everything is connected: china's political, economic and industrial policies and the...
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Everything Is Connected:
China's Political, Economic and Industrial Policies and the Development Of China's High Tech Industries
中国的电子工业China’s
Electronics Industry
Technology and Business Insider (TBI) is a provider of intelligence about emerging technologies, companies and business sectors
China By the Numbers China Economic Review 2009
5 m students graduated from universities in 2007 Opportunity
Every year since 2002, 30% of China’s university graduates have not found employment! Challenge
Note: Consensus is that China needs to maintain a GDP growth rate of >8% annually to maintain sufficient employment and avoid civil strife. Challenge
中国的电子工业China’s
Electronics Industry
© TBI 2010
China By the Numbers China Economic Review 2009
High Tech Industrial BaseIn 2007 China’s High Tech industrial
sector accounted for 7.8 of GDPIn 2006 China had 1.4 m people
specifically engaged in scientific R&D, second only to the USA
At the end of 2006 China had 150,000 registered firms involved in science.
中国的电子工业China’s
Electronics Industry
© TBI 2010
China is UniqueProgress is extremely rapid
China has not singled out a particular industry in which to excel. It is going for the complete supply chain in high tech industries, especially electronics
China has potential for incredible sustainment: (large population of workers, large market)
中国的电子工业China’s
Electronics Industry
© TBI 2010
China is now at an inflection point more so than the West and how they deal with it is immensely important to all of us.
China is adept at technology transfer in all of its forms both legitimate and illegitimate and the momentum is such that any shortages in experience and intellectual capital are rapidly being overcome.
In the long run this will lead to significant increases in innovative capacity, the lack of which today is the most common, and only, comfort zone we have when viewing China as both a hard power and soft power competitor
中国的电子工业China’s
Electronics Industry
© TBI 2010
China recognizes the pivotal role of the microelectronics industry to its overall economic development, and its economic contribution to what the government refers to as a well-off society.
China is on track to achieve its “innovation-oriented” society goal by 2020.
In high-end electronics markets China is just beginning to seriously participate as a supplier as well as a buyer. © TBI 2010
中国的电子工业China’s
Electronics Industry
China’s participation in high-end electronics markets will grow fast and feature high mix and low volume production, covering surveillance, medical electronics, automotive electronics, industry automation, military electronics, aviation and space electronics.
China Outlook Newsletter December 2008
中国的电子工业China’s
Electronics Industry
© TBI 2010
China’ Electronics IndustryChina produces 35 percent of the
global electronics market’s revenues of US $ 2 trillion.
It is important to analyze China’s electronics industrial base in terms of its connectivity to multinational and foreign-owned companies and global markets
It is just as important to understand what is happening China’s domestically owned industry and market demand.
中国的电子工业China’s
Electronics Industry
© TBI 2010
中国的电子工业China’s Electronics Industry
1990s
1980s
2000s
The last phase of Globalizing Chinese Companies © TBI 2010
Common “Success” Story
Transition from low cost (e.g. product assembly and manufacture) to value-added components, materials and equipment.
Consumer goods
Circuit card assembly
Circuit card fab
ICs
中国的电子工业China’s
Electronics Industry
© TBI 2010
And it is integrated circuit electronics that has given us the PGMS and NCW that the Chinese have been studying since GWI
中国的电子工业
China’s Electronics
Industry
© TBI 2010
Comparative Growths In the Value Of High End Electronics Production:
2005-2008
Source: OECD Information Technology Outlook
Percent Per Annum Growth
China USA
Control and Instrumentation
25.39 3.78
Radio and Radar 17.81 2.94
Electronic Data Processing
15.8 -1.21
Telecommunication 15.56 -0.78
Medical and Industrial 15.38 4.3
Components 15.17 2.18
Semiconductors and Microelectronics
The single most important technology sector for China’s economic development and high-tech industrial base is its semiconductor and microelectronics design and fabrication capability.
The key to China’s ability to design, develop, and produce high-reliability complex electronics components and systems is a rapidly growing microelectronics industry.
中国的电子工业China’s
Electronics Industry
© TBI 2010
Industrial Policies
National Guidelines for Medium- and Long-term Plan
for Science and Technology Development
(2006-2020)Electronics, information theory and
processing (electromagnetic fields, nano-electronics, bioinformatics, adaptive signal processing)
Computer science (system architectures, software engineering, natural language processing, virtual reality, embedded systems)
Network and information security
中国的电子工业China’s
Electronics Industry
© TBI 2010
Industrial Policies National Guidelines (2006-2020)
Automation science (control theory, pattern recognition, artificial intelligence, robotics, environmentally sustainable industrial production processes)
Semiconductors, photonics (nanotechnology, high-speed optical networks, quantum optics, photonics in health and medical research)
Interdisciplinary research between information and mathematics (theoretical studies on number representation, software engineering)
中国的电子工业China’s
Electronics Industry
© TBI 2010
Industrial Policies Electronics Information
Industries Stimulus Plan of 2009
Ten objectives of announced the plan included the following objectives: increasing fiscal investments improving the investment environmentaccelerating the promulgation and
enforcement of finance and taxation supportenhancing support to export-oriented
enterprisessupporting the application of information
technology in traditional industriesencouraging enterprises independent
innovation and creationexpanding the financing systemsupporting mergers and reshuffling superior
enterprisesexpanding domestic demandbuilding industrial security and injury alert
mechanisms.
中国的电子工业China’s
Electronics Industry
© TBI 2010
Industrial Policies Developing a true dual-use
industrial base
China is seeking to inject some of the private sector enterprise that increasingly drives its exports into a fresh sector: defense.
In a move to break down barriers to private involvement in arms production, Beijing approved recently the creation of a national fund to help finance private contractors – which often struggle to raise capital – while also investing in turning state defence suppliers into shareholding companies.
Officials believe that tapping private sources of funds will raise the hope of more efficient allocation of capital within the defence sector. “The development history of western defence industries makes clear that the capital markets have been fertile soil for their fast development,” state media recently quoted Xu Haipeng, head of the Defence Science and Technology Enterprise Management Association, as saying.
Source: Financial Times (London) 05 Jan 09.
中国的电子工业China’s
Electronics Industry
© TBI 2010
Everything Is Connected: How China is Taking Advantage of the Global Consumer Electronics Market Decline
中国的电子工业China’s
Electronics Industry
© TBI 2010
Globalization With Chinese
CharacteristicsChina’s global reach, intellectual capital and
industrial capacity will soon be sufficient to achieve its political objectives through soft power -- without firing a shot
The pressure to maintain internal order ensures that the CCP will continue to develop policies in support of the growth of its middle classes through high tech value chain escalation and the globalization of China’s companies.
Remember this from an earlier “this decade will now see the push of Chinese companies and brands in to foreign markets”
中国的电子工业
China’s Electronics
Industry
© TBI 2010
Globalizing Chinese Companies
What’s holding China back?
“Maybe the more convenient way [to globalize Chinese companies] is through a kind of merge and acquisition and really buy the foreign company and fully use the foreign talent to manage the company.”The McKinsey Quarterly, Video,
China’s former chief trade negotiator, Long Yongtu November 2008
中国的电子工业
China’s Electronics
Industry
© TBI 2010
Globalizing Chinese Companies
Chinese Companies Go Abroad “…many Chinese companies plan to take
advantage of the global downturn to make greater inroads into the West.
over half of smaller industry leaders interviewed have already begun moving overseas, or plan to begin within the next five years. Shaun Rein is the Founder and Managing Director of the China Market Research Group Jan 5, 09
中国的电子工业
China’s Electronics
Industry
© TBI 2010
Globalizing Chinese Companies
100% of large industry leaders interviewed have already started moving abroad, as have 80% of smaller leading companies.
80% of large industry leaders interviewed consider building their brand image from domestic Chinese to global name brand their primary goal in expanding abroad.
All respondent companies will establish more R&D centers abroad to better utilize the talent and technology advantages thereChinese Companies Go Abroad (Part 2: The
Consumer Electronics Sector) January 06, 2009
中国的电子工业
China’s Electronics
Industry
© TBI 2010
Emerging Electronics Capabilities And Markets
Avionics
Automotive
Renewable Energy
Medical
Defense
中国的电子工业
China’s Electronics
Industry
© TBI 2010
Aerospace Electronics Supply Chain
Printed Wiring Board Assembly:0-1 year development time; 3-30 years of required use
Service Provider (Airlines):10-30 years of required use
Paying Customers
Subsystem (Electronic Module):1-5 years development time; 3-30 years of required use
System (Flight Control):2-5 years development time; 5-30 years of required use
System Platform Provider (Airplane)
3-10 years development time; 5-30 years of required use
Regulatory Agency (FAA, EPA, UL)
Multilayer Printed Wiring Board3-6 mo. development time; 2-30 years of required use
Resin
Pre-preg and Core
Woven Fabric
Glass-Fiber Bundles
Component 0-6 mo. development time; 2-30 years of required use
Die
Encapsulant
Leadframe
Accelerator
Flame Retardants
Release Agent
Filler
Resin
~~
Copper Foil
中国的电子工业China’s
Electronics Industry
© TBI 2010
C919: China’s Domestic Large Jet Program
电子工业China’s
Electronics Industry
China’s latest large aircraft development program is the C919 and is aimed squarely a gaining a share of the global long haul air transport market.
© TBI 2010
ARJ21: Advanced Regional Jet for the 21st Century
中国的电子工业China’s
Electronics Industry
© TBI 2010
Another advanced aviation development case with Brazil’s assistance this time.
Xi’an Aircraft: Xinzhou 600 Aircraft中国的电子工业China’s
Electronics Industry
Xi’an Aircraft is another result of the industry’s restructuring, with each company taking aim at challenging western manufacturers in specific market segments. © TBI 2010
China’s L-15 FalconThe Hongdu Aviation Industry Company
has just completed an early version of its L-15 Falcon jet
The jet’s turbojet engines produce 4,200 kg of thrust and speeds up to M1.6
This is one first step for China to close capability gaps in gas turbine engine development
The company also plans to open a chain of R&D and manufacturing centers in order to “strengthen international cooperation” and facilitate technology exchange
中国的电子工业China’s
Electronics Industry
© TBI 2010
Everything Is Connected:Electronics required for jet engine controls
The L-15 is ideally suited to challenge US, British an French markets in the developing world.
As for gas turbine engines, research I worked on in 2003 concluded “not for at least another generation”. We were wrong!
The Aviation Industry Corporation of China (AVIC) commenced construction on 9 November 2010 of China's largest military jet engine development center as part of increasing efforts to close what is deemed as a gap in the country's industrial capabilities.
The engine development centre will focus on military as well as commercial systems and the facility will meet the future development needs of air power, particularly the development of large aircraft. It ... will eventually form China's largest aero engine base.
中国的电子工业China’s
Electronics Industry
中国的电子工业
China’s Electronics
Industry
© TBI 2010
China’s Auto Industry
• In 2009, China passed the US to become the largest auto market in the world.
• As of 2009 there were 52 foreign and domestic car makers operating in China, compared to 15 in the United States.
• In an effort to make the Chinese automobile industry more competitive internationally, the Chinese government has encouraged car companies to consolidate and reduce dependence on government subsidies and joint ventures with foreign companies.
• The golden period of China's auto industry will likely last 20 more years
• The yearly demand for passenger vehicles will reach over 35.2 million units in 2030
Source: Report-State Council, the Society of Automotive Engineers and Volkswagen China on July 5, 2010
中国的电子工业
China’s Electronics
Industry
© TBI 2010
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中国的电子工业
China’s Electronics
Industry
© TBI 2010
Standard Automotive Electronics
• Anti-lock braking system (ABS): MCU, direction sensor, speed sensors
• Tire pressure measurement system (TPMS): MCU, pressure sensor, probes
• Backward radar detector: MCU, infrared transceiver, alarms
• Power window: motor, power components and circuit protection
• Power steering: motor, power components and circuit protection
• Power lock: motor, encoder/decoder• Automatic transmission: motor and circuit
protection.
中国的电子工业
China’s Electronics
Industry
© TBI 2010
Hybrid And Plug-In Electric Vehicles Electronics
• Hybrid and electric vehicles add complexity to vehicle electronics architecture and design.– The power train requires additional components such
as battery and motor controllers.– Functions such as regenerative breaking must be
integrated into current vehicle safety systems. – Extra consideration must be given to the effects of
electronic noise and interference on the control system. – EV/HEV further complicates integration especially as
power train control is essentially a drive-by-wire system critical to the safety of the operation of the vehicle.
– Electronic microcontrollers are essential to vehicular power train applications and subject to increasingly stringent environmental and government regulations and design improvements
中国的电子工业
China’s Electronics
Industry
© TBI 2010
HEV/EV Automotive Electronics Demand
• “Thanks to the mature hybrid power technology, China will likely produce 100,000 hybrid vehicles, 30,000 pure electric vehicles, and 10,000 fuel cell-powered vehicles in 2010”
• “Automotive electronics is an industrial discipline and China should attach much importance to automotive electronics research and development so as to speed up its transition from a major manufacturing country of entry-level vehicles to a high-end vehicle manufacturing country.”
• Production volumes projected to be, and 1 million HEVs, 300,000 all electric and 20,000fuel cell vehicles by 2015.
Source: State Council, the Society of Automotive Engineers and Volkswagen China Jointly Authored Report July 5, 2010
中国的电子工业
China’s Electronics
Industry
© TBI 2010
Renewable Energy
Sept 2010: China overtook the United States top spot in Ernst & Young’s quarterly renewable energy country attractiveness ranking China as the most attractive market - of 27 countries monitored since 2003-for investment in wind and solar projects
“Strong government resolve together with good infrastructure and a robust market has aided China in its drive to become a global leader in the renewable energy sector.”
Determinants: access to capital, access to the power grid, availability of land, planning barriers, and regulations
中国的电子工业
China’s Electronics
Industry
© TBI 2010
Wind Energy
• In 2004 there were six wind turbine makers in 2004 in China.
• In 2009 there were more than 70. • China is the third largest wind power market in the
world.• Sinovel Wind Group Co, which has the largest share in
the domestic wind power equipment market, is now building a national offshore wind power technology and equipment research and development (R&D) center, which was approved by the National Energy Administration in January, 2010.
• Vestas, the world’s largest maker of wind turbines opened a $50M R&D center in Beijing on Oct 12,2010 to cover high voltage engineering, aerodynamics, materials and software development
Source: China Daily 02/22/2010
中国的电子工业
China’s Electronics
Industry
© TBI 2010
Main Components Of A Wind Turbine System
Wind Power Rotor
Gearbox (optional)
Power Conversion and Control
Power Transmission
Generator
Power Converter (optional)
Power Transformer
Power Conversion & Power Transmission
Power Conversion & Control
Mechanical Power
Electrical Power
Supply Grid
中国的电子工业
China’s Electronics
Industry
© TBI 2010World’s Largest Solar-Powered Building in Dezhou, Shandong Province
Photovoltaics
中国的电子工业
China’s Electronics
Industry
© TBI 2010Source: European Photovoltaic Industry Association 2010
China appears as a new player in 2009 with about 160 MW installed. For the Policy-Driven scenario, the annual market is expected to reach 30 GW by 2014.
中国的电子工业
China’s Electronics
Industry
© TBI 2010Source: China’s Electronics Industry 2009
Global PV Production in 2007 and Future Planned Production Capacity
Increases
China’s Medical Electronics Industry
Many clinical medical devices are microprocessor-based electromechanical instruments that use a common set of building blocks: power control and temperature management; a user interface that includes a keypad, LCD monitor and audio control; flash or
EEPROM for data loggingdevice interfaces for connections to other
machines.
中国的电子工业
China’s Electronics
Industry
© TBI 2010
中国的电子工业
China’s Electronics
Industry
© TBI 2010
China’s Medical Electronics Industry In March 2009 China’s Ministry of Science and
Technology announced that it will set up an independent national innovation industry base for medical devices in Chongqing.
Forecast at $45.6 bn in 2010, 41% growth over 2009
Forecast at $12.1 bn by 2014
More than 200 foreign owned and and transnational corporations companies, about 70 percent of China’s high-end medical apparatus and instruments producer base, dominate the industry.
Government investment in hospital reforms expected to stimulate 20% annual growth.
中国的电子工业
China’s Electronics
Industry
© TBI 2010
Source:iSuppli 2010
China’s Medical Electronics Industry: Growth Rates 2008-
2013
中国的电子工业
China’s Electronics
Industry
© TBI 2010
China’s Defense Priorities
• Force Modernization– Precision Guided Munitions– Unmanned systems– Space – Producing 4th Generation Fighters– Expanding amphibious capabilities– Carrier and Blue Water Navy– Submarine force transformation– C4ISR
• Power Projection Naval Deployments• Advanced Base Agreements
中国的电子工业
China’s Electronics
Industry
© TBI 2010
The C4ISR Challenge – its all electronics and
software
中国的电子工业
China’s Electronics
Industry
© TBI 2010
China's Defense Expenditures 1985-2008
Source: The Military Balance, International Institute for Strategic Studies
1985 2000 2005 2008
$US bn 29.41 41.2 29.9 60.2
Per Capita 28 32 23 27
% GDP 1.2 2.1 1.3 1.3
Total Personnel
(mn)
2.7 3.5 2.2 2.3
China's defense spending is by no means transparent!China's officially published 2010
defense budget totaled about $77.9 billion
Chinese defense spending has increased by an average of 12.9% annually since 1989 when Beijing launched an ambitious army modernization program, and this was only the second year over that period in which annual growth was less than 10%.
中国的电子工业
China’s Electronics
Industry
中国的电子工业
China’s Electronics
Industry
© TBI 2010
Source: The Military Balance, International Institute for Strategic Studies
Arms Transfers 2001 & 2008
To China From China
Value
% of Global Trade
Value % of Global Trade
2001 1,350 3.5 1,105 3.2
2008 800 1.4 1,400 4.4
% Change
59% 127%
中国的电子工业China’s
Electronics Industry
© TBI 2010
China’s Arms Sales Arms sales to enhance foreign relationships and generate revenue to support domestic defense industry.
Source: Military And Security Developments Involving the People’s of China 2010:A report To
Congress
中国的电子工业
China’s Electronics
Industry
© TBI 2010
Comparative Growths In the Value Of High End Electronics Production:
2005-2008
Source: OECD Information Technology Outlook
Percent Per Annum Growth
China USA
Control and Instrumentation
25.39 3.78
Radio and Radar 17.81 2.94
Electronic Data Processing
15.8 -1.21
Telecommunication 15.56 -0.78
Medical and Industrial 15.38 4.3
Components 15.17 2.18
中国的电子工业
China’s Electronics
Industry
© TBI 2010
What about U.S. ?
COTS = CommercialCommercial = China
China = Control Control = Cost
Increasing Control = Increasing Cost C4I
Supply chain vulnerability for the most critical components of the American war fighting strategy and tactics!
中国的电子工业
China’s Electronics
Industry
© TBI 2010
JSF Program Pedigree of COTS Processors• Survey of ASIC/FPGA use on JSF• Results: 73 ASIC/FPGA types across 12
subsystems
FPGA ASIC
FPGA Manufacture
Asia
Europe
Asia Europe
USA
USA
JSF FPGA & ASIC Usage ASIC Manufacture
Unknown
中国的电子工业
China’s Electronics
Industry
© TBI 2010
Everything IS Connected
• China’s Electronics Industrial Base & Policies
• Western Tech transfer and its contribution to China’s economic and military development
• Off shoring of production from West to East
中国的电子工业
China’s Electronics
Industry
© TBI 2010
• Given China’s freedom to make long range strategic global business moves it’s impact on the global competitive environment and employment base the high-technology industries cannot be discounted.
• Every business must fully understand the implications of the new
China. • Those implications are constantly changing
- as China itself changes so does the rest of the world changes hence the need to constantly monitor developments in China.
Everything is Connected
中国的电子工业
China’s Electronics
Industry
© TBI 2010
Remember
• If you are involved in anything that implies risk to resources of any kind, you absolutely must stay on top of developments on a daily basis to understand the mosaic as it evolves.
• The pace of change in the modern world is too fast and too broad to take the chance of missing what your competitor - nation, institution, producer, etc.- also has access to.
• Take your eyes off the ether and you’ll miss critical intelligence that will eventually be your undoing