Upgrading already in progress

While critics of China’s “low-quality” products keep talking, there are Chinese firms that are marching up the manufacturing value chain. A hybrid solar photovoltaic equipment manufacturer in Jiangsu Province is an example of this trend.

Formed in the early 1990s as a Sino-german joint venture, the firm sought to outsource German production costs to China. Inside their plant, European equipment lay everywhere. Asked why the factory owners felt the need to import equipment like ladle cranes when Chinese cranes were already on par with international standards, they said it was the “old” plant.

A few yards away, at a visibly newer plant, much of the equipment was Chinese - including the ladle cranes. However, most of the advanced hi-tech equipment for manufacturing silicon wafers was still imported from Germany. Nonetheless, the transition Chinese firms have made on other types of heavy equipment in two decades is astonishing.

At the Jiangsu factory, there are always two types of products: the “German” brand and the “Chinese” brand. But both the products are manufactured in the same factory, using the same process and materials, and by the same engineers. However, in the end they are divided into those that would bear the German logo and those that would bear the Chinese logo.

Tiepai, which in Chinese literally means sticking on a logo, is original equipment manufacturing where a factory usually manufactures products for different brands. In the Jiangsu factory, Western companies are in the process of tiepai-ing high-quality Chinese goods for export worldwide. In fact, simply tiepai-ing Western brands would increase the price of a product several fold.