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back to index backCHINAtalk April,  2017


Competing with the Chinese Factory of 2017

Deep manufacturing expertise and extensive supply chains give China a lead that will be tough to overcome.

During his presidential campaign and since moving to the Oval Office, Donald Trump has spoken a lot about manufacturing in the U.S. and its competition with China. Now that China is the hub of so many technologies, from cell phones to drones and solar panels, how do U.S. factories compare?

Harvard Business School professor Willy Shih has visited China many times over the course of a long career in business and teaching, and in January he returned from touring the country's manufacturing center with a group of students. He spoke to MIT Technology Review about what he saw.

The following excerpts of that interview have been edited and condensed for clarity. Insider Premium subscribers can listen to the full interview here.

What stands out to you about Chinese manufacturing today?

Complex interdependencies. A smartphone typically has 2,000 components, and some of them are large"like the LCD touch screen"and a lot of them are much smaller, from tiny machine screws to capacitors to all kinds of discrete components that might go on the circuit board. The primary assembler of a product might have a number of suppliers who supply primary components, but then each one of those suppliers in turn has a next tier of suppliers, and sometimes a third and sometimes a fourth, and all of these suppliers provide components on relatively short notice. I think the strength of manufacturing in China is the density of suppliers and the ability to draw on them.

Many people are probably familiar with traditional Chinese markets where you can find clothing and toys and all kinds of other things. Well, the electronics market in Shenzen is really rather unique. You go there and you find many, many little shops who specialize in surface mount components for electronics. And it's not like any market I've seen anywhere else in the world, because it's really an industrial goods market. But what it does is it highlights the number of small shops who can do a quick turnaround. The strength of the supplier infrastructure providing all these assorted components that go into these products is actually quite, quite striking.

Are you seeing more automation? Are Chinese firms moving toward a Western factory model?

To read entire article, please click here.

Source: MIT Technology Review - GAI



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