Smart Industry 1/2019

aim to set up IC production facilities
and major companies, including
Alibaba, Baidu, Gree Electric, and Tencent,
have pledged to invest more in
chip research and development. Yet,
for all this energy, China will be forced
to take the slow road as the country
does not have manufacturers of chipmaking
equipment and the US has
begun to crack down on the export of
this vital technology.
At the end of last year, Chinese DRAM
maker JHICC (Fujian Jinhua Integrated
Circuit Company) was indicted
on charges of economic espionage
for stealing manufacturing secrets.
Before that, Washington had slapped
the company with an export ban preventing
it from obtaining US-made
equipment, a move seen as impeding
its efforts to enter mass production.
China’s homegrown chipmakers also
face a talent crunch. A report last
August in the state-run Global Times
noted there are presently only about
300,000 of the 700,000 engineers
needed for the growing sector.
These obstacles will not deter China
from its technological ambitions.
Spurring innovation is a central policy
focus for Beijing as the drivers that
propelled the economic miracle –
cheap labor and surging fixed-asset
investment – gradually lose steam.
In a 2015 report, McKinsey found
that China would need to generate
at least two percentage points of
growth through innovation to maintain
its fast gross domestic product
(GDP) growth rate. The industry needs
to generate economic innovation to
propel itself to the next stage of development.
To avoid the middle-income
trap, which has claimed places
such as Brazil and Mexico, a country
needs to shift from imported to indigenous
innovation.
This is the complex political and social
background against which China’s IoT
is seeking to compete with the West.
Zhu’s company plans to enter international
markets this year, starting with
Southeast Asia and the United States,
but he scoffs at the notion that China
will ever dominate IoT.
“How can any one country ever dominate
IoT? You may have products
manufactured in China, but they are
designed in the United States and
built on German machines. However,
if you ask about Chinese brands
China is really
nowhere near
the cutting edge
of IoT technology.
Zhang Jun,
Fudan University
dominating, that is different. I believe
Chinese companies will be able to
compete on the world stage in terms
of quality and value,” he says.
Farid also rejects the notion that China
will dominate. “We are really only
at the beginning of IoT. Previously it
was about getting sensor networks
deployed, now it is about getting
AI to understand the data coming
out of the sensors,” he explains. “In
this area, both China and the United
States have their own advantages,
I don’t think one country will dominate.”
photo ©: Liuxg 2000
The Overall scale and growth forecast of China’s IIoT in year 2010 to 2019
(100 million RMB)
4000
0.45
3500
3000
2500
2000
1500
1000
500
0
37.10%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
24.60%
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
source ©: China's Ministry of Industry and Information Technology
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