China Accelerates Digital Transformation of Manufacturing Sector to Drive Economic Growth

China is ramping up efforts for digital transformation of its manufacturing sector, aiming to cultivate new quality productive forces and bolster economic momentum. The State Council, during a recent executive meeting, approved an action plan designed to propel manufacturing digitalization forward. This plan encompasses various measures aimed at meeting manufacturing needs across different scenarios, accelerating technological advancements, and strengthening supporting efforts, including the establishment of standards and service platforms.

Digital transformation stands as a pivotal strategy in advancing new industrialization and modernizing the industrial system, as emphasized during the meeting. With Chinese manufacturers entering a critical stage in their digital evolution, these latest government policies aim to provide guidance and support to expedite the digital drive, fostering technological application and innovation, according to industry experts.

Zhu Minghao, a professor at Beijing Jiaotong University, underscored the significance of a digitalized manufacturing industry in fostering new quality productive forces. He highlighted that the deep integration of the digital economy and the real economy would lead to the creation of new business forms, models, and services.

Over the past three years, China has initiated smart manufacturing pilot projects, establishing 421 national-level demonstration factories alongside over 10,000 provincial-level digital workshops and smart factories. These initiatives have seen the application of cutting-edge technologies such as artificial intelligence and digital twins in more than 90 percent of the demonstration plants. The widespread promotion of 5G technology has further expanded its application in quality inspection, mining production, and other fields. Additionally, the Industrial Internet now spans all major sectors, with over 200 application examples already established.

The tangible benefits of embracing the digital trend are evident across numerous Chinese producers. For instance, Jiangxi Huayuan Knitting Co., Ltd., based in East China’s Jiangxi province, has substantially reduced production waste and costs following a digital upgrade investment exceeding 10 million yuan ($1.41 million). Gao Wengen, the company’s manager, noted that the digital transformation enabled them to produce 2 grams of clothing at the same unit cost as producing 2 tons previously.

Such digital shifts have contributed to a significant decrease in the proportion of high energy-consuming manufacturing industries in Jiangxi’s total energy consumption over the past two years, compared to the early period of the 13th Five-Year Plan (2016-2020). The province now aims to achieve digital transformation in over 10,000 enterprises within approximately two years.

Recognizing the importance of supporting small and medium-sized enterprises (SMEs) in their digital transition, the State Council meeting emphasized assistance for SMEs to upgrade their equipment and technologies. Zhu emphasized the need to nurture specialized tech companies capable of providing tailored and cost-effective transformation solutions suited to the needs of SMEs.

During a recent inspection tour in East China’s Zhejiang province, a major manufacturing base, Chinese Vice-Premier Zhang Guoqing underscored the importance of supporting the digital transformation of SMEs. China will enhance public services for SMEs and assist them in sharpening their business edges to foster the emergence of innovative firms utilizing specialized technologies to create unique products, Zhang noted.

In conclusion, China’s concerted efforts to accelerate the digital transformation of its manufacturing sector signal a strategic move to enhance productivity, competitiveness, and economic growth in the digital age. Through targeted policies and initiatives, China aims to unleash the full potential of digital technologies, driving innovation, efficiency, and sustainability across industries and fostering a resilient and dynamic economy for the future.

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