China's manufacturing increasingly defining the global benchmark

China's manufacturing sector is increasingly defining the global benchmark for industrial speed, scale and technology adoption, and is reshaping how advanced factories are built globally, Joerg Gnamm, head of global manufacturing at Bain & Company, said.

Speaking in an exclusive interview with China Daily at the sidelines of the Summer Davos, Gnamm said China's industrial advantages are not limited to cost, but extend to system-level capabilities.

"What stands out in China is the combination of scale, speed and the ability to integrate across the full value chain," he said. "That is what enables what we call impact at scale."

Gnamm said China's manufacturing ecosystem remains structurally distinct due to its complete domestic supply chains and rapid innovation cycles.

"China has almost the entire value chain within one country at massive scale," he said. "That creates a very different environment for deploying advanced manufacturing."

He added that the country's factories are characterized by unusually fast feedback loops between production, engineering and customers, allowing companies to iterate products and processes at high speed.

A third advantage, Gnamm said, is organizational discipline in scaling innovation. Once a solution is proven, it can be replicated across multiple plants and regions far more quickly than in many other markets.

The discussion centered on the evolution of so-called lighthouse factories — advanced manufacturing sites recognized by the World Economic Forum for their use of digital technologies and automation.

Gnamm said the concept has shifted significantly in recent years, especially in China, where such factories are now increasingly seen as part of broader industrial systems rather than isolated benchmarks.

"A lighthouse factory today is not just about being the most efficient plant," he said. "It is about how digital technologies, AI, sustainability and human-machine collaboration are integrated end-to-end."

He said the next phase of industrial development is less about individual breakthroughs and more about "impact at scale" — the ability to replicate advanced systems across entire networks of factories and supply chains.

China, he added, has become a leading environment for this model due to its scale advantages and integrated industrial base.

While artificial intelligence is accelerating manufacturing transformation globally, Gnamm said the key challenge is not deployment, but scalability.

"Many companies can apply AI in one production line," he said. "But the real difficulty is turning that into a system that can be replicated across factories."

He said China's advantage lies in its ability to standardize and scale such applications quickly across large industrial networks, though he cautioned against assuming uniform global gaps.

Leading manufacturers in the US and Europe, he noted, are also advancing rapidly in AI adoption, particularly among tech-driven firms.

Gnamm said he agrees with recent remarks by China's top official describing the current stage of development as Opportunity 2.0, particularly for manufacturing and industrial collaboration.

He said this phase is characterized by the diffusion of advanced manufacturing capabilities beyond China's borders.

"This is not only about China capturing more of the pie," he said. "It is also about Chinese capabilities being combined with global ecosystems."

Gnamm added that the future is likely to involve more regional production systems built for local markets, rather than purely export-driven models.

chengyu@chinadaily.com.cn