Rise in Consumer Sophistication

Research suggests that by 2020, the income of more than half of China's urban households, calculated on a purchasing- power-parity basis, will catapult them into the upper middle class, a category that barely existed in China previously. The members of this group already demand innovative products that require engineering and manufacturing capabilities many local producers do not yet adequately possess. An executive of a Chinese television-panel maker, for example, recently confessed that his company cannot fully meet the requirements of high-end customers and that the quality of his company's flat-screen panels is exceeded by that of products from fast-moving South Korean competitors.

China's automakers face a similar challenge: consumers perceive their brands as lower in quality, even compared with foreign brands assembled in nearby Chinese factories.

These opportunities have led manufacturers in a range of sectors from appliances and chemicals to electrical and office machinery, pharmaceuticals, telecommunications gear, and transportation equipment to pursue projects that meet this need of customer sophistication.

Shift from made in China to "Intelligent Manufacturing in China"

According to (China Today, 2016) report it is clear that the socio-economic goals China has set for itself, including the "two centennial goals" and building a moderately prosperous society in all respects, cannot be achieved through the country's present low-end manufacturing.

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Last year, China unveiled a roadmap for the future of manufacturing - the Made in China 2025 strategy. Taking "intelligent manufacturing" as its entry point, the strategy's ultimate aim is to make China a manufacturing powerhouse through innovation and "intelligence."

"This means that, by the year 2025, China's comprehensive index will be close to that of Germany and Japan when they became manufacturing powers.

Industrialization will thus enable China to join the second echelon of manufacturing powers worldwide," Minister Miao said.

"Made-in-China 2025, Internet plus, informatization, and intelligent manufacturing are what enterprises should focus on during the 13th Five-Year Plan period," former Sinopec Chairman Fu Chengyu said. "We're used to the old production model, but must now change our concepts by integrating the five principle of 'innovation, coordination, green developing, openness and sharing' into the manufacturing industry," he added.

"The information network has developed well in China, and the Internet has been successfully applied to marketing and services. If we can also apply it to industry, China is bound to reach a higher level of industrialization," Fu Chengyu said.

Premier Li Keqiang stressed that efforts should be made to transform China into a manufacturer of advanced, quality products, and that the country should foster the spirit of craftsmanship that strives for perfection to make more diverse, high quality, brand products.

"Now is the time for us to build our own brands and produce prestigious products and to promote growth through industrial upgrade," Yang said.

"The spirit of craftsmanship has been fostered during the industrialization process. Its focus is on quality and the manufacturing process. Creating a premium product takes a great deal of time and energy," Fu said, "especially the fine products we see on the market in Japan and Germany."

"Western developed countries achieved industrialization after several rounds of development; therefore, China must follow a similar path. In five to 10 years, we will catch up to the world advanced level of industrialization," Fu concluded. (China Today, 2016)