China's manufacturing IoT spending to hit 128 bln USD by 2020: IDC

Chinese manufacturing enterprises' spending on the Internet of Things (IoT) is expected to grow by an annual average rate of 14.7 percent and hit 127.5 billion U.S. dollars by 2020, a report showed Thursday.

"During the process, software and services will lead the way for fast growth with a combined market share of over 60 percent," according to the report by research firm International Data Corp. (IDC).

IoT is a strategic emerging industry in China, and was included in the 13th Five-year Development Plan. "Made in China 2025" is a 10-year action plan that aims to build China into a manufacturing powerhouse.

Promoting smart manufacturing -- raising the level of networked, collaborative manufacturing and expediting the manufacturing industry's transformation into services -- is the way forward for the industry, said the IDC report.

"Many Chinese manufacturers have started to implement an IoT strategy to improve production, efficiency and evolve their business models," said Wang Yue, senior research manager at IDC China.

With the promotion of smart manufacturing, the fast integration of information technology and operational technology (OT), and the prevalence of the "digital twin" concept, there is plenty of room for development in the manufacturing industry, according to Wang.

In the next two years, three major trends will lead IoT development in China's manufacturing industry -- IoT platform competition will intensify, manufacturing IoT applications will accelerate innovation, while edge computing will become the next area to be expanded, IDC forecast.

IoT will see tangible objects connected to the Internet, allowing them to interact with other devices.

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Chip sector to get US$100b infusion : Report

CHINA aims to invest US$100 billion in its semiconductor industry over the next few years to meet surging domestic demand and also as part of its technology upgrading efforts, research firm Bain said yesterday.

By 2020, about 55 percent of the world’s memory, logic and analog chips are destined to flow to (or through) China. The country now only produces about 15 percent of these chips, up from about 10 percent a few years ago. But the higher production still marks a long way from closing the widening gap between supply and demand, according to Bain.

Bain also predicts that electric cars and new energy projects like smart grid are likely to fuel a rising amount of highly-advanced and next-generation chips.

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Five made-in-China hi-tech breakthroughs

Chinese leaders are resolved that the best way forward for the country is "innovation" -- modernizing industries and creating technological marvels that China can call its own. With this belief, China has achieved momentous progress in science and technology in recent years. Thanks to high-speed rail, long distances can not keep friends, family or business partners apart, as 1,000 miles can be covered in a day. The sky is no longer the limit, as China has sent manned flights into space.

The following are the most revolutionary hi-tech achievements that Chinese has made lately.

High-speed rail: China's business card abroad

A CRH train that runs on the Beijing-Shanghai High-Speed Railway leaves Tianjin South Railway Station in North China's Tianjin, June 30, 2012. [PhotoXinhua]

No sector better symbolizes China's shift from a nation of labor-intensive manufacturing to one that excels in sophisticated technology than high-speed rail.

Just a few years ago, high-speed rail was a new concept to the Chinese. Now, China boasts the world's biggest high-speed railway network. By the end of 2015, its total operating length had reached 19,000 km, accounting for more than half of that across the world.

After years of technological upgrades and innovation, China has lifted its high-speed railway technology to the most advanced level, which has the advantages of low cost, quick delivery and acknowledged reliability.

A lot of Chinese high-speed rail expertise and equipment has also been exported, generating huge economic efficiency in many parts of the world. For example, in Africa, China-built train lines are increasingly becoming the backbone of the local public transport system and a key component of growth in a number of countries, including Nigeria and Ethiopia.

Chinese Overseas Spending Ranks First in the World

Tourists on Phuket Island, Thailand, enjoy unspoiled scenery. 

 

The latest data released by the World Tourism Organization (WTO) shows that China's revenue from international tourism in 2015 amounted to $11.4 billion, taking Spain's former ranking as second in the world. The US remains first with $17.8 billion.

 

As for spending and visits to overseas countries, China ranks first in the world, according to Xinhua News Agency.

The spending of Chinese tourists abroad witnessed a year-on-year increase of 25 percent, reaching $292 billion, followed by the US ($120 billion), Germany ($76 billion) and the UK ($63billion). The number of Chinese people traveling abroad grew 10 percent overall and totaled 128 million, the data showed.

 

Global revenue from tourism in 2015 rose 3.6 percent, amounting to $1.4 trillion with an average daily spending of $4 billion per day. The number of international tourists increased 4.4 percent to reach 1.2 trillion.

 

The growth rate of tourism worldwide has exceeded that of merchandise trade for four consecutive years. The tourism industry accounted for 7 percent of world exports and 30 percentof exported services in 2015.

German firms upbeat on Chinese market growth: report

BEIJING - German firms in China are still optimistic about their local sales growth despite theeconomic slowdown, a report showed Tuesday.

About 90 percent of the surveyed 189 German firms, based in China, planned to continuebusiness in China despite the economy seeing the weakest quarter-on-quarter expansion inthe first quarter since 2011, according to the report released by the German Chamber ofCommerce in China.

Over one third of the surveyed German firms have taken steps such as rolling out newproducts and services to adapt to market changes, the report showed.

Meanwhile, most German firms look forward to the opportunities brought about by China'sdevelopment plan for the next five years. Over half of the surveyed firms regard China'sgrowing sales market to be their biggest opportunity as more Chinese firms upgrade theirsystems and equipment.

"One important area of business we see from the 13th Five-Year Plan is the focus oninnovation -- this carries the potential for ample Sino-German business cooperation," saidAlexandra Voss, North China executive director with the German Chamber of Commerce inChina.

China is Germany's largest trade partner outside Europe. There are more than 5,000 Germancompanies in China. Sentiment is high among the firms as they have been encouraged byChina's efforts in the areas of environmental protection and innovation, according to thereport.

They also expected more agreeable market environment thanks to continuous opening upand easier market access, the report said.

Why China's bid to promote domestic brands will fail

China's drive to combat pollution is helping homegrown carmakers, which are boosting sales at the expense of Western brands.

But General Motors and Volkswagen -- the top-selling brands in China -- shouldn't worry: Changan and Great Wall won't topple them.

In October, China cut taxes on cars with engines of less than 1.6 liters to 5 percent of the purchase price, down from 10 percent. The tax cut reversed a decline in overall car sales and buoyed demand for domestic brands. Eighty to 85 percent of vehicles produced by local carmakers qualify for the tax break, according to Bloomberg Intelligence analyst Steve Man.

By January, Chinese domestic brands had a 41 percent share of car sales in China, up from about 38 percent a year earlier, according to data from Bloomberg Intelligence and the China Automotive Information Network.

China's auto sales had been falling until last summer as the economy slowed and the government's anti-corruption campaign ate into demand for ostentatious vehicles.

The tax cut raise passenger vehicle sales to 21.1 million units last year, up 7.3 percent from 2014. Car sales continued their rebound this year. In January and February, China sales totaled 3.61 million units, up 5.1 percent from a year earlier, according to the China Association of Automobile Manufacturers.

In addition to the October tax cut, local and national government subsidies for electric car producers can reduce a vehicle's purchase price by 50 percent or more.

The incentives have helped local brands to find a market for their electric cars. Last year, EVs accounted for 2.5 percent of cars sold in China last year, more than doubling EV sales in 2014.

But China's carmakers shouldn't get too comfortable. There are two reasons why Chinese carmakers may find their days in the spotlight cut short.

Conventional hybrids, the more pragmatic option for EV fans, are coming. The cities of Guangzhou and Tianjin are allowing foreign ventures to make them and Hyundai Motor Co. plans to launch sales this year, according to BI's Man. 
While growing fast, demand for electric vehicles has been restricted by a lack of charging stations, a problem that doesn't affect hybrids.

Secondly, the tax cut will be temporary. China last lowered the levy in 2009, briefly boosting the share of local brands before restoring the tax to 10 percent.

This time, the 50 percent reduction expires in December, barring a government extension. China's carmakers may be feeling a sense of deja vu.