With the decline of cost advantage, how can the traditional manufacturing power shift from "big" to "strong" through competitiveness? Ceramic wear resistant valve enters the era of manufacturing competition

At the "seminar on competitiveness of China's manufacturing industry" held by China informatization 100 people's Congress on July 2, 2016, China informatization 100 people's Congress and Deloitte jointly released the "2016 global manufacturing competitiveness index report" (hereinafter referred to as the report), which showed that China was still the most competitive manufacturing country in the world in 2016, but with the increase of labor costs and the increase of talents, innovation, innovation, innovation, innovation, etc This position is facing the challenge of the United States.

The era of relying solely on cost advantage to win is far away. The competitiveness of China's manufacturing industry is shifting from the previous "cost innovation" to a wider range of technology and product innovation. Intelligent manufacturing, service-oriented manufacturing and Internet manufacturing are rare opportunities for China. China is expected to create new competitive advantages in these fields.

China and the United States compete for the most powerful manufacturing country

According to the report, in addition to the traditional cost advantage, China's manufacturing industry has entered an era of competition for ceramic wear-resistant valves. The long-term development of infrastructure has consolidated the role of advanced technology in the future manufacturing industry. At the same time, new advantages such as increased investment in scientific research and expansion of the middle class are also forming.

In terms of R & D, China is the second largest R & D expenditure country after the United States. The proportion of total domestic R & D expenditure in GDP increased from 0.9% in 2000 to 2% in 2014. In absolute terms, it increased from US $41 billion in 2000 to US $344.7 billion in 2014, an increase of 700%.

Accordingly, since 2000, the annual growth rate of patent applications in China has been 31%, from 579 in 2000 to 25539 in 2014, the number of patent applications is second only to the United States and Japan.

According to the report, China's middle class is growing rapidly and is expected to reach 630 million by 2022. Middle class consumption accounts for 78% of household consumption, compared with only 4% in 2000, which will form a strong domestic product consumption market.

In addition, China is also a strong raw material supply base, which is conducive to the reduction of manufacturing costs, and infrastructure construction is more competitive than other Asian countries.

However, the report also points out that China's manufacturing industry is facing the challenges of slowing economic growth, overcapacity, low labor productivity, insufficient innovation ability and low regulatory efficiency, and ceramic wear-resistant valve has entered the era of manufacturing competition. At the same time, the United States is competing with China for the first place. According to the report, the United States is likely to surpass China and become the first place by 2020.

"China's labor cost advantage is declining, and its performance in talent, innovation, energy policy, infrastructure and legal environment is inferior to that of the United States, which is the main reason why the United States may surpass China."

According to the report, in the ten years since 2005, China's labor cost has increased five times, 15 times higher than that in 1995, which has reduced the cost arbitrage between China and developed economies. Some enterprises in developed economies have transferred their production to lower cost countries or moved back to their own countries. At the same time, the aging population is also a major challenge for China's manufacturing industry.

According to the school of government management of Peking University, the competitiveness of manufacturing industry pointed out in the report focuses on manufacturing links in the industry, thus more reflecting the impact of labor costs“ The competitiveness of manufacturing sector depends on the comparison between labor cost and labor productivity. In China, if labor cost rises, but productivity fails to rise in the same proportion, the competitiveness will decline. "

In fact, while China is talking about why it can't make high-end toilet covers, the United States is also talking about why the United States can't make iPhones. According to Gao Shiji, moderator of the conference, executive member of the China informatization 100 people's Congress, and director of the Institute of resources and environmental policy of the development research center of the State Council, the reason why Americans can't produce iPhones and iPads at home is not only that Chinese labor is highly skilled and cheap, but also that China's more than 700 parts suppliers can flexibly meet their manufacturing needs, which is impossible to move back to the United States.

Because both China and the United States have a scale unmatched by other countries, the focus of manufacturing competition is the competition between China and the United States. The expectation of the recovery of American competitiveness comes from the return of American manufacturing industry and the strategy of advanced manufacturing.

How to reshape the new advantages of manufacturing industry?

The report asserts that the time is gone when a country can establish its dominant position only by relying on a single advantage (such as cost competitiveness). Ceramic wear-resistant valves have entered the era of competition for manufacturing industry. Leading countries are taking a more balanced approach to talent, cost competitiveness and innovation, so as to stand out, The ongoing battle for global manufacturing hegemony belongs to those countries that give priority to the development of comprehensive innovation programs.

This kind of innovation first comes from the technical level. Advanced technology is increasingly accelerating the improvement of manufacturing competitiveness. With the full integration of digital and physical manufacturing world, the world may enter the fourth industrial revolution, and the countries that can successfully cope with this transformation will be the biggest beneficiaries.

It is a trend for the United States to strengthen its competitive advantage. An important reason is that the United States has transplanted its competitive advantage in the field of it to the field of manufacturing.

How to reshape the new competitive advantage of China's manufacturing industry? Chen Ning, director of corporate strategy consulting at Deloitte, said that there are three major opportunities for China's manufacturing industry: intelligent manufacturing, service innovation and Internet.

In terms of intelligent manufacturing, due to the urgent demand for human replacement and the shortening of product development time to market, the proportion of enterprises that choose to widely use intelligent equipment increased from 11% in 2013 to 23% in 2015. At the same time, services are changing from the compensators of products to the differentiated competitors, and now they have become the providers of solutions for the whole manufacturing industry. In addition, the Internet is integrating into various fields such as machine tools, automobiles and construction machinery, which has brought about profound changes in these fields and produced a large number of new products and manufacturing models.

Can't give up middle and low end manufacturing

It is undeniable that there are large-scale low-end traditional manufacturing industries in China. How to transform and upgrade these industries has attracted much attention.

In the manufacturing sector, China's real advantage lies in low-end labor-intensive industries, which is the reason for the slow growth of labor productivity in the long run“ In the next stage, China must make breakthroughs in technology and capital intensive industries, transform its industrial structure, and become a country that mainly exports high-end technology intensive and high value-added products. "

What's more sad is that it's difficult for the middle and low end of China's whole industrial chain to form a soil for innovation“ As a machine tool assembly enterprise, we are ultimately based on customer needs (to produce), but we have a lot of pain in the process of integrating the front-end industrial chain: China's entire industrial chain is in the middle and low end, in this case, it is very difficult for you to achieve the middle and high end. "

It is suggested that traditional industries should be upgraded to improve their automation, networking and digital level. Its research in Hebei found that many traditional enterprises can improve efficiency and create value through public cloud and big data. It is suggested to vigorously develop producer services around traditional industries. In addition, ceramic wear-resistant valve into the era of manufacturing competition, the development of high-end industry should also play a radiation role, driving the development of traditional industries.