CGTN Europe spoke to Isabel Hilton, founder of China Dialogue, about the "Made in China" concept and how country's manufacturing has changed over the years.
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00:00For more on Made in China, let's talk to Isabel Hilton, founder of China Dialogue.
00:05Isabel, welcome back to the programme.
00:06How would you describe the evolution of China's manufacturing over the past decades?
00:12Oh gosh, well you've seen it go from the kind of low added value, low wage manufacturing
00:19that is fairly characteristic of the first stage of a kind of catch-up industrialisation
00:24which China went through from the sort of 80s and the 90s.
00:28And then when you get to the point where China joins the WTO, so 2002, there's a lot of inward investment,
00:38there's a lot of joint venturing and China begins to take off.
00:43It begins to take off in moving up the value chain, moving up the technology chain
00:48and then the final frontier, if you like, which is innovation.
00:52So China has been very good at innovating in process and we're just beginning to see the breakthroughs in innovations and technologies.
01:02So Chinese factories now are extraordinarily well organised, they're extremely efficient.
01:09They do, sometimes, you know, foreigners do complain and other countries do complain that they enjoy privileges from the government
01:16in the way of cheap land and cheap credit and there's some truth to that.
01:20But less often discussed is the absolutely ferocious competition that goes on.
01:25So there is an absolutely, when an industry gets to a certain level of maturity,
01:29and you're seeing it now, for example, in electric vehicles,
01:32there is ferocious competition and price struggling and only the fittest survive.
01:37So those that do survive are really among the best in the world.
01:40And I wonder, Isabel, if you could explain this concept of a lighthouse factory
01:45and what could be said about their growth in China.
01:49A lighthouse factory, it's an idea that comes from McKinsey and the World Economic Forum.
01:54And it's a factory that embodies the qualities of what they call the fourth industrial revolution.
02:01And that's the industrial revolution which brings together advanced technologies of various kinds
02:06for, you know, to get a bigger bang for your buck.
02:09So it might be bringing together AI, cloud computing and robots, you know.
02:17And China has, again, pretty much been on the front line of this.
02:24So if you look back to 2020, for example, China had six globally recognized lighthouse factories.
02:34And now it's got around 45.
02:37That's about a third of the world's total.
02:39And that's in five years.
02:41So, you know, China is very much at the forefront of industrial innovation at this point.
02:47And you touched on how well organized China's factories are.
02:50And China's labor market is known for its discipline, its efficiency.
02:54Do you think other countries can match China's manufacturing output prowess if needs be?
02:59Well, certainly not overnight.
03:02I mean, you mentioned the labor force and certainly the labor force, again, is very highly disciplined.
03:09They work longer hours than the global average, too.
03:12So they're pretty hard working.
03:14The industrial labor force is not the majority of the labor force in China.
03:20And you're getting a kind of bifurcation between the industrial labor force, which is increasingly highly skilled,
03:26and casual labor, the gig economy, agricultural labor.
03:30So, you know, there are big differences in labor conditions in China.
03:36But you can't just pick up a factory and plonk it down in another country, in another culture,
03:43and have the level of skill that modern factories demand.
03:47And that has been – it's been a problem, actually, because there have been some efforts.
03:52You know, there's quite a lot more effort to reshore, a bit of decoupling that's gone on in the last five or six years.
03:59And the labor force has always been the problem.
04:02You know, if you move a factory from Asia to the United States, for example,
04:06you come across very entrenched privileges.
04:12So holidays, weekends, you know, working hours, that kind of thing, which, you know,
04:18China has less respect for, shall we say.
04:22So that's often a problem.
04:25I mean, I do expect the labor force in China to change because it's getting older and, you know, it's getting less numerous.
04:31So I think the factory of the future, there will be more robots than people.
04:35As ever, really great to get your reflections.
04:38We appreciate it.
04:39Isabel Hilton, founder of China Dialogue, thank you.