TSB in China: Day 2

Posted on 26 Sep 2013 by The Manufacturer

Dr Ben Todd of Arcola Energy discusses his experiences on the second day of the Technology Strategy Board's mission to China.

Handpicked for their innovative approaches to sustainable manufacturing, 18 forward thinking start-ups, SMEs, enterprises and academic organisations have gone to China for a week long, fact finding mission with fast-track introductions to leading potential technology collaborators across China.

The mission has been organised by the Technology Strategy Board and the Ministry of Science and Technology of the People’s Republic of China (MoST).

Tomorrow’s Manufacturing, Mission to China will help these organisations form collaborative partnerships in China.

The aim is to work together on research, development and innovation, with the hope of creating long-lasting partnerships between the UK and China.

See the first ‘TSB in China’ blog for an overview of the mission’s objectives.

Not Made but “Created” in China

Arcola executive director Ben Todd

“Two days into the Tomorrow’s Manufacturing, Mission to China and we’ve not had much sleep. We started with a fascinating introduction to the current status of China’s manufacturing and ambitions for the future from the Ministry of Science and Technology. In essence, it seems, the government aims to make the transition from Made in China to Created (and made) in China.

“It is a no-brainer that adding higher value activities such as design at the front-end and sales & service at the back-end will boost revenues from industrial activity. But the express intent to maintain lower value manufacturing to support the transition of 100s millions of people from rural poverty to modern living seems to me, important.

Modernisation of China’s industry is apparently not just about “keeping-up-with-the-Joneses” and creating a high-tech elite but a plan for improving the lives of 1.4 billion people. We heard today that 10% of all land and 60% of all water is ‘contaminated’ and China ranks number one in the world for accidents. But there is a glimmer of hope. Recycling and remanufacture featured on the government agency plans for modern manufacturing.

Today was a day for meeting, pitching and collaborating. For some of the ‘Western’ client-facing companies we met, social and environmental issues were expressed in the disappointing and limited-effectiveness terms of CSR. More interestingly, there were lots of companies targeting clean-tech business opportunities.

For Arcola Energy, there was lots of interest – fuel cells seem to be on the technology road-map for China. I have yet to meet a Chinese counterpart fuel cell company, but a battery company clearly saw fuel cells as a new opportunity to exploit expertise in electrochemistry and cell manufacture. Unsurprisingly, current prices for fuel cells raised eyebrows.

Apparently two local companies have thus far attempted to create fuel cell vehicles for the Chinese market and both failed due to high cost. Can this internal-market cost pressure drive China to do for fuel cells what it has done for solar PV – massive cost reduction?

I can’t think of a single Chinese company we have met thus far which included closed-loop, waste minimisation, or energy efficiency as a core plank of their business strategy – something to look out for in our remaining meetings. Perhaps that is one of the reasons we have been invited here.

Among our contingent are several UK Universities – Cambridge, Cranfield and Warwick – with pretty exciting approaches to our industrial future, exemplified by a three-step programme:

1. Improve efficiency of existing processes through good practice

2. Upgrade to newer resource efficient processes

3. Re-imagine our material society to make sensible use of resources

It seems that the driver in Chinese manufacturing remains cost, and the flip side of increasing wealth is rising labour and land costs. Automation was discussed by several companies as a way to mitigate these rising costs. Resource efficiency could perhaps next. Both of which could provide a vehicle for wider improvements in environmental performance.

But off-shoring challenges the idea of China maintaining a dual economy – high value industrial activities to bring increased wealth to those on the ladder and lower value manufacture to ‘pick-up’ those still working the fields. By this logic, the ‘off-shoring’ should be from the developed East to the poorer West of China, not to other countries. If this cannot be achieved, then does it mean that China will struggle to achieve a ‘reasonable’ distribution of wealth?

Does this also mean that whilst improving the sustainability of Chinese manufacturing will bring great benefit to China and to the world, there is a danger that the dirtiest and most dangerous industries will simply be pushed somewhere else?

A fellow mission member argued the optimistic angle – as global companies address whole-system sustainability as a pre-requisite for mid-term success, the ideas, regulations and methodologies will necessarily be propagated. Let’s hope so.”