China front-loads future with new industrialization

Nation exploits 5G, AI, IoT, big data to modernize industry, attract foreign investment

Some 500 meters underground, in a mine in Qingdao, Shandong province, an automated electric locomotive loaded with gold ore and video cameras onboard runs smoothly as workers on the surface monitor its movements on a real-time feed.

Liu Pengnan, deputy general manager of Shandong Gold Mining (Laixi) Co, which runs the Qingdao mine, said: "Superfast 5G allows radio signals to pass through thick walls, ceilings and floors. We can access very high-speed internet, making it possible for our frontline workers to remotely control underground equipment, a big improvement in safety for them."

The mine is well within the ambit of China's 5G network, thanks to the technological support of Huawei Technologies Co and China Mobile — a stellar example of how traditional sectors in China are gradually embracing the newest technologies to upgrade themselves.

The application of 5G technology in mining is one of more than 8,000 5G-plus industrial internet projects in China, and offers a glimpse of the country's relentless drive to promote new industrialization across its sprawling traditional industrial economy.

New industrialization is a process of modernizing traditional industries by incorporating digital technologies and related processes. Thus, 5G, artificial intelligence and big data, to name just a few, are now used in ways that can boost industrial growth.

For example, machine vision technologies are used to inspect industrial products remotely. Employees harness 5G to remote-control cranes at manufacturing plants and industrial facilities hundreds of kilometers away. This approach is making industrial production in China more efficient and safer.

The nation has its top leadership to thank for it, and for according great importance to pushing forward new industrialization. The larger goal is to lay a strong material and technological foundation for Chinese modernization.

Jin Zhuanglong, minister of industry and information technology, China's top industry regulator, said, "We will draft guidelines for the large-scale application of 5G-plus industrial internet technologies in different sectors, and encourage leading enterprises to play a vital role in driving the coordinated development of upstream and downstream industries in industrial chains."

More efforts will be made to carry out collaborative research on industrial chains and promote systematic breakthroughs in key products, such as industrial internet platforms, industrial software and industrial control systems, Jin said.

The senior official called for more work on leveraging China's edge in 5G technologies to accelerate the research and development of industrial-grade 5G products, and cultivate more leading enterprises and unicorns (startups with a valuation of over $1 billion).

Data from the ministry showed that China has built the world's largest 5G network, with more than 3.2 million 5G base stations by the end of October. The scale of China's industrial internet industry has now exceeded 1.2 trillion yuan ($168 billion), with over 89 million connected industrial devices.

Yu Xiaohui, head of the China Academy of Information and Communications Technology, said the industrial internet has proved to be very effective in upgrading traditional industries.

"The industrial internet has been used in more than 50 percent of eight industrial scenarios in large enterprises, including visual quality inspection, intelligent warehousing, quality traceability, intelligent production scheduling and lean production," Yu said, adding that it is also increasingly used in modeling and analysis scenarios, such as process optimization, equipment fault diagnosis and prediction.

For instance, in a 5,400-square-meter workshop of Xinneng Technology, a manufacturer of electricity equipment in Jinan, Shandong province, automated guided vehicles move production materials and rail-guided vehicles assist in production processes.

Song Zhigang, deputy general manager of Chinese industrial internet company Inspur Yunzhou, which provides the industrial internet platform for the Jinan workshop, said the company has developed precise construction plans for the factory to quickly locate and overcome its weaknesses and bottlenecks.

By adding sensors that can detect sound, light and electricity, it helps ordinary devices produce sound and achieve interconnections between people and other devices. "We have helped the workshop reshape business processes with lean thinking and established a more scientific, standardized full-process management system," Song said.

Xue Junjie, director of the production and manufacturing center at Xinneng Technology, said, "Inspur Yunzhou has empowered our company technologically, increasing our production efficiency by 27 percent and reducing the workshop operating costs by 17 percent."

Inspur Yunzhou said its industrial internet platform focuses on helping eight key industries — equipment, electronics, chemicals, mining, steel, energy, food and parks — to promote high-end and intelligent manufacturing transformation.

Yu Shaohua, an academician at the Chinese Academy of Engineering, said that replacing traditional industrialization with new industrialization will inject new vitality into the high-quality development of the real economy, as digital technologies such as 5G, industrial internet, big data, cloud computing and AI are getting increasingly intertwined with manufacturing.

"Advancing the deep integration of the digital economy and the traditional industrial economy is an important path to achieve new industrialization, which will spawn 'new infrastructure', new application models and a new industrial ecology," Yu said.

China's new industrialization push is also bringing significant opportunities for foreign companies, senior executives said.

Denis Depoux, global managing director of consultancy Roland Berger, said new industrialization is one of the key drivers of China's future development, and this will generate fresh growth opportunities for multinationals.

"Thanks to the improved productivity, broad industrial clusters and well-established infrastructure, China was, is and will remain the factory of the world," Depoux said.

"The combination of a broad local market and the strong legacy export base make China difficult to replace. We believe that China's fundamentals remain strong, in spite of a difficult transition in the short term. The global factory is now producing more value-added products because of the massive new industrialization efforts," he said.

More and more foreign companies are seeking to benefit from such strengths of China. New industrialization is the top area for more potential foreign investment, followed by green technology and other domains, according to a survey earlier this year. For the survey, the China Council for the Promotion of International Trade contacted more than 390 foreign-funded enterprises and foreign business associations.

Lily Wang, head of the engineering plastics business unit at Covestro, a producer of polyurethane and polycarbonate raw materials, said the German chemical company will continue to invest and expand in the Chinese market that is full of "vibrancy, development potential and pace".

In October, Covestro announced that its first dedicated line for the mechanical recycling of polycarbonates began operations in Shanghai. Its cumulative investment in China exceeded 3.9 billion euros ($4.3 billion) as of the end of 2022.

Andreas Muller, CEO of Georg Fischer, a Swiss industrial company, said: "China is one of the most important markets for GF. On a global scale, it is the biggest single market for GF's three divisions, namely the Casting Solutions Division, the Machining Solutions Division and the Piping Systems Division.

"The largest number of machine tools are being consumed here in China, so you have to be here in China. The most cars are being built here in China, and the most new electric vehicles are being built in China as well," he said.

GF, Muller recalled, held opening ceremonies for its two factories in Yangzhou in Jiangsu province and Shenyang in Liaoning province in late April.

Thomas Zhao, vice-president of China sales at Analog Devices Inc, a US chip company, said: "Nowadays, Chinese industrialization focuses on digitization, intelligence and sustainability. ADI strategically centers on the technical trends of connecting, controlling and digital manufacturing, which means we see more opportunities in China."

Chen Xudong, chairman and general manager of IBM Greater China, said: "Apart from its colossal market size, China possesses a complete and diverse industrial chain, as well as a highly skilled workforce. As China accelerates industrial upgrading, I believe that it will bring new growth opportunities in sectors such as new energy, artificial intelligence and green low-carbon industries."