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As China rose through the years as a manufacturing powerhouse, the country became synonymous with exports. ‘China used to be the world’s factory’, proclaimed Forbes, as the country overtook the United States as the world’s biggest producer of manufactured goods from 2011 onwards. In 2015, it produced ‘80% of the world’s air-conditioners, 70% of its mobile phones and 60% of its shoes’, as per The Economist. In 2016, its total Manufacturing Value-Added (MVA) was a whopping 3.25 trillion, as mentioned in our previous article on ‘Made in China 2025’.
However, along with that meteoric rise in manufacturing production came an opposing dive in China’s reputation for product quality. As early as 2007, consumers and manufacturers alike were complaining of ‘quality fade’ when it came to Chinese products, explained by Forbes as ‘the deliberate and secret habit of widening profit margins through a reduction in the quality of materials’. Basically, by reducing the quality from batch to batch, factory owners were able to cut costs and increase margins, but with many potential risks.
Surpassing the United States in 2010, China’s manufacturing sector is now the largest in the world, with a total global Manufacturing Value Added (MVA) of USD 3.25 trillion in 2016, according to the World Bank.
China's government has committed to convert from a "high growth" to a "high quality growth" nation cemented in the 13th Five-Year-Plan. So how does this ambitious goal translate into the transformation of China's diverse manufacturing industry? Following our previous article on China's digitalization, let's have a look at the nation's digital upgrade plan for manufacturing - the "Made in China 2025" initiative.
Until recently China has been tagged with economic recession factors such as regional disparities, an aging population, declining heavy-industrial sectors, bursting property bubbles, growth in debt levels, and considerable environmental issues. So how comes, it is now slightly ahead of its goal to double GDP between 2010 and 2020? President Xi's ambition to make China a “moderately prosperous country" is right on track and the country enters 2018 with robust economic-growth momentum. In this post, I want to retrace China's path to it's massive growth unlocked by a combination of several factors, one of which is the "Digital China" agenda.