Chinese tech giants form alliance to help advance industrial internet initiatives in the country
- The Shenzhen Industrial Internet Union aims to help drive the development of new technologies for the industrial internet era
Some of China’s largest hi-tech companies, including Huawei Technologies and Tencent Holdings, have teamed up in a quest to accelerate initiatives related to the industrial internet, as the world’s second-biggest economy remains locked in a heated tech and trade dispute with the United States.
These firms have recently established the Shenzhen Industrial Internet Union, which aims to help drive the development of new technologies and business models for the industrial internet era in the southern coastal city that is often called China’s Silicon Valley.
The industrial internet involves the broader adoption of advanced consumer and industrial applications that take advantage of next-generation wireless networks, big data, AI and the Internet of Things (IoT) for business purposes. This is in line with China’s wider ambitions to lift its industries up the value chain and better compete globally in emerging technologies, dubbed as the Fourth Industrial Revolution.
“Industrial internet development is a national strategy that requires the cooperation of different parties,” said Wang Lixin, Shenzhen’s vice-mayor, on Tuesday at an industry conference held in the city where the new alliance was announced.
Telecommunications network operator China Unicom and Taiwanese firm Hon Hai Precision Industry, the world’s largest electronics contract manufacturer, are among the more than 10 companies that have initially joined the government-backed union.
The formation of an industrial internet alliance comes as Shenzhen finds itself caught in the crossfire of an ongoing US-China tech and trade war. This dispute intensified when the US government put Huawei and other Chinese hi-tech firms on a trade blacklist over national security concerns, preventing them from buying hardware, software and services from American hi-tech suppliers.
China’s most advanced hi-tech efforts, from artificial intelligence (AI), drones and electric batteries to robotics and 5G mobile systems, are being developed in Shenzhen, which is home to the likes of Huawei, ZTE Corp, Tencent, DJI and BYD Co.
In the span of four decades, Shenzhen – which became China’s first special economic zone after it was opened up to capitalism and foreign investment in 1979 – has grown from a fishing village of 30,000 people to a sprawling manufacturing and innovation megacity of more than 13 million.
Shenzhen vice-mayor Wang cited Hon Hai, also known as Foxconn Technology Group, as an example of a company that has benefited from the industrial internet. He said the company, which is also the largest private-sector employer in China, has raised the efficiency of its manufacturing operations by an estimated 30 per cent with the use of industrial internet applications.
Hon Hai, the main assembler of Apple’s iPhones, has confirmed that it has joined the Shenzhen-based industrial internet union.
“We have joined a number of other industry leaders to form this organisation that will foster innovation, cooperation and technology exchange,” a Hon Hai spokesman said on Thursday.
Tencent, which runs the world’s largest video games business and China’s biggest social media platform WeChat, said in November last year that it will increase investments in areas related to the industrial internet as the Hong Kong-listed firm sharpens its focus on enterprise customers.
Representatives from Tencent and Huawei did not immediately respond to emailed inquiries about their participation in the alliance.
Privately held Huawei, the world’s largest telecoms network equipment supplier and second biggest smartphone vendor, announced earlier this year that it has adopted a three-stage process in its own industrial internet development effort, including automation and digitalisation of operations.
The company’s contributions to global 5G mobile technology research and development are likely to become apparent as these next-generation networks are rolled out around the world. With peak data rates up to 100 times faster than 4G, 5G will serve as “the connective tissue” for IoT, autonomous cars, smart cities and new mobile applications – providing the backbone for the industrial internet, according to a recent Deloitte report.
Additional reporting by Li Tao