The Implementation of “China Manufacturing2025”

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The Implementation of “China Manufacturing2025”

Ministry of Industry and Information Technology

(March 11, 2017)

To implement “China Manufacturing 2025”, the first ten-year action guideline for building China into a strong manufacturing nation, is an important strategic move made by the CPC Central Committee and the State Council for the future development of our manufacturing sector Since its promulgation, under the coordination of the State Leading Group for Building China into a Strong Manufacturing Nation,relevant agencies have improved top-level designing and working mechanisms,strengthened synergy coordination and interaction among different bodies and at different levels, and gave play to the role of enterprises as principal partand the role of key projects as enabler. Progress was made in various aspects of our work which played an important role in stabilizing industrial growth and speeding up manufacturing transformation and upgrading.

I. Progress of Main Activities

1. Plans were vigorously implemented and “Five Major Programs” yielded initial results. The Ministry of Industry and Information Technology (MIIT), in collaboration with relevant agencies including National Development and Reform Commission,Ministry of Science and Technology and Ministry of Education, published and implemented eleven supporting plans and a full range of supporting policies and measures . Five major programs were carried out, including the construction of national manufacturing innovation centers, smart manufacturing, consolidation of industrial foundation, green manufacturing, and high-end equipment innovation. As of now, the first innovation center -- National Power Battery Innovation Center, was established, where as preparation for establishing the National Additive Manufacturing Innovation Center was underway, and 19 provincial manufacturing innovation centers were built. 226 projects for comprehensive and standardized trial as well as new model application of smart manufacturing were implemented, 109 smart manufacturing pilot programs were selected and the first batch of 19 public service platforms for industrial technologies was established. Breakthroughs were achieved for a full range of core spare parts, key basic materials and advanced basic technique, as a result of the implementation of a series of major breakthrough actions and one package application plan. The building of a green manufacturing system was initiated.99 enterprises were organized to conduct pilot work on green design. 51 national low-carbon industrial parks were built. 57 high-risk pollutant reduction programs were undertaken. The energy consumption per unit of the added value for industrial enterprises above the state designated scale decreased by about 5%. High-end equipment innovations began to bear fruits, with significant breakthroughs made in areas such as key and auxiliary technologies of high-speed railway, and key materials for hard-shell cell of electric vehicle.

2. Initial progress was made in key milestone projects focusing onmajor objectives. Among the 15 key milestone projects of the year, 7 were fully implemented, 4 were basically implemented, and others were in progress. Some projects achieved breakthroughs. For example, the first flexible hybridindustrial robot was successfully developed, and the capability for its small-volume production achieved. RV reducers has the capability for volume production with overseas orders and harmonic wave decelerator is capable of large scale production.

3.Implementation of pilot projects has taken root. The work of setting up pilot cities / city clusters for “China Manufacturing 2025” was actively promoted, with 8 cities (Ningbo, Quanzhou, Shenyang, Changchun, Wuhan, Wuzhong, Qingdao and Chengdu) approved as pilot cities, and five cities in south Jiangsu province, west bank of Pearl River in Guangdong Province and Changsha, Zhuzhou and Xiangtan of Hunan Province approved as pilot city clusters. Currently, in line with the implementation plan, all pilot cities /city clusters started comprehensive pilot work on industrial upgrading, technological innovation, policy guarantee and talent training, and began to explore new models and paths for manufacturing transformation and upgrading under the new normal situation with a view to gain experiences that can be replicated elsewhere and applied widely as early as possible.

4. Region-specific guidelines were introduced to facilitate differentiated development across regions. Following the principle of “promoting differentiated development and ministry-province cooperation based on comparative advantages”, MIIT strengthened alignment with all localities and formulated “Province and Municipality Specific Guidelines for China Manufacturing 2025 (2016)” to help solve such long-standing problems as redundant construction and homogeneous competition. In line with "China Manufacturing 2025", and taking into account of local resource advantages, industrial development status, geographical conditions, and market environment, all localities identified development priorities and goals and developed related policies and measures to accelerate industrial transformation and upgrading. By the end of 2016, 29 provinces, autonomous regions and municipalities have promulgated implementation plans or guiding documents designed to pursue a new environment for developing manufacturing, which suits local conditions, boasts distinctive local features, and ensures coordination across regions and differentiated competition.

5. The integration of manufacturing industry and Internet achievednoted results thanks to more effective policy guidance. Guided by policies such as Guidelines on Promoting Internet+ and Guidelines on Deepening Integration of Manufacturing Industry and Internet as issued by the State Council and as a result of efforts by all parties concerned, Internet was widely applied in the R&D and designing process. The key products and equipment became more intelligent. In 2016, the penetration rate of applying digital R&D tools for enterprises reached 61.8% and the digitalization of key processes reached 33.3%. The development of “mass entrepreneurship and innovation” platforms for large enterprises yielded good results, in which, 47% established and operated platforms for collaborative innovation and the state-owned key enterprises built up 110 Internet-based platforms for "mass entrepreneurship and innovation". Standard implementation of the administrative system for the integration of manufacturing industry and internet proceeded smoothly involving over 4,000 enterprises nationwide. More than 72,000 enterprises did self-assessment, self-diagnosis, and self-benchmarking, with 8.8% decrease of operating cost and a 6.9% increase of operating profit on average for these enterprises. Industrial Internet was promoted and prospective studies focusing on top-level architecture and key standards as priorities were undertaken.Collaboration among enterprises, academia, research institutes was strengthened and application was accelerated through pilot programs.

6. Initial results were achieved in quality improvement and branding. implementation of special action. Since the implementation of the special action on enhancing the variety, quality and branding for consumer goods industry, the General Office of the State Council issued Opinions on Special Actions of Enhancing the Variety, Quality and Brand for Consumer Goods Industry and Creating Favorable Market Environment and Plan for Improving Standard and Quality of Consumer Goods (2016-2020), and MIIT, the General Administration of Quality Supervision, Inspection and Quarantine, and the State Administration of Science, Technology and Industry for National Defense jointly released jointly Guidelines on Special Actions of Enhancing Quality and Brand of Equipment Manufacturing Industry and Plan for Enhancing Standardization and Quality Improvement of Equipment Manufacturing Industry.In 2016, 23 quality control and technical evaluation labs for industrial products were ratified, 669 compulsory standards and plans were merged and streamlined, and 208 industrial standards for consumer goods were released. We supported 11 international standard drafts proposed by China, which laid a solid basis for improving the quality of consumer goods. 251 pilot enterprises for brand development were identified across the industry. The first batch of 22 industrial clusters participating in the pilot projects for regional brand development enjoyed on average 2.3% market increase, with over 10% export growth rate and the output value ratio of new products increased from 27% to 34.1%.


II. MainDifficulties and Problems

1. International environment remains complicated and challenging. The global economy is now in a period of moving toward new growth drivers, and the role of traditional engines to drive growth has weakened. Despite the emergence of new technologies such as artificial intelligence and 3D printing, new sources of growth are yet to emerge, and the global economy has remained sluggish. Anti-globalization sentiment and protectionism are on the rise, bringing more uncertainties.

2. Innovative development path remains to be explored. As there is no off-the-shelf experience to draw from in terms of transforming and upgrading the manufacturing sector and achieving the shift between new and old driving forces, we have to rid ourselves of dependence on traditional ways of development. There is still a long way to go when dealing with issues such as how to cultivate new industry and transform the old one, stabilize growth and adjust structure , and to address the balance of government guidance and market role.

3. Market forces need to be allowed to play a more effective role. Faced with pressure from economic downturns, some regions and sectors are in a rush to promote investment and stabilize growth. Meanwhile, we need to be fully aware of issues like the decrease of investment, particularly private investment in the manufacturing sector, and the extreme pressure that some manufacturing companies face in production and operation. Necessary policies and measures must be developed promptly to provide effective guidance.

III. Next Steps

1. To implement initiatives such as “Five Major Programs”. Develop and issue the cultivation plan of “mass entrepreneurship and innovation” platforms for manufacturing companies, and take special actions accordingly, focusing on improving the supporting capability for innovative technologies such as industrial cloud, industrial big data and industrial Internet. Promote the development of Innovation centers in the fields of robots, electronics & information and new materials, and guide and facilitate establishment of provincial innovation centers. Develop new models for discrete smart manufacturing, process smart manufacturing, network coordinated manufacturing, large-scalepersonal and customized service, as well as remote operation and maintenance. Make breakthroughs in key technologies and equipment, such as additive manufacturing, smart sensing and control. Continue to implement a series of major breakthrough actions and one package application plan., improve the basic system for industrial technologies, enhance basic public service platforms for industrial technologies, and promote interactive development between the whole set / system and basic technologies. Facilitate development and integration of green manufacturing system, as well as pilot program for transforming the green development of traditional manufacturing sector, adopt clean production process, improve efficiency of water resource utilization and transform basic manufacturing technique in an environment-friendly way. Focusing on the development of key systems and core parts, facilitate breakthroughs in a range of key equipment which are subject to export restrictions abroad and urgently needed domestically, such as aero-engines, gas turbines and high-end CNC machine tools.

2. To extend coverage of pilot cities and city clusters. Select 20 to 30 cities / clusters with good conditions and exemplary role, and continue to promote pilot programs of  “China Manufacturing 2025” . Provide guidance to pilot cities /city clusters in initiating the work on implementing the five new development concepts, ways to achieve tasks and supporting policies and measures. On the one hand, enhance coordination and supervision, establish evaluation system and create an environment where central government, provinces and pilot cities focus on key areas, collaborate and support each other; on the other, by making use of the interactive mechanism at different levels, enhance guidance and regulation, and pursue differentiated development of the manufacturing sector across regions.

3. To accelerate the construction of key milestone projects. We will coordinate the implementation of the key milestone projects for 2016 which are still in progress, to specify the division of responsibilities and schedule, to ensure sound implementation of the projects. Furthermore, focusing on key areas and bottlenecks defined in “China Manufacturing 2025”, we will continue to select arange of projects which have a sound foundation and high relevance, and which have long been the bottleneck for the industry and are likely to achieve breakthrough in the next 2 or 3 years, as key milestone projects for 2017 to advance with concentrated efforts.

4. To implement a new round of key programs on technological transformation and upgrading. Implement the key project package for transforming and upgrading manufacturing sector, support major projects on transformation of corporate intelligence, upgrading of basic capabilities, promotion of green manufacturing, development of high-end equipment. Continue to publicize Investment Guidelines on Technological Transformation and Upgrading of Industrial Enterprises, strengthen guidance for enterprises, localities and financial institutions. Improve the database on key corporate technological transformation projects and compile annual guiding plan, enhance information sharing and matchmaking between industry and financing, and develop financial products and services that match with technological transformation.

5. To optimize development environment for manufacturing sector. Streamline administration and delegate more powers, improve regulation and optimize services. Speed up the transformation of government functions, improve regulation on industrial access, and establish an operational and post-operational regulatory system which is transparent and efficient with clear division of rights and responsibilities. Implement targeted industrial policies and strive to make policies inclusive and functional. Improve synergy and coordination between industrial policies with those of taxation, financing and trade. Support SMEs development, implement preferential taxation policies already in place, support innovative ways of financing for micro- enterprises and reduce effectively costs of enterprises.

6. To promote international exchange and cooperation. Implementing the philosophy of open development, we will promote alignment of “China Manufacturing 2025” with the industrial development strategies of international partners through various bilateral or multilateral cooperation mechanisms, and enhance international cooperation in smart manufacturing, expand cooperation in industrial investment with countries along the Belt and Road regions, implement key projects on international capacity cooperation, in order to achieve win-win cooperation.