countries and have a good understanding of local laws and norms. Next, companies should fully research bilateral and multilateral investment cooperation agreements to protect their own interests, in addition to having control of the signing process when drafting investment contracts. Also, these enterprises ought to stay abreast of the latest possible risks in the investment sector, as well as select appropriate investment dispute settlement methods. Finally, they should establish flexible exit schemes.

Copyedited by Bryan Michael Galvan

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