Germany and China are two of the world’s powerhouses when it comes to manufacturing. They, however, have contrasting renown. They also play crucial roles in leading the way for smart manufacturing particularly the development of industry 4.0. Startups and established entrepreneurs alike have a lot to learn from the manufacturing advancements in these two giant economies.

This Beyond Virtual session was participated by the following resource persons:

Conducted on November 18, this Beyond Virtual panel invited experts in the field of manufacturing and the Industrial Internet of Things to discuss the impact of developments in the Chinese and German manufacturing industries.

Some of the key takeaways from the panel discussion:

  • There are notable differences in manufacturing between Germany and China. Germany has a very technical discussion around product manufacture while China is said to be adopting a practical approach. Technical aspects may not necessarily be the essence of Chinese manufacturing. Instead, what is given more emphasis is the benefit of the technology. As such, Chinese companies are not hesitant to adopt new technologies for as long as they see benefits. They do not spend so much time on the technical aspects but focus on what can be achieved or if it can solve a problem.
  • The Chinese mentality of focusing on the benefits or the potential of something as a solution allows them to make decisions faster. They also become faster adopters of new technologies. In contrast, German companies tend to be meticulous about adopting technologies especially with how they can fit into the company’s established processes and culture.
  • However, German companies with operations in China tend to embrace the more rapid decision-making and technology adoption process observed in the country as long as their German headquarters do not intervene too much.
  • China is one of the most important destinations for German mechanical engineering products, but this may change eventually as China develops new technologies in the higher segments. Germany will continue to be a technology supplier to Chinese manufacturing for a long time.
  • China is a complex market with many who are either skeptical of it or optimistic about achieving success. The market can be viewed in three different perspectives: the government, incentive and policy support, and new market entrant entrepreneur perspectives. These different perspectives will reveal different ways of appreciating the opportunities and anticipating the risks.
  • China’s five-year plan definitely has an impact on how manufacturing in the country progresses and how German companies operating in China or supplying technology to China craft their strategies and plans.
  • There is considerable progress in the robotics field of China, although the country still imports most of the components it uses for its robots from abroad.
  • China has strengths in machine learning, but it has not reached the market leadership level yet. It is still more heavily concentrated on e-commerce and FinTech.
  • China is also advancing on the platform-as-a-service side with many startups and established companies coming up with platform business models.
  • There is a question of whether China is a good starting ground for innovative foreign startups. Only a few have been successful as a foreign company leveraging Chinese talent, innovations, and business culture to shoot up towards success. However, the Chinese government is aggressively trying to attract international investors and talents into the country.

“In China, it’s more of a practical approach. Actually, the technology is not really that important. What’s important is how it can help and what is the benefit of that. Companies (in China) are more willing to adopt technologies here if it solves the problem. This opens the door to really make decisions faster because you do not have so much discussions about the technology.” – Florian Weihard

“So (there is a) very diversified environment in China. I would expect in the near term, most of the technology built in China will stay in China, especially most of the software … In the medium to long term, I think China is going to be competitive in a lot of these areas (robotics, platforms). In the smart factory market, it will take some time for China to become globally competitive.” – Erik Walenza

“I think China is still going to be a very interesting destination for German companies. And I think also for industry 4.0 solution providers, it’s going to be still a very attractive market.” – Daniel Yoo

BEYOND Expo on-site event was held on December 2 to 4, 2021 at the Venetian Macao Convention and Exhibition Centre.

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German Mechanical Engineering Industry Association (VDMA) Shanghai IoT ONE Ruhlamat Automation Technologies Smart Factory Kunshan