In­no­va­tive firms in Ningbo nav­i­gate the choppy wa­ters of the trade war

Global Times US Edition - - BIZIN -

Ningbo, a coastal city in eastern Zhe­jiang Prov­ince, has come un­der the spot­light for host­ing a clus­ter of man­u­fac­tur­ing firms that can skill­fully nav­i­gate the on­go­ing trade fight with the US.

Each grasp­ing cut­ting-edge tech­nol­ogy in the pro­duc­tion of key ba­sic ma­te­ri­als and core com­po­nents, these com­pa­nies have per­se­vered in mak­ing tech­ni­cal in­no­va­tions, stay­ing fo­cused on their primary busi­ness and aim­ing to be glob­ally com­pet­i­tive from the first day they were es­tab­lished.

Known as “cham­pion en­ter­prises” for hav­ing won first prizes in na­tional man­u­fac­tur­ing tech­nol­ogy con­tests run by the Min­istry of In­dus­try and In­for­ma­tion Tech­nol­ogy, the 28 man­u­fac­tur­ing firms stand out for hav­ing re­tained ei­ther strong pric­ing power or steady mar­ket share de­spite the wors­en­ing global trade en­vi­ron­ment harmed by the tar­iff hikes of the US gov­ern­ment.

Cur­rently, nearly 60 per­cent see their primary prod­ucts hold­ing the big­gest mar­ket share across the world and nearly 93 per­cent rank among the top firms on the do­mes­tic stage.

Tong Honggen, deputy di­rec­tor of the Ningbo Mu­nic­i­pal Bureau of Econ­omy and In­for­ma­tion Tech­nol­ogy, called these com­pa­nies “the back­bone of ‘Made in China’ and an im­por­tant car­rier of core com­pet­i­tive­ness.”

“With an ever-ex­pand­ing pres­ence, China will be able to has­ten its trans­for­ma­tion to­ward be­ing an in­no­va­tive man­u­fac­turer of qual­ity,” he said.

Ker­nel of man­u­fac­tur­ing

If the on­go­ing trade war with the US has taught China any­thing, it is the ris­ing sig­nif­i­cance of tech­ni­cal prow­ess.

In Ningbo, in­no­va­tion has long been viewed as the soul of man­u­fac­tur­ing.

For many years, lo­cal busi­ness cir­cles have taken an al­ter­na­tive ap­proach to their op­er­a­tion: man­u­fac­tur­ers com­pete not for higher out­put and pro­duc­tion value but hav­ing more re­search and devel­op­ment per­son­nel and spend­ing more of their sales rev­enue on R&D.

Of­fi­cial sta­tis­tics show that about 90 per­cent of the city’s cor­po­rate R&D ex­penses come from pri­vate firms. About 95 per­cent of tech­ni­cal cen­ters above the city level are es­tab­lished in the city’s pri­vate firms. Lo­cal pri­vate firms own 82 per­cent of the city’s patents for in­ven­tions.

Op­ti­cal re­flec­tive film is essen­tial for flat panel dis­play, but its pro­duc­tion tech­nol­ogy has long been mo­nop­o­lized by for­eign coun­tries. The game-changer did not ap­pear un­til nine years ago when So­lartron Tech­nol­ogy was es­tab­lished in Ningbo with a goal to break the for­eign monopoly.

“Many peo­ple thought we were kid­ding. How could a startup dare to com­pete with for­eign heavy­weights? But our ob­jec­tive is to break down the bar­ri­ers of tech­no­log­i­cal monopoly,” said com­pany chair­man Jin Yadong.

The com­pany now is an in­dus­trial leader and has solid col­lab­o­ra­tion with es­tab­lished firms such as BOE Tech­nol­ogy Group and Fox­conn.

Like­wise, with­out its en­dur­ing com­mit­ment to in­no­va­tion, Ningbo Cix­ing could never have evolved into a ma­jor global sup­plier of in­tel­li­gent knit­ting ma­chin­ery with the high­est an­nual out­put and sales across the world.

How long does it take to knit a gar­ment? With the sig­na­ture prod­uct of Cix­ing, a com­put­er­ized flat knit­ting ma­chine, the an­swer is 45 min­utes.

To im­prove this ef­fi­ciency, how­ever, com­pany pres­i­dent Sun Ping­fan said he had used 15 years of hard-earned sav­ings to buy the ma­chine and make tech­ni­cal break­throughs.

Rid­ing the waves

Over 1,200 years ago, Ningbo was at the fore­front of the an­cient mar­itime Silk Road. Now it has rein­vented it­self to be­come a gate­way of China’s for­eign trade thanks to its ris­ing man­u­fac­tur­ing strength.

With 120,000 pri­vate firms, in­clud­ing more than 20,000 ex­port and im­port firms, Ningbo has trade ties with over 220 coun­tries and re­gions and posts the world’s high­est an­nual sales in more than 160 kinds of prod­ucts.

As the Us-pro­voked trade war against China is harm­ing busi­ness sen­ti­ment and slow­ing down the global econ­omy, Ningbo is mak­ing ef­forts to buck the trade head­winds and hold its own.

No­table re­sults have been se­cured so far. For in­stance, at the first China-cen­tral and Eastern Euro­pean Coun­tries Expo which opened in Ningbo on June 8, 16 for­eign­in­vested projects worth 33.59 bil­lion yuan ($4.77 bil­lion) were clinched in­volv­ing smart man­u­fac­tur­ing, new en­ergy, new ma­te­rial and other sec­tors.

Re­gard­ing man­u­fac­tur­ing as be­ing the ad­van­tages and foun­da­tion for devel­op­ment of an econ­omy, a city of­fi­cial said no mat­ter how the ex­ter­nal sit­u­a­tions change, it is nec­es­sary for the city to main­tain strate­gic fo­cus and han­dle its own af­fairs well.

The city gov­ern­ment of Ningbo knows it can­not sit idly by. One help­ing hand it of­fers is to boost ad­min­is­tra­tive re­form to cut red tape, op­ti­mize the busi­ness en­vi­ron­ment and ease cor­po­rate bur­dens as the cen­tral gov­ern­ment has re­quired.

In 2018 alone, lo­cal com­pa­nies saw their tax bur­den eased by a to­tal of 86.23 bil­lion yuan. The sav­ings in taxes and fees can be plowed back into R&D and achiev­ing tech­ni­cal up­grad­ing.

Zhang Jingzhang, chair­man of the board of Haitian In­ter­na­tional, the world’s lead­ing man­u­fac­turer of in­jec­tion mold­ing ma­chines, rou­tinely stud­ies the eco­nomic sit­u­a­tion and of­fers reg­u­lar train­ing to his em­ploy­ees.

Since last June, Zhang has be­gun to feel the changes in the global mar­ket. By last Septem­ber, mar­ket or­ders started to drop.

But this chal­lenge is “noth­ing stormy at all” for the 83-year-old. “We have run our busi­ness for 50 years and over­come a lot of tur­bu­lent times,” he said.

“Stay fo­cused, im­prove our strength and make more in­no­va­tions. Next we will ex­port more to Africa, South Amer­ica and con­tinue to run fac­to­ries in Mexico, Viet­nam and Rus­sia,” Zhang said when giv­ing in­struc­tions to his em­ploy­ees.

Photo: Xinhua/xu Yu

A pro­duc­tion line at Ningbo Cix­ing Co is work­ing in Ningbo, East China’s Zhe­jiang Prov­ince, June 13, 2019.

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