Editor’s Note: There has been a lot of talk this year about China’s shift from a manufacturing to a service economy, and whether this is a possible feat. Minister of Industry and Informational Technology Miao Wei recently said that China is at least 30 years from such a shift. The author of this article agrees that China is far from its competitors in terms of high-end manufacturing- a necessary component to support a service economy.
The world is not as dependent on “Made in China” products as we might think. The Western manufacturing industry has not decayed enough to be completely reliant on China. Manufacturers are even leaving China for other countries as we transition to a service economy.
Minister of Industry and Information Technology Miao Wei recently spoke about China’s struggles in manufacturing at the CPPCC Twelfth Standing Committee “Made in China 2025” meeting. Miao Wei stated that China is in the third tier (out of four) in terms of global manufacturing and it will be difficult to make fundamental changes to China’s manufacturing economy in the short term. He said that it will take at least 30 years for China to become a global manufacturing power.
Miao Wei said that there are four tiers in the global manufacturing industry. The first tier is the US-led global technology innovation centers, the second tier is high-end manufacturers in regions like the European Union and Japan. The third tier is low-end manufacturing, mainly in emerging countries. The four tier is resource-exporting countries from regions like OPEC, Africa, and Latin America.
Many in China hope that the service economy will soon surpass the manufacturing economy and usher in a new economic age. However, Miao Wei questions whether China can transform into a service-based economy within the near future.
However, in order to do this, China must measure up to first and second tier manufacturing economies. Let’s see how China does against the top 19 tech economies in the world:
1) United States: Universities in the United States are home to more than 70 percent of the world’s Nobel Prize winners. 17 out of the top 20 research universities are in the United States (Tsinghua was ranked about 600). MIT and CalTech train the world’s best engineers and scientists.
The United States has eight of the world’s top ten technology companies. Oracle’s database software is used by Baidu, Tencent, and many government bureaus in China. The United States has the best scientific labs in military technology, aerospace technology and medical technology. The US is unmatched in the field of information science.
2) United Kingdom: The United Kingdom is another leader in high-tech design. Technology produced in Japan and Germany often use chips from the UK’s ARM architecture. The UK has earned a number of Connaught Innovation Awards, second to only the US. The UK has 32 of the world’s top 200 universities. The UK has the world’s top companies in aircraft engine manufacturing, pharmaceutical, biotech, aerospace, microelectronics, military technology and more. The UK has some of the world’s best universities and has made outstanding contributions to science (including cloning the world’s first sheep).
3) Japan: Japan has the second highest number of patents on file in the world (the United States has the most). This is an important indicator of Japan’s capacity for innovation. Japan is third to the UK and US in university rankings and contributions to science and technology.
Japan has many large tech companies like Toshiba and Mitsubishi. Japanese companies have a strong eye for detail, and their products have good user experience. This allows Japanese companies to have more R&D funding to put up ever better products in the future.
Japan ranks well in 20 key tech areas and has made cutting edge innovations in fields like robotics.
4) France: There are a number of well-known universities in Paris with top ranked graduated programs in business and engineering. France has more than 50 Nobel laureates, and more than 10 Fields Medal winners. France is on the forefront of 20 key scientific fields. While France is not known for scientific innovation like Japan and Germany, the European nation produces innovative and adventurous research.
5) Germany: Germany is known for innovation, especially in terms of machinery. Germany has 70 Nobel prize winners, more than both France and Japan. German universities are well ranked internationally and each has its own specialty.
6) Finland: A small country with just over 5 million people, Finland is in the top ten in 17 out of 20 key scientific fields. Finland is home to well-known tech companies like Nokia. The inventor of Linux is also from Finland.
7) Israel: Israel is on the forefront of military technology. The nation receives military equipment from the United States, but has helped U.S. researchers improve weapons and other military equipment. Israel has the highest level of education in the world: 24 percent of the population has a graduate degree or above.
Israel scientists have made outstanding achievements in the next ten years, especially in the field of chemistry and in electronics. A number of U.S. tech companies have set up R&D centers in Israel.
8) Sweden: Swedgen has many leading world-recognized scientists, and 38 percent of the population works in tech companies (for example, Ericsson). Sweden has an extensive welfare system for all its citizens but its education model encourages competition. Sweden is in the top 10 for 14 out of 20 key scientific and tech fields.
9) Italy: Italy is best known for clothing design and being on the cutting edge of fashion. This reflects the innovative spirit of the Italians. Italy is also home to Agusta-Viktland helicopters, Ferrari, Maserati, Lamborghini, and other high-end sports cars. Italy’s high-end luxury goods are often manufacturing with the most innovative technologies.
10) Canada: Canada is in the top 20 in 16 out of the key scientific fields and is in the top five in the world in four fields. Canada’s MDA produced robotic arms and workstations for the International Space Station.
11 to 19 are ranked as follows: The Netherlands, Denmark, Switzerland, Australia, Norway, Belgium, Russian, Singapore, and South Korea.
Still think Chinese manufacturing is the strongest in the world?
Source: DW News
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Keywords: China high-end manufacturing China service economy
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