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From pipes to apps, China has it all!

By Cheng Yu | China Daily | Updated: 2023-11-09 11:20

Employees work on the production line of a digital product manufacturer in Ganzhou, Jiangxi province. [ZHU HAIPENG/FOR CHINA DAILY]

As a tech reporter, I am constantly curious about how private firms in China drive their digitalization efforts, especially at a time when almost all companies — be it multinationals with a market valuation worth billions of dollars, or small — and medium-sized enterprises — are talking about this incessantly.

I asked myself — since many private companies are SMEs, how are they able to bear the high cost of purchasing an entire Enterprise Resource Planning suite?

And I got the answer recently while interviewing a group of private manufacturing firms in Guangdong province, who pointed to the existence of a unique, Chinese-style digitalization.

For many SMEs in the country, digitalization is not about cool and top technologies, but about a tool that can solve real-world problems.

During a visit to the Foshan factory of Rifeng, a well-known Chinese provider of plastic pipes, I found each pipe marked with a laser-etched identification code that acts like an "ID card".

Yin Lang, chief information officer of Rifeng, said behind the small code was a digital system that tracked the entire life cycle of a pipe, including which batch of raw materials was sent to the production line, which worker conducted quality inspections, which logistics provider transported it and which electrician had installed it in an end-user's home.

Yin said the company uses this simple code to send engineers for on-site repairs across China and finish the repairs within two or three days, as it is able to trace the batch number of all products sold and locate each consumer to offer assistance.

"Digitalization is not always about high-end digital equipment. It is about building a digital infrastructure on which companies can build high-rise buildings, do decoration, and build their own digital ecosystem according to their own needs," he said.

Yin gave me another example.

The pipe company, based in Guangdong, now has thousands of distributors nationwide and it is not easy to achieve efficient information transmission.

"In China, a simple enterprise-level app can help the data flow among business departments, and the feedback from customer service departments can be captured by production and logistics departments quickly," he said.

This is indeed true.

After more than 20 years of consumer internet penetration, China has developed its own unique digital infrastructure, which has laid a solid foundation for Chinese-style digitalization for private companies.

Currently, almost everyone in China has a smartphone and has access to an all-encompassing social media app. This makes connecting different people and organizations nationwide very easy.

For private companies, such apps help to connect and collaborate with upstream and downstream partners at a lower cost and more efficiently.

This is how Chinese private enterprises are leveraging digitalization to power China's manufacturing industry.

According to the Ministry of Industry and Information Technology, China has been the world's largest manufacturing power in terms of industrial output for decades. It is also the only country in the world to develop all the industrial categories listed in the United Nations industrial classification.

Despite rising economic uncertainties, private enterprises are relying on step-by-step digitalization improvements to boost operating efficiency, which has also increased the added-value of China's manufacturing sector, giving the future of "Made-in-China" more heft.

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