Cao Zhen

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SEVERAL insiders shared their insights and case studies regarding the impact of producer services on China’s manufacturing transformation and upgrading, during the 2023 China Real Economy Development Conference held in Dongguan City, Guangdong Province on Sept. 23.

Luo Zhongwei, a researcher at the Institute of Industrial Economics of CASS and chief economist of the Institute of Service-oriented Manufacturing, said that producer services refer to a sector of the economy that provides specialized services to support manufacturing activities. These services specifically cater to the needs of manufacturers and assist them in optimizing their operations, improving productivity, and enhancing their overall competitiveness.

“The transformation and upgrading of China’s manufacturing industry requires professional guidance and support from producer services to empower it. Therefore, the importance of producer services is strongly emphasized,” he said.

Mingzhi Technology Co. Ltd. in Suzhou, Jiangsu Province, is a manufacturer of core shop equipment and a major supplier of complex aluminum castings. Wu Qinfang, the company’s chairman, said, “We are a manufacturing company, but we want to be service-oriented. We are in the process of making efforts towards this transformation.”

He explained further that in the beginning, manufacturing companies focused on producing products, but recently have been shifting their attention to the entire life cycle of products. “Our company has now hired product design engineers, who have been helping customers design components for castings. Combined with mass production, we have observed that customer loyalty has improved, and our profit margins have increased. So, I think this path is very promising.”

Wu Wanghui, chief value expert of Yonyou’s Intelligent Manufacturing Business Unit, cited Siemens as an example. She said: “In the German company’s fiscal year 2022, its revenue was 72 billion euros (US$76 billion) and its industrial software revenue was 6.5 billion euros, which was a remarkable achievement. As a company develops, it will naturally be driven to transform itself into a service-oriented business. Leading companies will become integrated suppliers of both manufacturing and service, providing overall solutions.”

At the conference, other experts also discussed the current economic situation in China, the key factors in the next industrial layout, the opportunities for China’s manufacturing industry development, and how technological innovation can empower advanced manufacturing.