Why Made in China 2025 Will Succeed, Despite Trump

But the labor costs and the lack of hand hold him back. During the Lunar New Year holidays, when most of China closes and returns home, some 500 executives, engineers, and administrative staff of Mentech have had to work three hours after their usual day of work to maintain the business. factory, said Zhang Xiaodong.

Mentech asked Mr. Zhang and others to find how to automate the factory. They spent two years working late into the night. The machines need to tweak. The components had to be redesigned so that the machines could make them. Several projects failed.

"All the problems have no solution," Zhang said. "We know that intelligent manufacturing is the future, but getting there is not easy."

Today, a workshop that once required more than 300 workers now needs 100 workers More than half of the factory has been automated.The workers grouped around the machines will probably be replaced by machines themselves in a year or two.

To help, the Dongguan government has provided 1, $ 5 million in grants It also attracts start-ups and helps scientists open research centers to provide more know-how.

A start-up helping Mentech is Dongguan's intelligent precision technology, which will provide much of the machinery needed for complete automation. "Because the equipment will be manufactured in China, it will be cheaper than the automation systems of Japan or the United States." The biggest trend in the manufacturing sector is that automation is irreversible, "said Forest Tian, ​​a former venture capitalist who founded Precision Intelligent Technology. "There will be a huge demand for these machines."

The Dongguan government has taken other steps to ensure that these innovation centers help local manufacturers. For example, it has trained about 30 research institutes in partnership with major Chinese universities. Once the initial money was given, the Dongguan officials told the institutes that they had to find ways to make money on their own.

The institutes have teamed up with companies like Guangdong Janus Intelligent Group Corporation, a cellphone parts maker familiar problem of high labor costs. Experts in the field have become repeat visitors to his factory.

"We call that 18 Buddhas coming to Dongguan," said Huang He, the leader of the Janus smart-factory enterprise, referring to the followers of the original Buddha.

In a Janus factory, rows of automated machine tools operate with robotic arms and green conveyor belts in a space the size of a football field. The robotic arms feed the machines with metal blocks that perforate, crush and wash them. Cases for phones and tablets come out.

The factory needs 16 workers on duty, instead of 103 before being automated. Robotic arms are made in China.

There is no doubt that many Chinese companies will fail in their modernization efforts. Made in China The other 2025 goals, such as building world-class microchip industries or autonomous cars, remain out of sight for now.

Yet, Dongguan suggests that the Made in China 2025 will succeed partly because the effort is bigger than Beijing. Chinese companies and local authorities are determined to climb the value chain so as not to fall into obsolescence. The best Washington can do is make sure its policies help US companies stay ahead of the game.