Siemens' new digital plant to go on stream this year

Siemens AG, the German technology company, will put a new digital plant into operation in Nanjing, Jiangsu province, this year and keep investing in manufacturing, software and infrastructure across China during the 14th Five-Year Plan period (2021-25), a top company official said.

With many businesses across various sectors having already begun their digital transformation in China, the company's new digital factory in Nanjing will start operations in the second half of this year for its motion control business.

The new factory's productivity would increase 20 percent by deploying Industry 4.0 digital technologies along the entire value chain in Nanjing, said Roland Busch, president and CEO of Siemens AG.

"Already on a global basis, 60 percent of the manufacturing sites are yet to be automated. I would assume that in China, it's a similar number or even a higher number. At the same time, we know that the Chinese labor market has peaked already," he said.

As it is challenging for China to maintain a 6 percent GDP growth rate, which depends strongly on the industrial sector while having less labor in the market, the German executive said that automation and digitalization are the key to meet the country's growth demand.

Siemens currently is assisting Guangdong Huaxing Glass Co Ltd, the largest glass container manufacturer in Asia by output volume, to build 15 digital lighthouse pilot factories across China. This partnership aims to promote the digitalization level of Huaxing Glass, enhance the company's resilience to meet challenges and lay the foundation for its global market structure.

As manufacturing is the backbone of a country's economy, the Ministry of Industry and Information Technology pledged early this month to make efforts to maintain the proportion of the manufacturing industry in GDP, and ensure that the sector can be reliable at critical moments.

The central government introduced a guideline in late March, outlining measures to boost manufacturing services and intelligently transform the manufacturing sector. The idea is to improve the quality and efficiency, innovation capacity and resource allocation efficiency of the manufacturing sector by 2025.

By putting innovation and progress front and center, China's five-year plan will take economic and social development to the next higher level, Busch said, adding with the ambitious expansion of future industries and markets, new technologies are being brought into the mainstream.

To drive progress and economic growth, the plan also includes decisive measures to strengthen and accelerate research and development, he said. The additional investments will be even more effective if the national innovation programs are opened up further.

Experts emphasized that manufacturing services have become a new business form adapted to the digital economy, because accelerating the growth of manufacturing services and promoting digital, networking and intelligent transformation of the sector will sharpen China's manufacturing edge, raise its resilience and provide strong impetus for economic growth.

Integration of services and manufacturing can enhance the competitiveness of products and promote the transformation, upgrade and high-quality development of the manufacturing sector, said Yvonne Zhou, managing director and senior partner at Boston Consulting Group.

Though it will take a long time for China to maintain a stable proportion of the manufacturing industry, more measures are needed to attract capital and talent to the sector, she said.

Therefore, it is vital for the country to take more opening-up measures to create a high-quality business environment for global investors. It would also push more domestic firms to better integrate into the global supply and industrial chains, Zhou said.

Busch, from Siemens, said the opening up of the market is essential because it allows global companies to bring even more investments into China, no matter if they are environment-related investment or for speeding up manufacturing plants.

"We are also looking for opportunities to partner with more Chinese companies and local universities," he said.

Supported by more than 30,000 employees, Siemens runs 21 research and development facilities and a number of factories in the country.