On May 19, the State Council officially unveiled the long-anticipated “China Manufacturing 2025” master plan which aims to accelerate the innovative development of the manufacturing industry and the transition of China from a large manufacturing country to a world manufacturing power. The plan will certainly provide a powerful boost to China’s manufacturing industry and favor Manufacturing ICT market.
On May 19, the State Council officially unveiled the long-anticipated “China Manufacturing 2025” master plan which aims to accelerate the innovative development of the manufacturing industry and the transition of China from a large manufacturing country to a world manufacturing power. The plan will certainly provide a powerful boost to China’s manufacturing industry. To facilitate understanding, the core contents of the policy can be summarized as “Three Steps”, “Four Principles”, “Five Projects”, “Eight Reforms”, “Nine Tasks” and “Ten Areas”.
Three Steps: 1) making China a world manufacturing power in ten years; 2) reaching an overall middle level among world manufacturing powers; and 3) ranking among the leading world manufacturing powers in terms of comprehensive strength
Four Principles: 1) dominated by market and guided by government; 2) staying rooted in the present and having the future in sight; 3) Advancing comprehensively and making breakthroughs in key areas; and 4) self-help development and win-win cooperation
Five Projects: 1) manufacturing innovation center; 2) intelligent manufacturing; 3) high-end equipment innovation; 4) strengthening industrial infrastructures; and 5) green manufacturing
Eight Reforms: 1) deepening system and mechanism reform; 2) fostering a fair competition market environment; 3) improving financial support policies; 4) increasing fiscal and taxation support; 5) building a multi-level talent development system; 6) improving policies for small, medium, and micro-sized enterprises; 7) further increasing the openness of the manufacturing industry; and 8) improving the organization and implementation mechanism
Nine Tasks: 1) improving China’s manufacturing innovation capacity; 2) promoting in-depth integration of informatization and industrialization; 3) strengthening basic industrial capabilities; 4) strengthening quality brand development; 5) comprehensively advancing green manufacturing; 6) vigorously promoting breakthroughs in key areas; 7) further promoting the structural adjustment of the manufacturing industry; 8) actively developing service-oriented manufacturing and producer services; and 9) internationalizing the manufacturing industry.
Ten Areas: 1) next-generation information technology; 2) high-end numerical control tools and robotics; 3) aerospace equipment; 4) ocean engineering equipment and high-tech ships; 5) advanced railway equipment; 6) energy saving and new energy vehicles; 7) power equipment; 8) agricultural machinery; 9) new materials; and 10) biomedicine and high-performance medical devices
The release of the “China Manufacturing 2025” plan is certainly a strong catalyst for China’s manufacturing industry. As the saying goes, food and fodder should go ahead of troops and horses. As an essential enabling force of the manufacturing industry, the ICT industry will directly benefit from the plan. Keywords highlighted in the plan such as innovation, intelligence, digitalization, network and industrialization-informatization integration are all closely related to the ICT industry. China’s manufacturing ICT market should capitalize on new opportunities from multiple layers and channels and in different approaches.
ICT demand in key areas will increase: The ten key areas highlighted in the “China Manufacturing 2025” plan have three things in common: 1) fast market growth and huge growth potential; 2) high added value of products; and 3) complex manufacturing. This determines that enterprises will have more resources and greater willingness to invest in ICT in these ten areas than in other areas. This trend is also borne out by the IDC Manufacturing ICT Black Book which shows that the ICT market in these areas grows much faster than in traditional industries. IDC believes that as the government continuously increases support for the ten key areas by introducing a series of incentive policies, there will be a further increase in ICT applications in terms of both depth and breadth.
ICT demand structure will undergo changes: The increasing digitalization of the manufacturing industry will prompt changes in the ICT demand structure. The three go’s (go digital, go online and go intelligent) emphasized in the “China Manufacturing 2025” plan will drive the demand of IDC 3rd-platform technologies (big data, cloud computing, mobility and social). IDC 3rd-platform based applications such as cloud manufacturing, cloud supply chain, social factory and digital workshop will be prioritized by enterprises.
Internet+ will become an important driver of the ICT market: China’s Internet, especially its consumer Internet, is much more developed than that of the overwhelming majority of developed countries. Emerging Internet-based business models will change the DNA of the manufacturing industry. The “China Manufacturing 2015” plan has specific requirements on deepening the application of the Internet in manufacturing and developing Internet-based custom manufacturing and design crowdsourcing. This determines that every link of the value chain from design and R&D to manufacturing, logistics and sales will be reshaped to better adapt to Internet-based consumption models. Traditional solutions such as product lifecycle management, manufacturing execution management, customer relationship management and supply chain management will be more widely adopted and increase end-to-end response. Meanwhile, the utilization of emerging technologies like cloud manufacturing, big data and IoT will be essential for enterprises to implement custom manufacturing.
Software and hardware will be converged to build intelligent factories: The “China Manufacturing 2025” is described as the Chinese version of “Industry 4.0”. In other words, cyber-physical systems (CPS) will be at the core of China’s efforts to build intelligent factories. The integration of manufacturing execution systems (MES), programmable logic controllers (PLC) and equipment, for example, can effectively shorten the production cycle and improve production flexibility. The plan highlights high-end numerical control tools and robotics and additive manufacturing as among the key areas of investment in the future. The promotion of automated equipment and its integration with information systems will make factories more intelligent and directly drive the ICT demand.
Industry standards for manufacturing will be increasingly promoted to remove barriers of informatization: The lack of uniform industry standards has always been a barrier to enterprises’ informatization efforts. One of the five major projects of the “China Manufacturing 2015” plan, “Strengthening the standards system”, is exactly meant to remove this barrier. The government will coordinate enterprise-university-research institute collaboration, support the formation of consortia to promote standardization in key areas and the establishment of standards innovation research bases, and encourage and support the formulation of industry standards and international standards.
The manufacturing ICT market will be reshuffled: As the attractiveness of the manufacturing ICT market increases, the competition in the market will become more intense. ICT enterprises have remarkably increased their investments in manufacturing ICT solutions. 2nd-platform companies will transition towards the 3rd platform. M&A activities will increase. Government favor of homemade products will be a major opportunity for Chinese manufacturers. MNCs in China will actively adjust their strategic deployments. Internet companies will also attempt to tap into the market. In this context, the reshuffling of China’s manufacturing ICT market is inevitable.
According to the goal set in the “China Manufacturing 2025” plan, by 2025, the key areas of manufacturing will become comprehensively intelligent, the operating costs of pilot demonstration projects will go down by 50%, the production lead-time will decrease by 50%, and the yield rate will improve by 50%. The two words “go intelligent” mean that the position of ICT in China’s manufacturing industry will be further consolidated.