Innovation enhances China's manufacturing competitiveness

BEIJING - China's innovation in core technologies has helped manufacturing enterprises become more competitive.

Guan Xiyou, chairman of Shenyang Machine Tool (Group), has played a role in such innovation, with the company developing the "i5OS" intelligent control system.

"Core technologies cannot be bought," Guan said.

Debuting in November at the 19th China International Industry Fair in Shanghai, the "i5OS" is a smart operating system for industry.

"The i5 is actually five 'i,' standing for five English words, industry, information, Internet, intelligent and integrate." Guan said. "We spent 10 years and 1.5 billion yuan ($23 million) to develop the i5 system. We have complete intellectual property rights."

Thanks to the core technology with multiple patents, i5 smart machine tools have received over 20,000 orders. Over 50 agreements have been signed to build smart factories nationwide. The company plans to establish more than 30 intelligent manufacturing valleys with local governments within the next three years.

China is speeding up the integration of information technology with the manufacturing sector and the development of the "industrial Internet."

The Made in China 2025 strategy and the Internet Plus Initiative are both vital for economic restructuring and the digital economy, according to a decision made by a State Council executive meeting in October.

The industrial Internet usually refers to the convergence of the industrial system with Internet-based technology, such as cloud computing and advanced analytics.

China Aerospace Science & Industry Corporation reported on the development of its aerospace cloud network, saying that more than one million companies have registered on the network as of Oct 20, including over 6,600 foreign companies.

More than 97 billion yuan worth of deals have been sealed on the cloud network where business opportunities and production material can be shared.

"The sharing economy is providing new growth momentum for the country's manufacturing industry, while sharing of production material will be an important development trend," said Ding Minglei, analyst with the Chinese Academy of Science and Technology for Development.

"Industrial companies should build cloud platforms that enable greater interconnectivity both within firms and among the entire industrial chain," according to the State Council meeting. "A favorable environment for the industrial Internet will be created, with streamlined administration and fiscal support. Specifically, market access for products and services in the field will be widened, while companies are encouraged to raise funds through social capital and innovative financial services."

"China's economy has been transitioning from a phase of rapid growth to a stage of high-quality development," according to the report of the 19th National Congress of the Communist Party of China in October.

"This is a pivotal stage for transforming our growth model, improving our economic structure, and fostering new drivers of growth ... We need to...accelerate the building of an industrial system that promotes coordinated development of the real economy with technological innovation, modern finance, and human resources," according to the report.

During an inspection tour in Xuzhou, Jiangsu province, President Xi Jinping said China should ramp up investment and channel more energy into research and development to spur the development of the equipment manufacturing sector, noting that "many core technologies cannot be bought."

"Innovation is the source of business core competitiveness," Xi said at Xuzhou Construction Machinery Group (XCMG), a leading domestic manufacturer. Thanks to self-developed heavy-duty machines, XCMG is swiftly increasing its share in the global market.

Xi urged a shift from "Made in China" to "Created in China," stressing more emphasis on quality rather than speed.

More foreign investors look at the country's industrial upgrading as an opportunity and have increased their investment. In the first 11 months, 60.15 billion yuan of foreign direct investment flowed into the high-tech manufacturing sector, an increase of 9.9 percent year-on-year, according to the Ministry of Commerce.