Up­grad­ing al­ready in progress

ChinAfrica - - Africa Report -

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.

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