Sino-German cooperation in digital integration and advanced manufacturing
- By Heiko Khoo
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E-mail China.org.cn, May 31, 2016
Sino-German agreements that seek to interlink Germany's "Industry 4.0" strategy with China's "Made in China 2025" initiative were signed earlier this year. German and Chinese firms will cooperate in the field of intelligent manufacturing and the digital networking of production processes and develop collaboration on standards, security and intellectual property.
Germany and China are both manufacturing and export powerhouses. German industry is at the cutting edge of technology and the development of digital innovation. Some 15 percent of its companies are strongly focused on digital technology. By comparison, China's manufacturing industry remains relatively backward. So, its 2025 development plan aims to move production processes up the value chain and this requires the application of revolutionary manufacturing technologies. The 2025 plan involves state-led investment in 10 key industries including robotics, information technology, aerospace, railways and electric vehicles, and China will establish 15 manufacturing innovation centers by 2020, and 40 by 2025.
INFOGRAPHIC: Made in China 2025
The scope of German scientific and technical cooperation with China is immense, particularly because China's strategy focuses on applying automation and robotics to production processes. However, there are those in Germany who believe the U.S. is a more suitable partner, as intellectual property is better protected there, and their economies have greater synergy in their digital-manufacturing balance. The U.S. leads the world in digital creativity, whereas China is a manufacturing competitor with Germany.
Sluggish economic growth in Europe and Germany also inspired recent protests to defend the German steel industry, which took on a nationalist tone. Sadly, the leadership of the IG Metal union collaborated with a number of government representatives and employers to attack Chinese steel exports to Germany. The hullaballoo against China's exports and overseas investments is completely unjustified. A glance at comparative investment figures reveals that German investment into China totals over €60 billion compared to about €7 billion worth of Chinese investments into Germany.
German business interest in China is connected to the vast potential for the application of technology based on the so-called "internet of things." The internet of things interconnects people, objects and machines. China's urban environments and people can be welded into an organic whole by these means. This technology lies at the core of Germany's Industry 4.0 policy. It is expected to become the driving force of a new technical revolution and its applications are almost universal. For example, if cars driven by people communicate with other vehicles and the physical environment, they can function in a "smart" way. They can avert collisions by informing other cars of danger, or they can generate messages to alert emergency services in the event of an accident. The applications of these technologies will be ubiquitous and unexpected and will radically change our relationship with people, objects and machines.
The universal applicability of these added-on services and the complexity of their interconnections, make integrative and collaborative operational ecosystems essential. Users will require functionality that is useful and simple.
At present, the main areas of application are industry, mobility, energy, smart homes and smart cities. The German government's Industry 4.0 initiative revolves around advancing technology and intercommunication in production processes. It aims to make manufacturing processes more efficient and this affects the products that are produced. In energy production and consumption, big efficiency savings are expected. For example, at present the average person in Beijing consumes 25 percent of the energy of an average New Yorker. This low consumption level in Beijing can be sustained, or even reduced, by smart energy utilization that adjusts consumption to meet individualized, real-time demands. This can greatly reduce waste.
However, there are dilemmas that stem from the private ownership of digital tools, ideas and innovation. On the one hand, as private companies seek to maximize profits, they focus on the return on investment to their company. On the other hand, the universal nature of such technologies will affect human social relations and interactions in ways that require private interests to be subordinate to the interests of society. The state-driven development of innovation capabilities is often slated for its lack of dynamism, as it is connected to bureaucratic decision-making with top-down features. However, where new technologies are essential to humanity, the contrast between private and public interests comes to the fore in the most dramatic way.
Perhaps the most glaring example in recent decades is the development of anti-retroviral drugs that prevent HIV from developing into AIDS. They were first approved in 1997, yet the private profit motives of GlaxoSmithKline, the pharmaceutical giant, dictated that the drugs were unaffordable for millions of sufferers in poor countries. Even today, 73 percent of HIV carriers, roughly 25 million people, remain untreated. Most of them will die because of this. As a result, China's focus on state-led technological innovation is not simply important to kick-start investment, it is also essential to apply these technologies in ways that serve the good of the people.
The objective of the Chinese Communist Party is to become the world's leading industrial power by 2049, the 100th anniversary of the Chinese revolution. If China reaches this level, the Communist objective, to create a society organized around the administration of things, rather than people, will be within reach.
Heiko Khoo is a columnist with China.org.cn. For more information please visit: http://china.org.cn/opinion/heikokhoo.htm
Opinion articles reflect the views of their authors, not necessarily those of China.org.cn.
