Special Report – Belt and Road

‘Made in China’ successes give boost to export ambitions

China’s ‘Belt and Road Initiative’ is coming together as planned, with further domestic manufacturing achievements and the re-establishment of ancient trade routes

PUBLISHED : Wednesday, 21 June, 2017, 12:28pm
UPDATED : Wednesday, 21 June, 2017, 12:28pm

Providing a dramatic demonstration of the mainland’s growing importance as a global manufacturing and export hub, a cargo train carrying 123 high-end S90 Volvo cars chugged out of Daqing in Heilongjiangprovince last month – the first time that China had exported cars which had been manufactured entirely in China to western Europe by train.

With Zeebrugge Port in Belgium as the final destination, the journey of 9,832km spanned Russia, Belarus, Poland and Germany, on a route which roughly follows the ancient Silk Road, and which is part of China’s “Belt and Road Initiative” to expand global trade.

“The train route ties Volvo’s global manufacturing and logistics strategy to the multibillion euro trade flows between China and Europe and the ‘One Belt, One Road Initiative’ [the former name of the trade initiative] that seeks to resurrect the age old Silk Road trade route for a new era of global trade,” Volvo says in a statement.

The Swedish marque shifted some of its S90 production to Daqing last November, and plans to build all its S90s there soon.

Chinese-owned Volvo says that existing and future 60-series medium-sized Scalable Product Architecture (SPA)-based cars will be built at its plant in Chengdu, Szechuan province, in western China, while its planned 40-series smaller cars will be made at a plant that is under construction in Luqiao, 350km south of Shanghai.

China’s key manufacturing indicator, the Caixin/Markit Manufacturing Purchasing Managers’ Index fell for the first time in 11 months in May, dropping to 49.6, with a reading below 50.0 suggesting a contraction in the sector.

Despite this, China remains committed to its Made in China (MiC) 2025 strategy, launched in 2015 and designed to turn the mainland into a leading manufacturing power.

China’s goal is for products to be synonymous with innovation and quality
Joe Kaeser, CEO and president, Siemens

German conglomerate Siemens is also making the most of China’s industrial evolution. Last year, it vowed to increase investment in its China unit, Siemens Electronic Works Chengdu – the company’s first overseas model digital factory, where machines and products talk to each other, boosting productivity.

Siemens promised more than US$145 million in additional investment, with chief executive officer and president Joe Kaeser saying in March that his company fulfils the MiC goals of in promoting innovation and high-end products.

“China’s goal is for products to be synonymous with innovation and quality,” Kaeser said at the China Development Forum in March. “China’s government understands that companies have the potential to play a vital role in the renewal of its economy, but multinationals must also understand that China needs reliable partners who think long term and do not sidestep challenges ahead.”

Premier Li Keqiang announced recently that China will open several pilot zones to accommodate MiC where the policies and practical implementations of the strategy can be tested. The Ministry of Industry and Information Technology has identified 12 cities that will receive favourable policies in financing and other related fields.

One major success of the MiC strategy is the test flight of China’s first large domestically-produced airliner, the Comac C919. The Shanghai flight from Pudong International Airport on May 5 lasted 79 minutes, with the aircraft climbing to an altitude of about 3,000m at an average speed of 298km/h. The aircraft is built by state-owned Commercial Aircraft Corp of China, and the company says it has received 570 orders from 23 customers.

In a statement following the test flight, China’s State Council said: “The successful maiden flight of the C919 marks a milestone for China’s aviation industry. The project carries great weight and importance to the country’s innovation drive and manufacturing upgrade push.”