Tan Xuguang, Shandong Heavy Industry chairman, said that in order to clearly understand the true meaning of the transformation and upgrading of China's manufacturing industry, we should look at it from a comprehensive view of the global industry value chain, especially if we compare it with developed countries' manufacturing system.
"Judging from the global industry value chain, the upstream of manufacturing industry chain is research and development and high-tech components, which is mostly monopolized by the developed countries in Europe and America. Traditional manufacturing in China is located mainly in the middle of the industrial chain, which includes processing, assembly and other sectors, leaving core technology and core components in the control of others, to earn better profits. However, Chinese companies have begun to accelerate the shift to technology research, development and high-tech products", Tan said.
He added, "Chinese enterprises generally ignored the downstream industry chain. In fact, producer-service industry such as downstream sales and after-market services are in the high-end of the value chain. Taking the restructuring KION Group for example, in its 2011 sales revenue, 42% came from after-sales service, leasing and other producer services, and 53% from sales and other services".
Read the Chinese version:转型升级何处着手？
Source: People's Daily
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