Wanted: World’s best com­pa­nies to lift com­pet­i­tive­ness

China Daily (Canada) - - EXPATS - By CE­CILY LIU ce­cily.liu@chi­nadaily.com.cn

The next phase of China’s eco­nomic growth is ex­pected to be driven by ad­vanced man­u­fac­tur­ing, but the in­dus­tries in­volved of­ten re­quire a sig­nif­i­cant de­gree of in­ter­na­tion­al­iza­tion to achieve com­pet­i­tive­ness, said Keith Bur­nett, vicechan­cel­lor at the Univer­sity of Sheffield in Eng­land.

Such in­ter­na­tion­al­iza­tion means China needs to in­cor­po­rate com­pa­nies com­pris­ing the world’s best sup­ply chain into each of its ad­vanced man­u­fac­tur­ing sec­tors. Such a process de­mands that China in­ter­na­tion­al­ize with a co­op­er­a­tive and in­clu­sive mind­set, he said.

“If you look at how China has evolved as an econ­omy, it started with a myr­iad of prod­ucts with the low­est pos­si­ble cap­i­tal equip­ment, and then man­u­fac­tur­ing grad­u­ally moved up the value chain,” Bur­nett said.

“But go­ing into the fu­ture, China needs a big com­po­nent of the econ­omy in ad­vanced man­u­fac­tur­ing with the high­est value like high-speed trains and air­craft, oth­er­wise you’d be buy­ing these from other coun­tries while mak­ing lower value-added prod­ucts.”

Bur­nett be­came the vicechan­cel­lor at the univer­sity in 2007. He is also a lead­ing fig­ure in the United King­dom’s science field, be­ing a mem­ber of the Coun­cil of Science and Tech­nol­ogy, and was awarded a knight­hood in 2013 for his ser­vices to science and higher ed­u­ca­tion.

Hav­ing dis­cov­ered an in­ter­est in China dur­ing his first visit 10 years ago, Bur­nett has since vis­ited the coun­try many times and has learned to speak some Man­darin.

But his work has made his con­nec­tions with China even closer, es­pe­cially through his in­volve­ment with the Nu­clear Ad­vanced Man­u­fac­tur­ing Re­search Cen­ter.

The nu­clear sec­tor is per­haps one key ex­am­ple of how Bur­nett imag­ines China should in­ter­na­tion­al­ize its ad­vanced man­u­fac­tur­ing in­dus­try for global ex­port. Other in­dus­tries that China could in­ter­na­tion­al­ize in the same way in­clude the high-speed trains and aerospace in­dus­tries.

“The rea­son it makes sense to in­ter­na­tion­al­ize these in­dus­tries is that many of the com­plex re­quire­ments of these prod­ucts are global, so aerospace is a clas­sic ex­am­ple be­cause the air­craft need to com­ply with reg­u­la­tions glob­ally,” he said.

In the process of in­ter­na­tion­al­iza­tion, Chi­nese com­pa­nies would gain ex­ten­sive un­der­stand­ing of in­ter­na­tional mar­kets, and at this stage it would make sense to con­tract some com­po­nent work to lead­ing in­ter­na­tional firms, or lo­cate their re­search and de­vel­op­ment cen­ters for cer­tain as­pects in another coun­try that has the ex­pe­ri­ence and the hu­man re­sources to do it, he said.

“In an open econ­omy, if you don’t have the best prod­ucts, you won’t sell, and mak­ing the best prod­ucts means to have the best in­dus­try ex­per­tise be­ing put into your sup­ply chain.”

In­evitably, China will need to share ideas with part­ners in­ter­na­tion­ally and share prof­its with them, too. “In­ter­na­tion­al­iz­ing means you will lose some ideas to peo­ple, but it will al­low you to grow faster,” he said.

This is the road China is al­ready tak­ing. Bur­nett said in­ter­na­tion­al­iz­ing re­quires an in­clu­sive at­ti­tude, es­pe­cially given that many Chi­nese com­pa­nies are seek­ing help and ad­vice from over­seas part­ners. “It won’t work if you say to in­ter­na­tional part­ners, ‘ We want to in­ter­na­tion­al­ize and take away your busi­ness.’ But you’ll get a lot of sup­port by say­ing, ‘If we work to­gether we can make things the world wants to buy.’”

If China takes this at­ti­tude, it will have an ac­cel­er­ated pace of de­vel­op­ment and quickly gen­er­ate lessons ap­pli­ca­ble for many ad­vanced economies in the world, he said. The is­sues China en­coun­ters dur­ing its de­vel­op­ment will mo­ti­vate the coun­try to de­velop new ideas.

Bur­nett, born in 1953 in the Rhondda Val­ley in Wales, stud­ied physics at the Univer­sity of Ox­ford. He held aca­demic po­si­tions in physics at the Univer­sity of Colorado, Im­pe­rial Col­lege and Ox­ford be­fore join­ing the Univer­sity of Sheffield.

He went to China for the first time around 10 years ago, ac­com­pa­ny­ing a scholar from Ox­ford who is an ex­pert in Chi­nese bronzes and was look­ing for ma­te­rial for an art pro­ject.

“I was en­tranced by this great, won­der­ful coun­try. I started learn­ing a bit of Man­darin. It’s not very good, but I re­ally love it. I also have Chi­nese fam­ily as my daugh­terin-law is Chi­nese,” he said.

Bur­nett said he thinks China should con­sider its cur­rent chal­lenges as op­por­tu­ni­ties to de­velop pi­o­neer­ing so­lu­tions, as op­posed to hav­ing to catch­ing up with the West as its ul­ti­mate goal.

“I’d love to see China fo­cus on some of the big prob­lems fac­ing the world. We could have a set of new eco­nomic de­vel­op­ment ideas or en­vi­ron­men­tal so­lu­tion ideas China de­vel­ops which could pro­vide in­spi­ra­tions for the world,” Bur­nett said.

“China can­not just re­peat what the West has gone through. It would be a shame if one has gone through all the suf­fer­ing and sac­ri­fice to build a mod­ern China, and it’s all just for a copy of Western con­sumer so­ci­ety, which is at­trac­tive but fun­da­men­tally flawed.

“I sup­pose I re­ally don’t like the thought that China just repli­cates a Western life. That’s not how it should be. That’s not how the world should sur­vive,” he said.

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