Machinery / Industrial Parts & Tools

The enthusiasm of young Chinese for manufacturing is declining.

Dong Sheng is the boss of Guangzhou Renyi Labor Dispatching Co., Ltd. In 2006, he just entered the labor intermediary industry. At that time, companies came to select workers, "how many people are needed, how many people are there". But since the year before last, recruitment has become more and more difficult year by year. Last year, more than 200 people could be recruited a day. At the end of April this year, this number dropped to about 70 people.

On April 30, the "2020 Migrant Workers Monitoring Survey Report" released by the National Bureau of Statistics showed that the total number of migrant workers in China in 2020 was 285.6 million, a decrease of 5.17 million from the previous year. Among them, migrant workers engaged in manufacturing accounted for 27.3%, and the proportion continued to decline.

From 2008 to 2018, the average annual growth rate of the number of migrant workers engaged in manufacturing in China was -2.84%, and more young people turned to emerging service industries such as food delivery, taxi rides, express delivery, and live broadcasting. Chen Chun (a pseudonym) from Liaoning, in his early 20s, just came to Shenzhen to become an express driver. In his opinion, the freedom and flexibility of driving a car is much easier than entering a factory as an apprentice.

Made in China has reached a critical point of change, and the history of having a large amount of cheap labor has been turned over. On April 28, the Financial Times reported that China’s seventh national census may have a total population of less than 1.4 billion. At the moment, deep aging is approaching, the demographic dividend window is closed, and the costs of land, raw materials, and shipping logistics are all rising, which is pushing Chinese manufacturing companies into a new situation.

The international environment is also quite complicated. The anti-globalization trend and the new crown pneumonia epidemic have prompted developed countries such as Europe, America and Japan to re-examine the global layout of the industrial chain, and have introduced subsidy policies to encourage companies to relocate their manufacturing industries. The status of China's "world factory" is increasingly being challenged by Southeast Asian countries such as Thailand, the Philippines, Vietnam, Indonesia, Laos, Cambodia and Myanmar, and even South American countries headed by Mexico.

At the end of March, Li Yizhong, former minister of the Ministry of Industry and Information Technology, reminded that the proportion of China's manufacturing industry in GDP has dropped from 32.5% in 2006 to about 27% in 2019. The severe situation should be paid attention to. Many experts said that the decline in the proportion of manufacturing will not only drag down the current economic growth and affect urban employment, but will also bring potential industrial safety hazards and weaken China's economic risk resistance and international competitiveness.

Japan's Daiwa Securities has predicted that China will lose its status as the "world factory" by 2022 at the latest. The "Fourteenth Five-Year Plan and the Outline of Long-Term Goals for 2035" adopted by China this year put forward the in-depth implementation of the strategy of a manufacturing powerhouse, and first mentioned that the proportion of manufacturing industry should be basically stable. How to stabilize made in China?

1/"Many people export to major provinces, but now they can't lose out"

On April 29, Nikkei News reported that Panasonic will close its dry battery plant in Shanghai and transfer some of its production capacity for the North American market to its Central American plant because of fierce competition and inability to achieve growth.

In the previous few years, Sony had moved its smartphone factory in Beijing to Thailand; Apple moved eight foundries from China to India; Samsung closed several factories producing mobile phones, computers, and TVs in China and moved to Vietnam. Earlier, international brands such as Nike, Adidas, Uniqlo, and MUJI in the shoe and apparel industry took the lead and turned their foundries to Cambodia, Vietnam, Indonesia, Bangladesh and other places.

Why can't China keep these labor-intensive factories? The core factor is the rise in labor costs. Data released by the National Bureau of Statistics on April 30 showed that in 2020, the average monthly income of migrant workers engaged in manufacturing was 4096 yuan, an increase of 138 yuan over the previous year, an increase of 3.5%, and it was the industry with the fastest growth rate. In 2006, the average monthly income of migrant workers who went to cities for work and business was 966 yuan. In 15 years, the income of migrant workers has roughly tripled. This means that the cost of employment for manufacturing companies has also increased.

Nobel Laureate in Economics Arthur Lewis believes that the oversupply of labor in the agricultural sector and the slightly higher wages in the industrial sector can attract an unlimited supply of labor from the countryside. However, with the increasing expansion of the industrial sector, the supply of labor has become scarce. Only by raising wages can we continue to absorb labor into the industry.

The turning point where labor turns from surplus to shortage and wages rises sharply is the "Lewis Turning Point." When did China's "Lewis Turning Point" appear and whether it is a continuous process, there have been many discussions in economics circles. The "Economic Blue Book" issued by the Chinese Academy of Social Sciences once disclosed that between 2004 and 2011, the increase in China's working-age population (16-65 years old) decreased at a rate of 13.6% per year. This change directly led to no unlimited supply of labor. , The increase in wages of ordinary workers has become inevitable.

From 2012 to 2019, the number and proportion of China's working-age population has doubled for eight consecutive years, and the working population supporting the development of China's manufacturing industry has become less and less. In 2020, there will be 169.59 million migrant workers, a decrease of 4.66 million from the previous year. Large manufacturing provinces such as Zhejiang, Jiangsu, and Guangdong were once large provinces with foreign population inflows, but now they are also facing the problems of "difficult recruitment" and "labor shortage".

After the Spring Festival this year, a subsidiary of Zhejiang Junyin Electric Co., Ltd. did not hire a general worker. In order to catch the goods, the administrative staff had to go to the workshop to work overtime. In March alone, they added 29 days of work. Chairman Li Zhixiong sighed to the reporter of Caijing: “It used to be that many people export to the provinces, but now they can’t lose. Now the proportion of out-of-towners in Wenzhou is declining. People have been out to work for ten or twenty years, and waited until the children started to go to high school. , I will not come out anymore when I go to university."

Migrant workers continue to return, and the overall working hours available for social control are getting less and less. Li Zhixiong observed that many people used to go to work at the age of 16 after finishing junior high school. Nowadays, most young people have a college degree or above, and they only start working after the age of 20. The working hours are generally shortened by about 6 years; in addition, those born in the 70s and 80s The family has many children, and now there are too few newborns, the society is aging again, and there are indeed fewer people going to work.

In many cases, it is not that employers are willing to raise wages to recruit employees. In Qidong, Jiangsu Province, Zhao Xiao (pseudonym)'s father ran a small-scale marble processing factory. Zhao Xiao posted on the Internet to recruit workers. He set the target age between 30 and 50 years old. The monthly salary is 7,500 yuan. With experience, the salary can be increased. But after more than half a year of recruiting, there are very few suitable candidates.

Factories will face an unprofitable dilemma for excessive wage increases. At the same time, young people's attitudes towards choosing jobs are also changing. In recent years, the growth environment of the new generation of young people in China has been greatly improved. Rural children are reluctant to engage in high-intensity overtime, low welfare guarantee, simple working environment, assembly line, and ordinary manufacturing work like their parents. The attractiveness of manufacturing to young people is waning.

Dong Sheng told the Caijing reporter that young people entering the factory mostly "look here, there, go around first, no one is willing to stay and do things."

Yang Dan, deputy chief engineer of Changhong Group, analyzed to Caijing reporters that young people now have the pressure of housing, marriage, and education of children, and they are more willing to do things that can make quick money and realize the freedom of wealth as soon as possible. After the diversification of employment options and values, everyone is willing to express their opinions on Douyin instead of doing things down-to-earth. However, the manufacturing industry itself "comes out and out", relatively speaking, it is not so passionate, and it is more of a step-by-step approach.

Under such circumstances, the advantages of underdeveloped countries in undertaking the transfer of China's manufacturing industries have been highlighted. The year before last, Li Zhixiong inspected Uzbekistan's manufacturing investment environment: a Chinese company invested in the local area and enjoyed preferential policies in terms of land, factory buildings, taxation, etc. It dispatched more than 20 engineers and hired a large number of local employees, with a monthly salary of about 1,000 yuan per person. , A year’s net profit can reach two to three billion yuan.

"People are also very capable, working overtime every day, no problem." Li Zhixiong said, now that Wenzhou's general worker's salary is not mentioned, it is difficult to recruit people who are willing to work. In India, the monthly salary per person is only 600-800 yuan. China has no way to fight for the "demographic dividend" with Vietnam, India and other countries.

2/ How do you view the “premature and rapid decline in the proportion of manufacturing”?

Since March this year, Miao Wei, former minister of the Ministry of Industry and Information Technology, Li Yizhong, former vice minister of the Ministry of Industry and Information Technology, and Cai Fang, chief expert of the National High-end Think Tank of the Chinese Academy of Social Sciences, have all spoken and said that compared with the experience of developed countries, China’s manufacturing industry’s share of GDP has fallen prematurely. , Too fast.

Wei Houkai, director of the Institute of Rural Development of the Chinese Academy of Social Sciences, believes that from the growth pattern of developed countries, in the process of per capita GDP from 8,000 US dollars to 12,000 US dollars, maintaining a reasonable proportion of manufacturing is a country to overcome the "middle income trap". "An important guarantee. In recent years, China has not only experienced the phenomenon of premature "de-industrialization", but also "de-industrialization" has also shown comprehensive and rapid characteristics.

China’s manufacturing industry’s share of GDP has declined since 2006, and the changes can be roughly divided into three stages: From 2006 to 2011, China’s manufacturing industry’s share fell from 32.5% to 32.1%, a slow decline; by 2016, the manufacturing industry’s share It dropped to 28.1%, a rapid decline; by 2019, the proportion continued to drop to 27.2%.

Zhang Yali, an engineer at the Institute of Industrial Economics of the CCID Research Institute of the Ministry of Industry and Information Technology, has done a systematic study on this. She told the Caijing reporter that compared with the industrialization process of developed countries, the share of manufacturing in the United States fell by 8.1% in 27 years, South Korea fell by 1.7% in 6 years, Japan fell by 2.6% in 8 years, and China fell by 5.3% in 13 years. The rate of decline is obviously too fast.

The time of the fall is also advanced. Zhang Yali said that when China’s per capita GDP was US$3,069 in 2006, the share of manufacturing industry declined, while the share of manufacturing in the United States, Japan, and Germany was at US$17,000, US$19,000, and US$20,000. , It began to decline. The proportion of China's manufacturing industry should be around US$19,000 per capita GDP, which is expected to decline around 2040, which is more reasonable.

Why is there a phenomenon of "premature and rapid decline"? According to Zhang Yali’s analysis, the eastern region is faced with rising costs of labor and land as companies upgrade technology and industrial structure. The high price of production factors forces manufacturing companies to transfer to low-cost areas; manufacturing companies’ profits are low and future expectations are not high. The high-level problem persists, and production factors are gradually concentrated in the service industry and real estate industry. The process of ebb and flow has led to a decline in the proportion of manufacturing.

In addition, Zhang Yali said that traditional statistical methods cannot reflect the new business forms and new models formed by the extension of the manufacturing sector. Some manufacturing companies are included in the service industry statistics, which will also lead to a decline in the proportion of manufacturing value added. For example, the integrated circuit industry includes four links in the early stage of development: design, manufacturing, testing, and packaging. The four links are closely integrated, and statistics are included in the manufacturing industry. However, with the development of technology, the four links have become four industries independently, among which design and testing have become service industries. Only manufacturing and packaging are truly included in the manufacturing statistics.

"Like Xiaomi, is it a service industry or a manufacturing industry?" Deng Zhou, director of the Industrial Development Research Office of the Institute of Industrial Economics of the Chinese Academy of Social Sciences, emphasized to a reporter from Caijing that China's manufacturing industry cannot be judged entirely from the data on the proportion of manufacturing industry. Whether the proportion is reasonable. On the one hand, China's later industrialization, the proportion of manufacturing at the time of industrialization cannot be exactly the same as that of Japan and the United States; on the other hand, industrial integration caused by technological progress and its trend of globalization will also cause the proportion of manufacturing reduce.

The statistical data itself can also cause certain misunderstandings. According to Li Zhixiong's analysis, the decline in the proportion of the manufacturing industry is not the same as the lack of growth in the manufacturing industry. People's consumer demand has gradually changed from purchasing material products to service consumption such as tourism and online shopping. The growth rate of the service industry is faster than that of the manufacturing industry, which will lead to a decrease in the proportion of manufacturing. Last year, China's fixed asset investment increased by 2.9%, industry was zero, and manufacturing industry was -2.2%. Li Yizhong believes that the growth rate of investment in industry and manufacturing should be equal to the growth rate of total investment in fixed assets in order to maintain the basic stability of the proportion of manufacturing.

It is worth noting that the manufacturing industry has always been the foundation of China's real economy. The country’s 3.27 million manufacturing companies have absorbed 105 million jobs, accounting for 27.3% of the total employment, ranking first among all industries. Deng Zhou said that the most competitive industry in China is manufacturing, and the decline in the proportion of manufacturing will definitely have a great impact on the competitiveness of the country as a whole. With reference to international experience, even in the United States, where the proportion of manufacturing is too low, a series of risks will indeed arise.

What's more, China is not yet a manufacturing powerhouse. China has the most complete industrial sector in the world, and the output of more than 220 products ranks first in the world. In 2020, China's industrial added value will reach 31.31 trillion yuan, making China the largest manufacturing country for 11 consecutive years. But in 2018, the labor productivity of China's manufacturing industry was US$28,974.93 per person, which was only 19.3% of the United States, 30.2% of Japan and 27.8% of Germany. Miao Wei said that China is in the third echelon in the four-echelon structure of the global manufacturing industry, and it will take at least 30 years to reach the goal of a “manufacturing power”.

3/ How to stabilize the manufacturing industry between the two sides?

Right now, with the return of high-end manufacturing in Europe and the United States and the rise of low-end manufacturing in Southeast Asia, Chinese manufacturing is facing the dual pressure of "sandwiching".

After the global financial crisis in 2008, developed countries have rethinked the development model of "removing the real to the virtual" and implemented the strategy of reindustrialization. The competition in high-end manufacturing is also intensifying. In recent years, the United States issued the "Advanced Manufacturing Partnership Program", Germany proposed "Industry 4.0", Japan launched the "Revitalization Strategy", France promulgated the "Industrial New France", and the United Kingdom implemented the "High Value Manufacturing Strategy". Become the focus of global economic competition.

According to the statistics report released by the American Returned Interview Association, from 2010 to 2018, a total of 757,000 jobs were created due to manufacturing return and foreign direct investment, accounting for about one-third of the newly added manufacturing jobs in the United States during the same period. Only 59% of jobs created by the return of manufacturing from China. After 2008, the decline in the value added of the manufacturing industry as a proportion of GDP in major developed countries slowed down, and even began to reverse its rise.

After the outbreak of the new crown pneumonia in 2020, the global industrial chain has accelerated into a restructuring period. Whether China can find its position in the new round of adjustment is of vital importance.

Optimistically, Deng Zhou judged that the status of Made in China is not easy to be replaced. Chinese manufacturing has become an indispensable part of global manufacturing. Without Chinese manufacturing, the cost and product prices of global manufacturing will rise. In addition, the industries of other countries cannot provide such a large number of products for China's 1.4 billion population. Therefore, China's low-end industries cannot be completely transferred out. It is still necessary to maintain a relatively complete industrial system, especially in technical industries such as chemical raw materials.

At the same time, the education level of the Chinese labor force is improving, and it is changing from a simple unlimited supply of labor to a comprehensive advantage in human resources. China also has competitive advantages in innovation, technological capabilities, and industrial support. For example, Vietnam lacks resources such as engineers and spare parts. Therefore, after the outbreak of the epidemic, it is difficult for the manufacturing industry to operate normally. Deng Zhou said, "We have carried out simple calculations, and the labor costs in Southeast Asian countries such as Vietnam will rise rapidly, and this advantage will be lost in less than ten years."

Deng Zhou believes that the gap between China and developed countries is not

The gap between 0 and 1, but the gap between 1 and 2. This is not something that other countries can cultivate overnight. China will continue to upgrade its industries, but it should be noted that China is already so large that it has become an important participant in the global economic governance structure. In the future, China's industrial division of labor and industrial policies can no longer only consider domestic development as before, and must take into account the impact on other developed countries.

Sheng Chaoxun, deputy director of the Industrial Policy Office of the Industrial Research Institute of China Macroeconomic Research Institute, proposed a strategy: In the next ten years, the goal of China’s industrial development should still be positioned at the mid-to-high end, marching to the second echelon (Japan and Germany) instead of the first echelon. (U.S.) Frontal competition. By 2030, the proportion of manufacturing will be stable at about 30%, advanced manufacturing and strategic emerging industries will account for more than 50% of manufacturing, and the labor productivity of manufacturing will reach the level of about two-thirds of developed countries.

How to achieve this goal? First of all, to stabilize the proportion of manufacturing at about 30%-it is necessary to improve industrial infrastructure and social public services, optimize taxation, financial and other related policies, enhance entrepreneurs’ investment confidence, and promote manufacturing investment growth and social fixed investment The growth rate remains consistent or even higher than the latter. In addition, it is necessary to solve the problem of technical "stuck necks" to prevent companies from stopping operations due to the supply of raw materials and intermediate products, which will cause more risks.

To achieve the second goal-advanced manufacturing and strategic emerging industries account for more than 50%, we must rely on the power of industrial clusters. In March of this year, the Ministry of Industry and Information Technology announced the winners of the advanced manufacturing cluster finals, which was interpreted by the outside world as the "national team" of China's manufacturing industry. 25 industrial clusters in 21 cities in 9 provinces including Shenzhen, Guangzhou, Shanghai, Chengdu, Nanjing, Qingdao, Hangzhou, Changsha, Xi’an, Foshan, Dongguan, Suzhou, Ningbo, Zhuzhou, Deyang, etc. are on the list, involving information technology, Internet of Things, Intelligent equipment, biomedicine, new materials and other industries.

Liu Liehong, Vice Minister of the Ministry of Industry and Information Technology, stated that during the "14th Five-Year Plan" period, we will seize the key nodes of the industrial chain and gradually cultivate specialized and new "little giant" enterprises, manufacturing one-way champion enterprises and industrial chain "chain master" enterprises, and support large-scale enterprises. Enterprises integrate innovative resources and elements, guide small and medium-sized enterprises to provide more unique skills, and promote the integration and development of large and medium-sized enterprises.

"Now that Zhejiang is building industrial clusters, I think it is a good thing. Now and in the future, everyone must truly compete with European and American countries in the mid-to-high-end industrial product market." Li Zhixiong said. In the power industry, foreign companies Schneider and Siemens One product can sell for tens of thousands of yuan. Leading Chinese companies can only sell a few hundred yuan for producing the same products at similar manufacturing costs. China has a large output of production capacity and a small income from production efficiency. The cultivation of industrial clusters will help incubate high-end brands and enhance the right to speak in the formulation of industry standards.

Li Zhixiong believes that if industrial clusters do well, they can also serve as the fastest demonstrating role and promote the common competition and growth of Chinese enterprises. "There are 100 companies in a large industrial zone, and one of them uses automation equipment well, and other companies will learn to follow up to improve their overall strength in competition with foreign countries. In addition, the supporting advantages of the upstream and downstream industrial chains are not easy to be copied. , This is also an advantage of Made in China."

4/How to take the express train of "intelligent manufacturing"?

To achieve the third goal-manufacturing labor productivity to reach about two-thirds of the level of developed countries, we cannot count on population growth and can only rely on intelligent manufacturing.

Li Zhixiong believes that building unmanned factories and realizing industrial automation is the core of solving labor problems, reducing industrial production costs, and improving competitiveness with other developing countries; improving quality control capabilities and product quality through intelligent manufacturing can also promote product quality. , In line with European and American countries.

On April 14, the Ministry of Industry and Information Technology issued the "Fourteenth Five-Year Plan for Intelligent Manufacturing Development (Draft for Solicitation of Comments)", proposing to build more than 2,000 new technology application smart scenarios, more than 1,000 smart workshops, and more than 100 leaders by 2025. The benchmark smart factory for industry development, and key industry backbone enterprises have initially realized intelligent transformation; by 2035, manufacturing enterprises above designated size will be fully digitized.

Since 2015, China has successively selected more than 200 smart manufacturing pilot demonstration projects in nearly 100 industries, and the exploration has yielded initial results. Changhong Intelligent Manufacturing Industrial Park is one of them. This industrial park with an investment of about 5.5 billion yuan covers smart display terminals, smart energy and related supporting industries, and introduces industrial robots, machine vision, edge computing and other technologies into the production process. At present, Changhong's intelligent production line can reduce manpower by 70%, increase per capita output efficiency by 65%, and achieve a logistics automation rate of 95%. Yang Dan said that humanization is a development direction of intelligent manufacturing, but humanization does not mean humanization. The ultimate problem Changhong explores for intelligent manufacturing to solve is to meet individual consumer needs with industrialized means, and to accept fragmented orders with flexible production in the Internet of Things era to achieve large-scale personal customized production.

The prospects are promising, but for more SMEs in China, there is a longer way to go to realize smart manufacturing. On the one hand, intelligent manufacturing needs to find an accurate landing scene. Deng Zhou said that limited by the specificity and the scale of data volume, the integration scenarios of artificial intelligence and manufacturing are mainly in the R&D, marketing and after-sales service links of non-manufacturing industries such as medical, automotive, education, and finance. "What problem does smart manufacturing really want to solve? Where is information technology applied in manufacturing? What difficulties can the manufacturing industry solve?" These answers are still unclear.

On the other hand, smart manufacturing has high investment and high risks, and the effort and investment may not be proportional, which may also trigger investment concerns from entrepreneurs. Li Zhixiong said that various provinces and cities have introduced technological transformation measures such as building digital workshops, but entrepreneurs consider that the current business results are not good. Investing several million or tens of millions of yuan for intelligent transformation will face expensive automation equipment and maintenance costs. Challenges such as expensive and unusable.

"Automation should be promoted gradually, not in a short period of time to pursue complete high-end automation." Li Zhixiong suggested that companies should adapt to local conditions to transform digital workshops, reduce investment points in the first year, and allow employees and management teams to adapt first, starting from the annual increasing labor demand in the workshop , Solve the needs of employee gaps. After the benefit is seen in the second year, it is determined as appropriate to maintain stable production demand and combine man-machine to ensure a good advancement in enterprise capital investment and the application of automation equipment. Yang Dan also believes that smart manufacturing should not set a unified standard for measurement. Enterprises will achieve the best balance at this stage according to their own industry characteristics, business development methods, supply chain, personnel flow, etc., and then continue to improve informatization. And the level of data utilization.

At present, to promote intelligent manufacturing, what else can be done at the national and industrial levels? Many experts pointed out that domestic companies that produce smart manufacturing equipment should be encouraged "like chips." At present, the core technologies and key components and equipment that support the deep integration of artificial intelligence and manufacturing are still controlled by developed countries. Localization can not only reduce costs, but also promote the linkage of equipment online and data between domestic manufacturing enterprises and equipment manufacturers. The Industrial Internet opens up joint innovation in the upstream and downstream of the manufacturing industry chain.

With reference to the experience of developed countries, promoting the deep integration of artificial intelligence and manufacturing is all efforts in strengthening basic research, building big data, forming application scenarios, and strengthening the training of compound talents. To this end, Deng Zhou also suggested: First, attach great importance to the deep integration of artificial intelligence and manufacturing, conduct scientific planning, and establish a national laboratory focusing on basic research; second, build a large industrial database required for machine learning , To consolidate the foundation of big data, and to promote the model innovation and business innovation of the deep integration of artificial intelligence and manufacturing; third, to encourage China's superior manufacturing enterprises to reversely integrate and utilize global artificial intelligence innovation resources, and strengthen strategic connections with the Internet and artificial intelligence-related enterprises ; Fourth, adjust the relevant higher education and vocational education systems to meet the needs of the manufacturing industry entering the era of artificial intelligence, while assessing and preventing social problems that may be caused during the development of artificial intelligence.

"Compared with developed countries, China's need to achieve the deep integration of artificial intelligence and manufacturing is more urgent." Deng Zhou hopes that China can take the express train of international high-end artificial intelligence technology development, climb to the high-end of the global value chain, and achieve the goal of becoming a manufacturing country. The fundamental transformation of a manufacturing power.