Example of smart manufacturing at China international industry fair in Shanghai
MERICS China Industries
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Smart manufacturing plan seeks to overcome reliance on imports

At a glance: The Ministry of Industry and Information Technology (MIIT) released a draft smart manufacturing development plan to guide the country’s industrial upgrading through 2025. It aims to improve the quality and efficiency of manufacturing whilst reducing resource and energy consumption. Key goals for the next five years include:

  • Increase domestically produced supply to 70 percent of equipment demand and 50 percent of software demand for smart manufacturing purposes; develop internationally competitive smart manufacturing equipment and software
  • Achieve breakthroughs in 18 core technologies with intellectual property rights in areas such as design simulation, hybrid modeling, additive manufacturing and human-machine collaboration
  • Ensure that over half of manufacturers have progressed beyond the initial planning stage of their smart manufacturing capabilities

MERICS comment: This is one of the first sectoral five-year plan (FYP) drafts released following last month’s overall 14th FYP, which prominently featured smart manufacturing as a key driver of China’s strategy to become a ‘manufacturing superpower’ (制造强国).

The requirement to source smart manufacturing inputs locally will pressure foreign firms to shift production to China, thus enhancing supply chain security for Chinese companies. In line with the 13th FYP for smart manufacturing, the domestic supply of smart manufacturing equipment reached over 50 percent by 2020, yet China still sources the bulk of software from overseas.

Whilst the level of smart manufacturing capabilities in Chinese factories remains rather low, their upgrading is picking up speed. A January MIIT report found that the share of companies ranked at a more advanced stage (levels 3 to 5 – the highest level) jumped from 3 to 11 percent between 2019 and 2020. The automotive sector ranked as most advanced in its capabilities, an indication that sectors with significant foreign investment are leading the shift towards a highly automated and integrated industry.

Policy name: 14th Five-Year Smart Manufacturing Development Plan (Draft for Comments) (“十四五”智能制造发展规划(征求意见稿)) (Link)
Issuing body: MIIT
Date: April 14, 2021

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In the latest issue of the MERICS China Industries, our authors also cover the following topics: 

  1. Smart manufacturing plan seeks to overcome reliance on imports
  2. China pledges further market opening in Hainan Free Trade Port
  3. Battery storage capacity set for massive boost to facilitate renewables roll-out
  4. Competition in China’s highly fragmented electric vehicle market heats up further
  5. Research report provides sobering assessment of China’s aerospace and aviation industries
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