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Expert says automation will spin long-term gains

Updated: May 14, 2018 China Daily Print


Automobile plant staff assemble an engine at a factory in Weifang, Shandong province. Charles-Edouard Bouee said he believes the automotive industry will be among those whose business model will change due to AI. [Photo by Wang Jilin/For China Daily]

Roland Berger CEO sees rapid growth of several industries, emerging fields

Industrial automation on the back of the Made in China 2025 strategy will generate huge growth momentum for businesses such as industrial electronics, semiconductors, data analysis and telecommunications in the long run, said the head of a global consulting firm.

Charles-Edouard Bouee, CEO of Roland Berger Strategy Consultants, a Germany-headquartered company, said many opportunities come from the country's ongoing policy reform, the fast-growing artificial intelligence or AI field and 5G technology.

"It's worth differentiating between two major trends in the Chinese economy. China sets out improving and upgrading industries to a high degree, and the economy is developing an increasingly changing complex business environment on the onset of disruptive innovation," said Bouee, whose firm employs 2,400 staff in 34 countries and regions.

Given the tremendous investment in research and development by the Chinese government, the emerging industries like biotech, life sciences, imaging, new material, semiconductors and 5G telecommunication technology are likely to experience high growth, he said.

China will completely open up its general manufacturing sector, and access to sectors such as high-tech industrial products, telecommunications, medical services, education, elderly care; and new energy vehicles will be expanded, according to the annual government plan announced in March.

Policies that support the Made in China 2025 strategy are applicable to all kinds of businesses, and domestic and foreign-funded companies are treated equally, under the government plan.

Bouee said production safety and environment protection have been identified as two key industries that are in need of improvement. Therefore, there are opportunities in each industry for professional suppliers of safe production solutions and environment protection, he said.

"Of course, the oil and gas, mining, refinery, chemical, pipeline, energy and utility industries are of particular interest. Overall, technology and service providers will find huge market opportunities."

Agreed Tu Xinquan, director of the China Institute for WTO Studies at the University of International Business and Economics in Beijing. "The Made in China 2025 strategy brings equal opportunities to foreign and domestic companies and will strengthen the role of the market."

As high-tech products like industrial chips or automobile engines are critical to a country's industrial development, Tu said China will deploy more resources to boost core manufacturing innovation activities such as intelligent manufacturing, green manufacturing and high-end equipment innovation projects.

Bouee said he believes AI will emerge as a leading industry, and will greatly improve consumer electronics and data analytics. Ultimately, AI will change business models in telecommunication, media, financial, retail, transportation, insurance, consumer goods, automotive and education sectors, he said.

"The telecommunication industry is transforming from 4G to 5G technology, largely supported by the Chinese government, and brings opportunities to the semiconductor industry too. But it should be combined with other technologies, which will be decisive in the AI era," said Bouee.

To further compete with its global rivals, the Ministry of Industry and Information Technology announced earlier this year that China will set up a Made in China 2025 National Demonstration Zone, nurture several world-class advanced manufacturing industry clusters and promote integrated development of the manufacturing sector and internet.

A group of key landmark programs and projects have already been launched or notably developed across the country.

In priority areas such as large passenger aircraft, integrated circuits, new material, aircraft engines, gas turbines, 5G and new energy vehicles, encouraging results have already been achieved, according to government documents.

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