China plans ‘enormous’ investment in 15 innovation centres to take manufacturing sector to next level

China’s central government plans to establish a network of manufacturing innovation centres nationwide that official bodies and private companies can co-invest in to upgrade the country’s manufacturing sector, said government official.

“The government will collaborate with the private sector and they will both share the spoils,” said Li Beiguang, deputy director general of the department of planning, which operates under the Ministry of Industry and Information Technology.

“The amount of investment will be enormous,” he told the South China Morning Post on the sidelines of the APAC Innovation Summit at Hong Kong Science Park on Thursday.

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Li said the government will create new “heavyweight” companies to handle capital-intensive technologies like semiconductors. Some will be developed from existing state-run enterprises, others will be joint ventures with the private sector, he added.

These moves are part of an initiative dubbed China Manufacturing 2025 that is aimed at transforming China’s manufacturing sector from a low-end mass production industry to a more profitable model harnessing technologies such as artificial intelligence and the Internet of Things.

According to the plan, there will be 15 such innovation centres by 2020 and double this after another five years.

This comes at a time when the country is facing an economic slowdown and rising labour costs that are driving factory jobs to other emerging countries like Thailand and India.