context: MIIT is pushing for automation and the industrial internet to mitigate the impact of demographic trends on China’s labour cost and global competitiveness. But many firms are put off by high installation costs and unclear short-term benefits.

In the provincial government work report Yuan Jiajun 袁家军 Zhejiang governor called for fully supporting the ‘Xinchang model of sci-tech innovation’, reports Guangming Daily. Xinchang district successfully promotes automation and cloud computing among its 800 firms, of which only 48 are large by official standards, says the report. In an earlier report, Science and Technology Daily explains that the ‘Xinchang model’ addresses challenges for SMEs in

  • transforming by themselves
  • continuing upgrades
  • directing firms towards smart manufacturing
  • managing production facilities
  • finding a trustworthy partner for outsourcing
  • collaborating with multiple partners and stakeholders

25 factories were digitalised as of end 2018, using 700 robots in total, reports Guangming Daily. On average, these firms reduced costs by 12 percent, use 50 percent fewer workers and boast improved efficiency and production speed. Skilled labour is key, says Chen Yuan 陈远 Xinchang Sci-Tech Bureau vice director, noting sci-tech workers get the best buildings and highest pay.

Both articles quote Qu Xianming 屈贤明 Chinese Academy of Engineering Manufacturing Policy Office director saying it is hard to get SMEs onto the cloud. They make up 97.4 percent of domestic firms, but as of end 2017 only 39 percent of them hooked their machines up to the internet, says Qu.