Made In China 2025 Sectors China Manufacturing in the 21st Century - Opportunities for UK-China Partnership

www.cbbc.org www.ukti.gov.uk

Contents

Introduction 02

Advanced Rail & Equipment 03

AGRICULTURAL MACHINERY AND TECHNOLOGY 07

AVIATION AND AEROSPACE EQUIPMENT 12

BIOPHARMACEUTICALS AND HIGH-END MEDICAL EQUIPMENT 17

POWER EQUIPMENT AND TECHNOLOGY 23

HIGH-END MANUFACTURING CONTROL EQUIPMENT AND ROBOTICS 29

INTEGRATED CIRCUITS AND NEW GENERATION INFORMATION TECHNOLOGY 32

ADVANCED MARINE EQUIPMENT AND HIGH-TECH VESSELS 37

NEW AND ADVANCED MATERIALS 41

LOW AND NEW ENERGY VEHICLES 45

REFERENCES 49

www.cbbc.org | 01 Introduction

Part One of this report has introduced the Made in China 2025 initiative including some of the underlying political and economic trends, and gives a summary of the 10 priority sectors that will be the focus of the programme in the years ahead. In Part Two we will take a much closer look at each of these 10 priority sectors in detail, and consider the specific aims and objectives that have been outlined in order to achieve the overall MIC 2025 goals. In particular we will look at China’s current and future needs and ambitions, and match them to UK industrial strengths, considering the opportunities and challenges for UK companies. We will also introduce the key Chinese players in each industry, and highlight around 50 sub-sectors and numerous industry applications where there are likely to be specific opportunities for UK companies.

There was around 18,000km of high-speed railway at the end of 2015, with another 1,500km planned for 2016.

02 | www.ukti.gov.uk ADVANCED RAIL AND EQUIPMENT

1. Industry Background The first Chinese high-speed train In order to further accelerate the (CRH1) began operating in 2007, with development of China’s rail industry, and Future Trends a top speed of 250km/h, the result of the National Development and a joint venture with Bombardier (most Reform Commission (NDRC) drafted China’s railways are playing a vital of the technology in the CRH1 was an Integrated Transport System role in its economic and social supplied by Bombardier). The later Development Plan into the 12th Five development, with an extensive CRH2 followed a similar development Year Plan (2011-2015). China Railway network connecting major cities across track and most of the technology used Construction Corporation (CRCC) 120,000km of track. New high-speed was produced by Kawasaki. In 2008, has been tasked with completing a connections have brought China’s CRH3 was introduced with a top speed plan called ‘Four Verticals and Four cities, people and businesses closer of 350km/h, thanks to a joint venture Horizontals’ designed to create a together – there was around 18,000km with Siemens. high-speed cross-country network of high-speed railway at the end of of lines, from Beijing to Harbin and 2015, with another 1,500km planned After several years of domestic R&D, Dalian in the North-East; from Beijing for 2016 (compared to the 150km China now owns considerable IP to Shanghai and Shanghai to Shenzhen for HS2 which is expected to take 10 rights for core technologies in wheel, running north-south; from Qingdao to years). dynamics, air dynamic controls, train Taiyuan, Xuzhou to Lanzhou; Shanghai body structure design, steering, to Chengdu; and Shanghai to Kunming China has also been investing heavily in traction system control, braking running east-west. It also included high-speed train manufacturing during control, environment control and extending and connecting existing lines the past 10 years, and it has introduced systems integration. Using domestic for passenger transport across the advanced technologies from Germany, R&D capabilities and technical support country – connecting regional second Japan, Canada and France through from companies such as Alstom, China and third-tier cities to regional capitals. partnerships, including electronic has manufactured further advanced control systems from Alstom; vehicle high-speed train products, such as In the new 13th Five Year Plan (2016- control systems from Siemens; rail the CRH5, with its low temperature 2020) the aim is for the high-speed technology from Bombardier; and resistance abilities and a top speed of lines to extend to 32,000km, with traction technology from Hitachi and 350km/h. The country currently has additional investment of RMB 2.8 Kawasaki. some of the most mature high-speed trillion (approx. £280 billion) to form train manufacturing technology and its a national rail network covering products are sold around the world. 145,000km by the end of 2020.

www.cbbc.org | 03 2. Key Chinese Players • In 2013, it set up an industrial electric CNR has five R&D centres, in power R&D centre in the US with New Changchun, Dalian, Qiqihar, Beijing and In China’s trains and rolling stock Jersey Institute of Technology; Tianjin, and also three overseas R&D market, there are two large companies • In 2015, it set up a rail technology centres: – China South Rail Group (CSR) based R&D centre in Germany with the in South China and China North Rail Dresden University of Technology. • In 2013, it set up a welding technology Group (CNR) based in North China. R&D centre in the US with University The two companies were merged as It is currently conducting R&D of a new of Michigan; one large group (CRRC) in 2014 to help generation of high-speed trains which • Also in 2013, it set up a joint rail them bid for international projects, promise faster top speeds and more industry R&D centre in the Czech but domestically they still operate service functions. Republic with Prague Industrial independently. University; China North Rail Group (CNR) • In 2014, it set up a bogie technology China South Rail Group (CSR) www.chinacnr.com R&D centre in Switzerland with Prose. www.csrgc.com.cn CNR’s manufacturing bases are located The largest locomotive and high-speed in North China, in cities including CNR is currently conducting R&D of a train manufacturer in China, and has Changchun, Dalian, Qiqihar, Beijing and new generation of high-speed trains, most of its manufacturing bases in Qingdao. It was founded in 2008 and including the CRH7. The CRH7 will be South China (Zhuzhou, Changzhou, listed on the Shanghai and Hong Kong the most advanced of the current CRH Wuhan and Nanjing). Founded in stock exchanges, it has 26 subsidiaries series. 2007 and listed on the Shanghai and across North China including Beijing, Hong Kong stock exchanges, it has 17 Tianjin, Dalian, Qiqihar, Harbin, China Railway subsidiaries and around 90,000 staff. Shenyang, Datong, Taiyuan, Lanzhou, www.china-railway.com.cn In 2014, turnover was RMB 119 billion Jinan, Qingdao and Yongji. It also has China Railway is a state-owned (£11.9 billion) and its exports accounted three subsidiaries in Hong Kong, South enterprise run directly under the for around RMB 25 billion (£2.5 billion). Africa and the US. central government, and is the operator of China’s nationwide network. It is Its main products include high-speed CNR’s main products are high-speed the corporation which operates and trains (CRH1, CRH2, CRH380A) and trains (CRH3, CRH5, CRH380B), manages the rail network, and drafts locomotives, passenger coaches, freight high-speed multiple units (MUs), China’s nationwide railway plans and wagons, rapid transit vehicles, multiple locomotives, passenger coaches, freight construction project plans. unit trains (MUs), as well as a full range wagons, rapid transit vehicles, railway of rail components. It has four large R&D engineering machinery and components China Rail Construction (CRCC) centres, seven national laboratories and for rolling stock. It also manufactures www.crucg1.com / nine national technology centres. mechanical and electric products, clean www.crucg2.com energy and environmental protection CRCC is the state-owned enterprise Its four R&D centres are in Zhuzhou equipment, and provides leasing that focuses on railway construction. (Hunan Province), Changzhou (Jiangsu services for rolling stock and project It has two major subsidiaries: the First Province), Meishan (Sichuan Province) management contracting services for Engineering Company of China Railway and Shanghai. It has also set up several urban rail and other related projects. Its Urban Construction Group (CRUCG) overseas R&D centres: annual turnover was RMB 100 billion and the Second Engineering Company (£10 billion) in 2014, with exports of of China Railway Urban Construction • In 2010, it set up a semiconductor RMB 20 billion (£2 billion). Group (CRUCG). R&D centre in Lincoln (investment in UK company Dynex);

04 | www.ukti.gov.uk The UK rail industry supports a strong supply chain that delivers proven solutions to rail clients around the world.

3. UK Strengths and In June 2014, Chinese Prime Minister Li Rolling Stock Opportunities Keqiang, during a visit to the UK, agreed to promote bilateral cooperation in the The UK has a lot of capabilities in rail industry, especially in high-speed the rolling stock manufacturing Rail Infrastructure and Equipment train design, rail construction and rail sector, including vehicle design and equipment. The UK also has many major engineering services; condition The UK rail industry supports a strong improvement projects (HS2, Crossrail, monitoring; major component supply chain that delivers proven Network Rail, London Underground and manufacturing; maintenance, solutions to rail clients around the city metros) that are interesting Chinese refurbishing, retrofit and upgrading world. A broad range of UK companies, investors. services; train-financing and leasing; from small independent businesses and engineering and train driver to large international original end In the signalling control and training. The UK is leading in a number manufacturers (OEM), supply products communications sector, many UK of areas on innovation and R&D, in and services across permanent way, companies support the global supply developing solutions for low-energy power and electrification, signalling chain. Siemens Rail Automation based systems, use of composite materials, control and communications, stations in the UK draws on over 140 years of vehicle design and condition and depots. history in the sector. Other UK-based monitoring. signalling expertise encompasses both The UK is recognised for the high quality train control systems and wayside Bombardier manufactures trains in and performance of their products and signalling, along with strong capabilities the UK and supports a significant services, and many of the UK’s suppliers in signalling design and installation. supply chain of UK businesses. Hitachi are world leaders, with capabilities UK companies continue to develop has announced it is to base the ranging from the provision of niche and deliver new uses of technology in headquarters of its global rail business technologies to high-volume heavy signalling control and communications in the UK as part of the accelerated manufacturing. The UK is also home to – such as Derby-based Deltarail’s globalisation of its rail systems companies such as Unipart Rail that can flagship control technology and IECC business. Hitachi is already building help clients innovate to create real firsts Scalable1. The UK’s product and service a rolling stock manufacturing facility in technologies and services, as well as offer in stations and depots spans from in the UK with a view to serving the bringing new efficiencies to their supply architectural and building products wider European market. chains. to station control systems, to train handling, maintenance and safety UK companies already export a diverse equipment. range of products that include ballast stabilisation and drainage, track, switches and crossings, rail fastenings, lightweight cable troughing, and friction Leading UK companies include: management solutions, as well as track ASL www.asl-control.co.uk plant and maintenance equipment. Camlin Rail www.camlinrail.com They also provide the full spectrum of DeltaRail www.deltarail.com power and electrification products and Pandrol www.pandrol.com services, including overhead lines and GEOfabrics www.geofabrics.com catenary, third rail and traction power Thales UK www.thalesgroup.com systems. Hawker Siddeley Switchgear www.hss-ltd.com TRE www.trerail.com Tata Steel www.tatasteelrail.com Mechan www.mechan.co.uk

www.cbbc.org | 05 More interconnection of train networks, fully intelligent management of train networks, and sustainable development of the overall rail industry.

The China Association of Intelligent Traffic recently highlighted intelligent transportation systems (ITS) as an important priority of the central government’s, and it sees the continued growth of high-speed rail as a core component. According to China Railway Group, demand for intelligent technology is forecast to be worth around RMB 100 billion (approx. £10 billion) over the next five years, including more interconnection of train networks, fully intelligent management of train networks, and sustainable development of the overall rail industry.

Rail & Signal Monitoring and Testing Equipment • Dynamic digital operating in the domestic and global markets; technology to bring Chinese companies to the China continues to purchase most • Information intelligent management UK; and to enable UK companies to monitoring and testing equipment technology compete more effectively with their from foreign companies – including • Self-detection technology German, French, US or Japanese rail switch testing equipment and • Self-diagnosis and decision making competitors. grooved rail testing equipment from technology German company V&P, and straight For more information please and rotated rail monitoring equipment The UK Rail Working Group, led by UK check: www.gov.uk/government/ from Optimess. China Railway Signal Trade & Investment, aims to match UK organisations/uk-trade-investment & Communication Company has suppliers to Chinese rail projects both developed IP in signal controls, including high-speed train control systems (CTCS-3) and city rail signal Leading UK based companies include: control systems (CBTC). However, China continues to import significant Brecknell www.brecknell-willis.co.uk elements of its rail signal control Creactive Design www.creactive-design.co.uk systems from foreign players such as David Brown www.davidbrown.com Alstom and Siemens. Alstom www.alstom.com/microsites/transport Rowe Hankins www.rowehankins.com The objectives set out in Made in Interfleet www.interfleet.com China 2025 to reduce this dependence Pickersgill-Kaye www.pkaye.co.uk on overseas full system providers Siemens www.siemens.com/rail_automation could mean opportunities for niche Ultra Global PRT www.ultraglobalprt.com UK players to help Chinese companies Unipart Rail www.unipartrail.com move up the value chain. China is Rail Interiors Solutions www.railinteriors.com open to joint R&D of certain advanced Bombardier www.uk.bombardier.com intelligent technologies, including: Hitachi www.hitachi.co.uk • Train state perception technology

06 | www.ukti.gov.uk AGRICULTURAL MACHINERY AND TECHNOLOGY

1. Industry Background and and utilisation of large, high-powered tractors, combine harvesters and Future Trends tractors have greatly benefited from cotton pickers, to attain a 60% share of the Chinese government’s recent the market . MIIT highlighted certain subsidy policies, yet smaller tractors strategic priorities and themes: China’s production of agricultural - which tend to be favoured by the machinery has grown dramatically small farming households that make over the past 10 years, particularly Five in One up the majority - continue to account driven by subsidies for the purchase for a greater share of demand. Most • Industrial scale integration of of domestically produced machinery. high-priced machinery still manages cultivation, breeding, processing and China produces more tractors, only low levels of market penetration, agricultural waste recycling combine harvesters, plant protection and in this area China is still mainly • Integration of urban and rural areas machinery and agricultural water reliant on imports. • Industrial-scale processing and pumps than anywhere else, yet it lacks recycling of agricultural waste much of the advanced technology Global weather patterns have been • Cultivation of crops to provide possessed by developed countries. very variable over recent years and feedstuff for livestock industries Furthermore, the process, speed have had an impact on farming – • Recycling of livestock waste and scale of mechanisation vary a lot particularly on volumes and prices for farming and environmental from province to province, there is of staple crops and dairy products, protection overcapacity in the production of low- where output was constrained at a end agricultural machinery, and the time of increased global demand. country continues to rely heavily on Small-Scale/Low-End vs However, there has since been a imported high-end machinery and key Large-Scale/High-End recovery in milk output at a time of components. some easing of demand, notably from Balancing the development of small- China, which has resulted in a plunge scale, low-end machinery versus large- China’s core agricultural regions are in commodity prices. scale, high-end machinery. Owing to the provinces of the central North urbanisation throughout China, rural China plains (Beijing, Tianjin, Hebei, There are other factors that affect the labour is becoming scarce and many Shandong and Henan) and the middle market such as economic conditions, rural farmers are renting out their and lower reaches of the Yangtze currency movements, legislative land, which paves the way for the use River (Hunan, Hubei, Jiangxi, Anhui, changes, land usage issues, and of large-scale farming techniques, Jiangsu, Zhejiang), which together environmental concerns. However, economies of scale in production and account for around 75% of China’s all encourage greater adaptation and high-end machinery. domestic demand for agricultural put pressure on producers to make machinery. Other regions of note are efficiencies; the structural trend is the provinces of North-East China Multi-Functional Machinery output consolidation and this is likely (Liaoning, Heilongjiang and Jilin) and to continue as cost savings are sought. Developing multi-functional Shandong Province further down the machinery such as ploughing, stubble- east coast. Because many of these China’s Ministry of Industry & clearing and fertilising. This is a key areas are flat, with sizeable expanses Information Technology (MIIT) priority – to integrate functions and of farmland, they are suited to large- has stated its aims under the MIC farming techniques and employ multi- scale agriculture. 2025 initiative are for domestically functional machinery to improve the produced agricultural machinery efficiency and intensity of farming The process of mechanisation and the to account for over 90% of the operations. application of technologies in farming market; for Chinese manufacturers have been slow, due to farmlands to be competent in producing most being scattered over several regions key high-end components; and for and different terrains and climates, domestically produced high-end, and because small-scale farming is large-scale equipment, such as still the norm in many parts. The sale www.cbbc.org | 07 There is now emphasis on adopting advanced technology and methods to improve farming productivity and efficiency and environmental protection.

Application of Precision Technology China’s Ministry of Agriculture • Mechanisation of livestock and has stated a number of regional poultry industry China is more dependent on labour priorities2: • Developing aviation use in and low technology than developed agriculture countries, and uses a large amount North-East of fertilisers and pesticides. There is • Mechanisation of the production Middle and Lower Yangtze River now emphasis on adopting advanced processes for rice, corn, potatoes • Mechanisation of rice production technology and methods to improve and soybeans, introducing large- (particularly planting) and rapeseed farming productivity and efficiency and scale, efficient machinery planting/harvesting environmental protection. • Mechanisation of harvesting beet, • Mechanisation of cultivation of producing and processing fruit and various vegetables R&D of New Farming Materials vegetables • Mechanisation of poultry farming • Upgrading machinery for rice and seafood cultivation Investment in R&D and the use of transplanting, corn harvesting and • R&D of plant protection machinery high-quality materials to guarantee deep soil loosening and processing equipment longevity and performance, • Mechanisation of the livestock and • Developing industrial-scale aviation particularly in harsh conditions. poultry farming industry solutions to manage pests on rice • Using aviation in farming/crop crops Specific MIC 2025 Plans spraying across large areas South & Southwest China • Domestic equipment for cultivating, North China Plains • Machinery for planting and harvesting, producing, transporting • Continuing the process of harvesting rice, rapeseed and and storing strategic crops (cotton, mechanisation of wheat production, sugarcane soya, rape seed, grains, cotton, oil and the application of drought- • Machinery for cultivating tea, fruit and sugar) resistant agriculture and water and forest areas • Promoting potatoes as a staple crop conservation technology • Upgrading technology for water alongside rice, wheat and soya • Improving the mechanisation of irrigation and drainage systems • High-end equipment for key harvesting corn and peanuts production and processing of meat, • Furthering R&D of machinery used North-West China dairy and vegetables in cotton seeding and transplanting • Mechanisation of corn, potato, and • Domestic large-scale tractors and • Machinery for growing fruit and cotton production combine harvesters and complex vegetables • Use of aviation for crop spraying operating equipment • Technological applications for • Application of drought-resistant and • Upgrading tracking technology breeding pigs, cows and chickens water conservation machinery and fertilising is a key priority - to integrate solutions for managing large-scale agricultural machinery, and integration of information on geography, environment, weather to maximise recycling of resources and protect the environment • Applying cloud-based internet technology, big data and Internet of Things (IOT) with modern agricultural machinery.

08 | www.ukti.gov.uk 2. Key Chinese Players Shandong Changlin YTO Group Corporation Machinery Group Luoyang, Henan Province The top 10 agricultural machinery Linxin, Shandong Province www.yto-en.com manufacturers in China are: en.changlin.net A leading agricultural machinery and The group’s main agricultural machinery construction machinery manufacturer Changzhou Dongfeng products include tractors and diesel established in 1955, and the first Agricultural Machinery Group engines (it also makes construction producer of tractors in China. Products Changzhou, Jiangsu Province machinery such as road rollers include crawler tractors, wheeled www.dftractor.com and excavators). It has established tractors, combine harvesters, diesel Established in 1952, the group cooperation with companies in Sweden, engines, road rollers, bulldozers, specialises in agricultural equipment Germany and Japan. excavators, loaders, forklift trucks, across four areas – tractors, power vehicles and mobile power stations. tillers, specialist tractor implements and Shandong Juming Group It imports advanced equipment and specialist farming equipment. It also has Zibo, Shandong Province assembly lines from the UK, Germany, a farm machinery research institute. www.sdjuming.com US, Switzerland and Italy, and exports A leading national farm machinery products to over 100 countries with Foton Lovol International manufacturer, the group’s products offices, assembly factories and spare Heavy Industry cover farm machinery, wood processing parts centres across the world. Weifang, Shandong Province equipment, combine harvesters and en.lovol.com.cn industrial vehicles. It has established Zoomlion A large-scale manufacturer of agricultural a number of R&D bases in China and Wuhu, Anhui Province equipment, construction machinery, exports equipment to countries across www.zoomlion.com vehicles and core components, South-East Asia, Africa, the Middle East The largest equipment manufacturer established in 1998 with 16,000 and South America. in China (sixth-largest in the world) employees and annual sales of around with annual sales of around RMB 30 RMB 22 billion (£2.2 billion). It sells 70% Tianjin Yongmeng Machinery billion (£3 billion), Zoomlion produces of all combine harvesters in China, and Manufacturing a wide range of specialist large-scale has the biggest market share for large Tianjin construction and transport machinery, and medium tractors. It is now one of the www.yongmengjixie.com such as cranes, and a range of fastest-growing brands in the construction It is a leading corn harvesting machinery agricultural machinery and vehicles. It machinery sector, making loaders, manufacturer which holds more than employs over 30,000 people, makes excavators and rotary drilling rigs. 30 national patents in specialist corn over 1,200 different products and owns machinery for harvesting, cutting and IP in many equipment categories. Kubota Agricultural Machinery peeling. Suzhou, Jiangsu Province www.kubota.com.cn Wuzheng Group Kubota was established in 1980 and Rizhao, Shandong Province produces a variety of agricultural www.chinawuzheng.com machinery and equipment including Established in 1961, the group is tractors, combine harvesters and rice another major agricultural sector planters. manufacturer with annual sales of around RMB 15 billion (approx. £1.5 billion), selling light-to-medium-duty agricultural equipment, trucks and farm vehicles in China and over 40 countries worldwide.

www.cbbc.org | 09 3. UK Strengths and Opportunities UK Manufacturing (units) in 2014 Units Change (YOY) The output of the UK’s agricultural

engineering sector was estimated at Tractors 12,433 -4% just under £2 billion in 2014. Around 80% (£1.7 billion) was exported and Telehandlers 3,125 +4% exports rose by 4.5% year-on-year . The Tractor loaders 3,430 -6% EU accounts for around 50% of all UK Ploughs 1,040 +7% exports. Power harrows 1,130 -14%

The world market for agricultural Sprayers (trailed & mounted) 565 +15% machinery is worth around £80 billion a Utility ATVs 6,500 19% year, with around 25% being produced Utility vehicles (side x sides) 5,300 2% in the EU and 25% in the US. China Mowers/mower conditioners 3,170 17% now produces around 15% of global Combines 800 3% output (similar to India). Annual global production of tractors is around 500,000 Self-propelled foragers 160 7% units, although there are as many as 1 Round balers 1,300 -4% million units of lower-power tractors Big square balers 310 11% produced in developing Asian countries such as China and India. Europe’s tractor output is around 200,000 units per year. The UK’s major agricultural machinery manufacturers include:

Billericay Farm Services www.bfs.uk.com Bomford Turner www.bomford-turner.com Cousins of Emneth www.cousinsofemneth.co.uk Garford www.garford.com Harry West www.harrywest.co.uk Househam Sprayers www.househamsprayers.co.uk JCB www.jcb.co.uk Knight Ltd www.knight-ltd.co.uk McConnel www.mcconnel.com Micron Group www.microngroup.com Reco www.reco.co.uk Sands Agricultural Machinery www.samltd.co.uk Shelbourne Reynolds www.shelbourne.com Spearhead www.spearhead.uk.com Teagle www.teagle.co.uk Twose www.twose.com

10 | www.ukti.gov.uk Agricultural Research need to concentrate on very accurate of extensive production, heavily reliant steering, and therefore reduces the on fertilisers, pesticides and irrigation. The UK is recognised globally as a need to employ a work force to weed. Although the country will develop its leading centre for agricultural research, Consequently, this leads to better own technology, in the meantime it will with major industry leaders such as the quality of work that can be maintained require international cooperation to John Innes Centre, the Roslin Institute, for longer periods of time and at higher advance its agricultural machinery more Rothamsted Research, the National speeds. quickly. In addition to physical products, Institute for Agricultural Botany (NIAB), China will also require consultation the National Centre for Precision UK Government Support services and smart solutions to integrate Farming and East Malling Research all key components into an efficient Station. There are also many agricultural UK Trade & Investment has an Agri- overall unit6. colleges, universities, institutes and Tech Organisation to support UK private research organisations. businesses in this sector and the UK Tertiary Industries government has announced a £17.7m Two examples of recent UK R&D Agricultural Engineering Precision China’s long-term agricultural projects are: Innovation Centre (Agri-EPI) focused mechanisation process will open up on precision agriculture to help the other opportunities for companies to The National Centre for UK’s farming sector develop advanced provide various agriculture-related Precision Farming technologies to increase productivity products and services – such as storage, Based at Harper Adams University in and sustainability4. The centres include transport, sales, rural finance and Shropshire, the National Centre for Harper Adams University, and also insurance. Precision Farming brings together the Edinburgh and Cranfield Universities. agricultural engineering manufacturing Specialist Education & Research industry, the farming sector and High-End Equipment Sales the wider scientific community. There will be opportunities in related It is investigating, developing and As mechanisation is developed more industries ranging from fertiliser disseminating new technological systematically across China, there production to education, particularly solutions to ensure precision farming is will also be other opportunities in collaboration with agricultural colleges more widely adopted. The Centre has areas such as the supply of new and universities. For example, collaborated with overseas research materials, precision technology, smart, the UK, with its major machinery teams in Japan and the USA to improve interconnected and intelligent systems. manufacturers, agricultural colleges and farming practices by combining For example, the UK Company JCB has universities and expertise in research technologies such as advanced sensors, been in China since 2004, producing and development, is well placed to satellite positioning systems and high-speed tractors and excavating develop joint projects with China to automated machinery. machinery and has established R&D and make high-end agricultural products. www.harper-adams.ac.uk training centres there5.

Robocrop New Technology & Materials Robocrop was developed and brought to market in the UK by Garford Farm It is vital that high quality materials Machinery and the specialist R&D are used in agricultural machinery company, Tillett and Hague3. It uses to guarantee durability, particularly video image analysis techniques to where the soil quality affects working identify and locate individual plants, conditions. R&D of new materials will allowing mechanical removal of weeds therefore become a key priority for on crops planted with regular spacing. China. Unlike in developed countries, The technology relieves the driver of the agriculture in China is still at the stage

www.cbbc.org | 11 AVIATION AND AEROSPACE EQUIPMENT

1. Industry Background Overseas aviation companies such Major Passenger Aircraft and Future Trends as Airbus, Boeing, Bombardier, General Electric, Rolls-Royce and The aims for 2025 include: Pratt & Whitney have longstanding • ARJ21-700 turbofan regional aircraft China’s aviation industry has developed relationships with the Aviation assembled by COMAC in Shanghai rapidly over recent years throughout Industry Corporation of China (AVIC) • MA60 and MA700 turbo propeller the whole supply chain – research, for subcontracted production, some aircraft manufactured by Xi’an Aircraft design, testing, manufacturing, repair since the 1970s and 80s. AVIC produces Company in Xi’an and maintenance – producing aircraft aircraft noses, wings, fuselage, tail • C919 single-aisle trunk aircraft in over 30 different categories. China sections, landing gear and aero- designed, developed and built by produces around 100 types of military engines, and accounted for over 90% COMAC in Shanghai aircraft, medium- to large-range of subcontracted production volume • C929 large-scale wide-body jet transport aircraft, civil helicopters, in China in 2014 – equivalent to some designed, developed and built by regional passenger aircraft and general £900 million. Some Chinese companies, COMAC in Shanghai aircraft. Its domestic manufacturing such as Xi’an Aircraft Company (XAC), fulfils 90% of China’s defence have also been involved in client R&D demands and a large proportion of Specialist and Emergency Aircraft projects for key components and parts civil aviation requirements and China while working too on subcontracted The Chinese government is looking at the has successfully developed engines, production. possibilities of opening up more low-level airborne equipment and systems. airspace which would enable a growth By 2020, China’s stated aims are in the market place for more rotary wing However it should be noted that with to have a ‘relatively complete and private aircraft. In 2015, CAAC issued the C919 commercial aircraft yet to be and competitive’ civil aircraft the Allocation Plan of China General put into operation, and the C929 still manufacturing industry, to be a Aviation Airport, which stated that there only in the concept phase, the industry major regional aircraft manufacturer, will be over 2000 GA airports across China still has some way to go to compete a world-leading supplier of aviation by 2030. The development of specialist with leading global players. parts and subcontractor of component emergency rescue aircraft and equipment production, and a major regional base is being prioritised, with the development According to Airbus, Boeing and RR, for civil aircraft retrofitting and repair. of fire/water rescue and multi-functional China is the largest market for civil aircraft also being accelerated. aircraft in the world and this status will The aim is for Chinese companies last for some time until the C919 and to compete with Airbus and Boeing C929 become competitive with Boeing Two high-end sectors also have by developing, manufacturing and and airbus. substantial long-term prospects: delivering their own single-aisle aircraft C919 and aero-engines. Production of • Improving the quality of China’s traditional aviation Helicopters: the Regional Jet, the ARJ21, and the existing helicopters, developing new manufacturing bases in Harbin, MA700 Commuter will be expanded, medium-sized and multi-functional Shenyang, Xi’an and Chengdu with medium-sized helicopters, high- helicopters and, through international developed during the 1960s and 70s. end business jets, specialist fire-fighting R&D cooperation, developing heavy- A number of new production bases aircraft and medium power turbo-shaft load transport helicopters. are emerging: in Shanghai (aircraft engines prioritised. The domestic R&D and manufacturing), Tianjin wide-body aircraft C929 is still at the • Refurbishing and (Airbus A320 final assembly and Business Jets: concept design stage, but the Chinese customising existing regional/domestic helicopter base), Zhuhai (aircraft R&D government is aiming to install China- aircraft, plus new R&D projects to and manufacturing) and Beijing (R&D made engines for the C929. develop high-end business jets for centre for COMAC called BASTRI - the international flights for high-end clients. Beijing Aeronautical Science and International cooperation will be Technology Research Institute). considered.

12 | www.ukti.gov.uk Aircraft Components 2. Key Chinese Players Space Company (EADS), which holds a and Equipment 5% equity stake. HQ is in Beijing, with China’s aviation industry is a nationally R&D and production bases in Harbin China is also looking to further designated ‘strategic industry’ (AVIC Harbin), Nanchang (AVIC Hongdu) develop its production capabilities controlled and supervised by the and Jingdezhen (AVIC Chenghe). It for engines and specialist aircraft government and led by two state- makes regional and general-purpose components, and this is likely to owned enterprises, the Aviation aircraft, aero-parts and components and present both opportunities and Industry Corporation of China electrical instruments. challenges to the supply of specialist (AVIC) and the Commercial Aircraft components for engines, specialist Corporation of China (COMAC). Many AVIC Aircraft Corporation Ltd aviation materials, aviation systems private companies, such as Zhejiang (AVIC Aircraft) and airborne equipment. Xizi Aviation Industry, have also grown www.aircraft_co.avic.com/ in recent decades. Established in 2009 with HQ in Xi’an. Has Specialist Airport Equipment 35,000 employees, with subsidiaries AVIC Aviation Industry Corporation Xi’an and AVIC Shaanxi. It manufactures China is currently building more of China (AVIC) large-to-medium-sized transport aircraft, airports than the rest of the world www.avic.com/en/ civil passenger aircraft and landing gear combined, with 33 new airports AVIC was established in 1993 after systems. and many existing airports being the dissolution of the former Ministry AVIC Engine expanded. This will present more of Aerospace Industry. It has 200 http://engine.avic.com/ opportunities for airport equipment subsidiaries, including 20 listed Established in 2009, HQ in Beijing, suppliers – such as scanning companies, and 400,000 employees. 80,000 employees, and focused on civil and security equipment, airport Its businesses include Passenger aero-engines, helicopter transmission management systems and technology, & Cargo Aircraft, Miltary Aircraft, systems, secondary power systems, gas and air traffic management Engines, Helicopters, Avionics and turbines and other derivative products. equipment. Additionally, there are Systems, Electromechanical Systems, Develops and manufactures various more routes being planned and General Aviation, Aviation Research, aero-engines and helicopter transmission opened between various parts of Flight Tests, Trade and Logistics, Asset systems including turbojets, turbofans, the UK and China as well as Chinese Management, Financial Services, turboshafts, turboprops and pistons. It investment interests in UK airports. Engineering, Planning & Construction is the only AVIC company specialising in and Automobiles. It is currently R&D of aero-engines in China. capable of independent design and the production of general light aircraft China Aviation Industrial Helicopter and military aircraft, including regional Co Ltd (AVIC Helicopter) passenger aircraft, military fix-wing http://avicopter.avic.com/ aircraft, helicopters and cargo aircraft. Established in 2009, through a JV with Tianjin local government, it has Its eight key subsidiaries are: over 15,000 employees, and focuses on the component supply, product AviChina Industry & Technology development, R&D, maintenance and Co Ltd (AviChina) servicing of helicopters in China. It http://techniques.avic.com/ produces medium and heavyweight Established in 2003 and listed on the helicopters (e.g. Z-8, Z-9, Z-11; HKSE. Major shareholders are AVIC, 13-tonne AC313, 7-tonne AC352, China Hua Rong Asset Management 4-tonne AC312, 2-tonne AC311, Corporation, China Orient Asset 1-tonne AC310 civil helicopters). Management Corporation and the European Aeronautic Defense and www.cbbc.org | 13 China’s own airlines account for around 20% of all aircraft bought worldwide.

AVIC Avionics Systems AVIC International centre for COMAC’s regional jets, large Co Ltd (AVIC Avionics) http://www.intl.avic.com/ aircraft and core components. www.avicem.cn/ The international commercial arm of Established in 2007 and HQ in Beijing, AVIC. Established in 1979, HQ in Beijing, Shanghai Aircraft Customer Service it owns 18 subsidiaries, including five with over 50 branches worldwide and Company (SACSC) research institutes. 70,000 staff in 10 over 20,000 staff. http://sc.comac.cc/ locations (Beijing, Shanghai, Jiangsu, Responsible for customer training and Henan, Shanxi, Shaanxi, Gansu, Sichuan, technical and operational support Guizhou and Shenzhen). It is mainly Commercial Aircraft Corporation of services. focused on development and production China (COMAC) of aircraft systems and equipment – with http://.english.comac.cc/ Beijing Civil Aircraft Technology fundamental business units in avionics, Established in 2008, with HQ Research Centre (BCATRC) electro-optical detection systems, radar in Shanghai and R&D centre in http://bj.comac.cc/ systems, inertial navigation systems, Beijing, COMAC is engaged in the The division for civil aircraft technology air data systems, cockpit displays R&D, manufacturing and testing of research. and control systems, on-board task civil aircraft, and the leasing and management systems, suspension operation of civil aircraft. It aims to Shanghai Aviation Industrial Group control systems, flight control systems be China’s main implementer of large Company (SAIGC) and lighting systems. passenger aircraft programmes and http://saic.comac.cc/ is responsible for developing regional Engaged in COMAC’s non-core China Aviation Industry General Aircraft jet programmes. COMAC cooperates businesses, such as leasing, asset Co Ltd (CAIGA) with the global aviation industry under management and logistics services with www.caiga.cn/ a ‘main manufacturer – supplier’ freight carriers. Established in 2008 and HQ in Beijing, model and is primarily concerned with over 50,000 employees. Three with assembly, integration, sales and Civil Aircraft Flight Test Centre bases: Zhuhai (R&D and assembly), after-sales support. Components, parts, COMAC’s division for flight testing. Guizhou (components) and Shijiazhuang engines and on-board equipment are (R&D). It is engaged in R&D, design and sourced from overseas and Chinese manufacturing of training and special suppliers – mainly AVIC subsidiaries and Zhejiang Xizi Aviation Industry aircraft and aviation equipment and a few private Chinese companies (e.g. http://en.xiziac.com/ fixed base operation (FBO). Zhejiang Xizi Aviation Industry). A private company established in 2010 in Hangzhou, Xizi’s main business AVIC Commercial Aircraft It has six major subsidiaries: includes the assembly of non-airtight Engine Co Ltd (ACAE) doors for COMAC’s ARJ-21 and C919 http://www.acae.com.cn/ Shanghai Aircraft Design and Research aircraft. It has established relations with Established in 2009 by AVIC (40% Institute (SADRI) several global aircraft manufacturers share), Shanghai Electric Group and http://sadri.comac.cc and subcontractors, such as Airbus, Shanghai Guosheng Group. Responsible The design and research centre Bombardier, EADS and GE Aviation. for design, R&D, manufacturing, final of COMAC, mainly responsible for It also has a subsidiary in Shenyang assembly, testing, sales and services and designing, testing and advanced that provides parts, components and technology consulting for commercial research of key technologies for materials for the assembly of the aircraft engines in China. One of its main regional jets and trunk liners. Cessna L162 and is providing composite goals is to develop engines for the 150- material prototypes for COMAC’s C919. seat C919 aircraft and related products. Shanghai Aircraft Manufacturing Has had an R&D centre in Shanghai since Company (SAMC) 2010. http://samc.comac.cc/ The final assembly and manufacturing

14 | www.ukti.gov.uk 3. UK Strengths and Opportunities Space Technologies China Aerospace and Science Corporation (CASC) According to data from the trade China has one of the world’s http://english.spacechina.com association ADS Group7, the UK’s most exciting space programmes aerospace sector generated £29 billion and a growing number of UK CASC is a large state-owned in 2013, with 90% from exports, and companies are working there to enterprise group with its own it is expected to continue to grow help realise them. As a global such as Shenzhou and Long at a rate of 7% a year over the next space power, China is investing March. It is mainly engaged few years. The UK has the second billions in space research and in the research, design, largest aerospace industry in the is building its own (soon to manufacturing and launch of world, with over 3,000 companies be the only) space station space systems such as launch employing around 230,000 people. Key for Earth observation and vehicles, satellites and manned manufacturing bases are in the North- space exploration. It also has spaceships as well as strategic West (e.g. Cheshire and Preston), massive ambitions for satellite and tactical missiles, and Midlands (Nottingham, Derby and coverage and a pressing need also provides international Wolverhampton) and the South-West for applications such as pollution commercial satellite launch (Bristol and Yeovil). monitoring and urban planning. services. The UK provides world-class It has now established a China Aerospace Science and technology and products for all kinds of relatively complete space Industry Corporation (CASIC) aircraft, including the wide body Airbus industry and is making R&D and www.casic.com.cn models, for which the UK produces design breakthroughs in some the wings and avionics, landing gear key areas; it is one of the few CASIC is a large state-owned hi- and the latest in cabin fitments, and countries capable of providing tech enterprise under the direct Rolls-Royce engines. The UK is one of launch vehicles, satellites, administration of the central only a few countries with the resources manned spacecraft, deep space government. It has successfully to design and manufacture advanced probes, launch services and completed every support helicopters. Major players include ground facilities. mission for the spaceflights undertaken by the Shenzhou global names such as BAE Systems, GKN and Rolls-Royce and international According to the China series, from Shenzhou-1 to companies with operations in the Aerospace Science & Industry Shenzhou-10, and played an UK, such as Airbus, Cobham, Agusta/ Corporation (CASIC), China is active part in the development Westland, Finmeccanica, Thales, already cooperating with many of the BeiDou Navigation Boeing and Bombardier. countries, including Russia, Satellite System (BDS). Brazil and some EU countries, Small specialist UK companies working including work on specific in the supply chain are important for technologies – materials, the aerospace industry; they include thermodynamics, cryogenics, a large number of SMEs supplying guidance control, thermal the UK-based aerospace industry and control and re-entry technology, exporting overseas. For example, Rolls- aerodynamics, liquid fuels, Royce creates many opportunities for telemetry, testing equipment, component manufacturers operating in satellite applications, ICT and the UK to service and maintain aircraft space biology. engines.

www.cbbc.org | 15 The UK is well placed to support China’s stated goal to place innovation at the heart of its sustainable economic growth.

The UK conducts a lot of R&D in programme and to engage with the Mergers and acquisitions the aviation sector (e.g. spending UK aerospace supply chain. • AVIC and its subsidiaries want to £1.4 billion on R&D in 2012) and • The UK supply chain can further acquire international companies with investment in this area can help engage with the R&D programmes key technologies. AVIC has already increase productivity and create new at COMAC and AVIC. There is a acquired Teledyne Continental jobs for the future. UK companies UK Aviation Working Group of Motors, Cirrus Aircraft and Align. It is are at the forefront of innovation in key stakeholders to develop these known to be looking for acquisition engines, power systems and fault opportunities. opportunities in the UK. diagnosis. Academic researchers focus on these areas in centres such as Key parts and technologies The UK’s Aerospace Working Group Nottingham University’s Institute for • The Chinese aviation industry was set up over 10 years ago. Aerospace Technology. still lags behind in certain areas, Under the management of UKTI it especially in key parts and works towards bringing the Chinese In the space sector, the UK has a technologies, and a key objective of aerospace and airport sectors leading capability in commercial MIC 2025 is to bridge this gap. together with UK companies and satellite and downstream data • Engine-part manufacturers and organisations in a government-to- processing, with over 35,000 people research institutes will receive R&D government platform with regular employed in space-related businesses. funding to develop a Chinese-made delegations and dialogues. There is This generates over £10 billion a year engine. There is also a pressing need also two other working groups: an for the UK economy, and space and for key parts such as gears, bearings Airport Working Group and Space satellite technologies are a priority in and weight-reducing and fuel-saving Working Group. the UK’s economic growth strategy. technologies. For more information see: www.gov. The UK is well placed to support Parts for wide-body aircraft-C929 uk/government/organisations/uk- China’s stated goal to place innovation • China’s own airlines account for trade-investment at the heart of its sustainable around 20% of all aircraft bought economic growth. So many of worldwide. It is working on its C929, China’s priorities under MIC 2025 a two-aisle commercial aircraft with and in advanced technology – e.g. more than 300 seats, and is looking 5G communications, the internet to partner with UK companies of things, smart cities, precision and source components and agriculture and big data – will require subassemblies to bring the aircraft space satellite hardware, applications to production. and services. Joint ventures and cooperation UK companies are expected to find • There are opportunities for more JV opportunities in the following areas: cooperation, similar to Bombardier’s with Shenyang Commercial Aircraft Joint R&D activities Company on the design and • UK companies can work with manufacture of China’s C Series Chinese airlines to ensure they have aircraft and also the Chinese-run modern fleets to maximise efficiency Airbus FAL plant in Tianjin. and reduce their environmental • UK companies have opportunities to impact. work jointly on R&D and part design • Chinese companies can establish where their expertise would be R&D facilities in the UK to develop welcomed by Chinese partners. innovative technologies and products for the Chinese aviation

16 | www.ukti.gov.uk BIOPHARMACEUTICALS AND HIGH-END MEDICAL EQUIPMENT

1. Industry Background years. With Chinese manufacturers Biopharmaceuticals currently not being able to meet and Future Trends demand, China is an attractive market China was the second largest for foreign medical device companies. pharmaceutical market in the world There is growing expenditure on Whilst competition is strong, many in 2014, with over 5,000 companies healthcare and the life sciences thanks international companies are finding producing active pharma ingredients to government reforms aimed chiefly at success in niche, high-end segments (API) and manufacturing drugs, addressing the ageing population. There of the market such as radiology or according to government data are more and more opportunities for UK ultrasound equipment. Other products released by the China Food and Drug companies and the size of the market in demand are: high-precision liquid Administration (CFDA). Compared to is vast: according to the World Health sealed pots; sterility tanks and heat the global market, China’s domestic Organisation, China accounts for over exchangers; vacuum pumps; advanced pharmaceuticals industry is dominated three million newly diagnosed cancer automatic packing machines, mixers and by non-originator ‘bio-similar’ cases each year (22% of the world grinders; microbial testing machinery; producers. total) and around 230 million Chinese and endoscopy and advanced spotlight currently suffer from cardiovascular devices. Foreign manufacturers regularly disease. It predicts that China will spend cooperate through outsourcing around RMB 6.6 trillion (approx. £660 Chinese medical device companies arrangements with Chinese companies billion) on healthcare from now until are moving away from being OEM in the early stages of development 2020. manufacturers or distributors for foreign in order to reduce costs. In terms of partners, and are instead investing in selling into China, one major challenge Chinese healthcare providers and their own R&D facilities, upgrading for foreign companies in China is the equipment manufacturers are being their manufacturing equipment and process for registration with the CFDA, encouraged to adopt high-performance processes, and looking to market their which can take years of testing before diagnostic technology, manufacture brands in their own right. Some Chinese companies can sell products in China. with green technology, and venture medical devices are already being sold overseas for R&D, manufacturing and globally; for example Mindray (www. The Chinese government is aiming to market development. The government mindray.com), a Shenzhen-based tackle areas that it believes are holding hopes that domestic companies can medical device company specialising back development, such as clinical build a better domestic manufacturing in medical imaging equipment, has research and the lack of advanced base, generate their own IP and established sales offices and an R&D technology. Currently the main launch Chinese brands in the global operation in the UK. opportunities for foreign companies market. Chinese overseas investment are related to R&D and technology in healthcare technology is growing, Although many Chinese companies transfer, and MIC 2025 aims to support and the UK is seen as a preferred are still mainly in the mid-to-low-end industry development in the following destination. Many Chinese companies segment of the market, MIC 2025 aims key sectors: are now setting up UK branches and to move them higher up the value cooperating with UK partners. chain, focusing on products such as: • Chemical Medicine (new chemicals; • High Performance Medical Devices antibodies; antibody conjugating Medical Devices (imaging equipment; medical robots) medicine) • High Value Medical Consumables • Traditional Chinese Medicine (TCM The Chinese medical device market (degradable vascular stents) with clinical advantage; personalised is the fourth largest in the world. Its • Mobile Medical Equipment (wearable treatment) value was estimated at approximately devices; telemedicine) • Biotechnology Medicine (new RMB 250 billion (£25 billion) at the • New Techniques (biological 3D structural protein and polypeptide end of 2014 and is expected to grow printing; induced pluripotent stem drugs; vaccines) at 15-20% per annum for the next 10 cells)

www.cbbc.org | 17 2. Key Chinese Players the Chinese medicine industry. Kanion’s Shanghai Hengyi Group Traditional Chinese Medicine (TCM) www.hengyi-sh.com/en Mindray Medical Intelligent Factory has been selected Hengyi is mainly engaged in research as a pilot project by the Ministry of www.mindray.com and development of advanced Mindray is a medical device company Industry and Information Technology. If pharmaceutical machinery, which is dual-headquartered in both it is able to develop its technology, the electronics, and related software. the US and China. Mindray is already intelligent factory will likely transform Its major products are tablets, well established in the UK and within the methods of TCM extraction which capsules, bottle-packing assembly the NHS. It is seeking opportunies may reduce the cost of production lines, and supplying high-pressure in the UK to obtain leading-edge significantly. medical testing apparatus, leakage technology. current apparatus, grounded electric Hainan Poly Pharm resistance testing, electric safety Fosun Group http://english.hnpoly.com testing apparatus and medical A high-tech enterprise focusing on www.fosunpharma.com injection testing. A group which owns business units medicine production and sales since in both life sciences and healthcare, 1992, Hainan Poly specialises in injections Shanghai Waton Shanghai Fosun Pharmaceutical has and solid formulation, and has passed Pharmaceutical Machinery its own R&D, manufacturing and European and WHO verification, and www.eastchinagroup.com distribution channels. In 2013 it is preparing for certification by the US Based in Shanghai, Waton is engaged invested US$ 5 million in UK Oxford Food and Drug Administration (FDA). The in the design and fabrication of Immunotec and it is seeking other company focuses on data distribution pharmaceutical machinery to Good M&A opportunities in the UK. for real-time systems particularly in Manufacturing Practice (GMP) sustaining and controlling release standard. Its major products are Neusoft Medical Systems technology, taste masking technology bottle-washing machines, filling and insoluble injection technology. www.medical.neusoft.com machines, power filling machines, A manufacturer of medical equipment It has established a pilot project for capping machines, labelling machines, and provider of medical services simulations, and a data collection system cartoning machines, lyophilised and a wholly-owned subsidiary of for advanced model control. In addition, (freeze-drying) machines and ovens. Neusoft Corporation, the largest IT it has developed a manufacturing Its products are exported to South- solutions and services provider in execution system (MES) and an East Asian countries including China, Neusoft’s products are sold enterprise resource planning system Malaysia and Vietnam. globally. They include PACS/RAS, a (ERP) to improve resource allocation. medical system combining a variety of functions ranging from medical imaging, transmission, storage, Leading Chinese enterprises producing pharmaceutical diagnosis, and IT. Neusoft’s PACS products include: was selected as an intelligent manufacturing pilot project in 2015 China Resources Medications Group, Beijing - www.crpharm.com (one of the 46 pilot projects under Guangzhou Pharm, Guangzhou - www.gzmpc.com MIC 2025). Haerbin Pharm, Harbin - www.hayao.com NorthChina, Shijiazhuang - www.ncpc.com Kanion Pharmaceutical Qilu Pharm, Jinan - www.qilu-pharma.com www.kanion.com Sichuan Kelun Pharm, Chengdu - www.kelun.com A producer and supplier of herbal Fosun Pharma, Shanghai - www.fosunpharma.com medicine and dietary supplements, SinoPharm, Beijing - www.sinopharm.com Kanion’s products are sold in Tianjin Pharm, Tianjin - www.pharm.com.cn around 50 countries, and it has Yangtze River Pharm, Taizhou - www.yangzijiang.com R&D capability ranked second in 18 | www.ukti.gov.uk 3. UK Strengths and Medicines and Healthcare Product global and market opportunities in a Regulatory Agency (MHRA) coordinated programme of activity for Opportunities UK companies. Extensive research and UK government support has focused on consultation has been carried out with UK The UK is regarded as a world leader several priority areas, such as improving and international networks to craft the in GMP, GCP and GLP, overseen by the research infrastructure, streamlining campaign programmes to fully represent Medicines and Healthcare Products approvals for clinical research and and position UK capacity and capability in Regulatory Agency (MHRA) in the UK encouraging data holders to improve a global platform. and complying with international OECD the codification, standardisation and 8 legislation . openness of health data. All of this • Digital Health: Focusing on the UK’s support is likely to further improve the capability in telehealth/telemedicine, Good manufacturing practice (GMP) industry environment in the UK and make medical imaging, sensors and is the minimum standard that a British companies more competitive wearables and health and wellness medicines manufacturer must meet globally. A recently published industry apps. in its production processes. Products guide ‘The New UK Life Sciences • Experimental Medicine & Clinical must be of consistent high quality; be Prospectus’ details how UK life science Trials: Linking service providers with appropriate to their intended use; and companies are innovating in all aspects international companies planning to meet the requirements of the marketing from genomics and cell research to MRI9. sponsor drug, vaccine, or med-tech authorisation (MA) or product It has case studies and outlines the steps development work. specification. the UK government is taking to encourage • In Vitro Diagnostics: Segmenting the investment and collaboration – including market focus for UK IVD companies in Good clinical practice (GCP) is a set investment opportunities, funding the three areas of platform providers, of internationally-recognised ethical initiatives and incentives. products and kits and supply chain and scientific quality requirements technologies. that must be followed when designing, UK Life Sciences Organisation • Making Tomorrow’s Medicines: conducting, recording and reporting www.lifesciences.ukti.gov.uk Promoting the UK’s competitiveness in clinical trials that involve people. Based on the principles of connecting advanced manufacturing technologies Organisations that may have to comply supply and demand, this series of for small molecules, biologics and with GCP include pharmaceutical ‘high value campaigns’ aims to present advanced therapies. companies; contract research organisations; universities; NHS hospitals; charities; GP clinics; and Leading Chinese enterprises producing medical devices include: clinical laboratories.  ACF Group, Beijing - www.acfgroup.com Good laboratory practice (GLP) applies Andon Health, Tianjin - www.andonhealth.com to the pre-clinical work of any test Changchun Dirui Medical Technology, Changchun - www.dirui.com.cn facility which conducts, or intends to Guangdong Biolight Meditech Company, Guangdong - en.blt.com.cn conduct, regulatory studies. They must Improve Medical, Guangzhou - www.improve-medical.com comply with good laboratory practice Lepu Medical, Beijing - www.lepumedical.com (GLP) regulations when carrying out Meheco ,Beijing - www.meheco.com safety tests on pharmaceuticals; Microport Medical, Shanghai - www.microport.com.cn agrochemicals; veterinary medicines; Mindray Medical, Shenzhen - www.mindray.com industrial chemicals; cosmetics; Neusoft Medical, Shenyang - www.medical.neusoft.com additives for human food and animal Shanghai Medical Equipment Factory, Shanghai - www.shmef.com feed; or biocides. Weigao Medical, Shandong - www.weigaogroup.com Well Tech, Shenzhen - www.wellkj.com Yuwell Medical, Nanjing - www.yuyue.com.cn SonoScape Technology, Shenzhen - www.sonoscape.com.cn

www.cbbc.org | 19 UK research funding Scottish Enterprise: MIC 2025 Sector Opportunities Providing grants for investment projects There is a wide range of UK funding via the Regional Selective Assistance A core part of the MIC 2025 initiative is bodies for UK health and life-science funds, Scottish Enterprise also has to transform Chinese companies from research, including: grants to support commercially viable basic OEM suppliers into global brands translational research projects (up to able to sell their own products in global National Institute for Health Research and including early phase clinical trials) markets. As a result there will be an (NIHR), Invention for Innovation: led by both research organisations and increase in demand for UK expertise The National Institute for Health companies. in industrial design, and knowledge Research (NIHR), Invention for of UK and European registration and Innovation it aims to support and Invest Northern Ireland: intellectual property environments to advance the development of innovative Offering some of the most attractive support European operations. medical technologies, and their incentive packages in Europe, Invest translation into the clinical environment Northern Ireland provides financial Existing demand from Chinese for the benefit of patients in the NHS support to help set up a company, along companies for advanced manufacturing in England and Wales. It is a patient with comprehensive advice to facilitate partnerships with UK companies is focused source of early or late-stage the investment process. Invest Northern likely to increase both for the Chinese product development funding for R&D Ireland also supports commercial domestic market and for global exports. collaborations between UK healthcare clinical trials that benefit from the During the process of transition academics, clinicians and industry. Health & Social R&D clinical research Chinese companies will be looking for infrastructure. partnerships. UK Research Partnership Investment Fund (UK RPIF): Life Sciences Investment Fund (Wales): International R&D collaboration is The £300 million fund is managed by A £100 million fund created for the also increasing, and the Chinese the Higher Education Funding Council life science sector in Wales. The new government has committed to investing for England, will lever more than double fund will contribute to an already well- RMB 10 billion (approx. £1 billion) this from private investment into established Welsh life science sector in med-tech research by 2020. UK higher education research facilities and that employs over 15,000 people in companies can partner with Chinese stimulate strategic research partnerships more than 300 businesses, contributing counterparts across the whole value between university, businesses and around £1.3 billion to the economy chain including core R&D, product charities. Several projects relevant to annually. design, product registration in Europe, life science were announced in 2012, and manufacturing and distribution, securing £146.5 million from the fund. in addition to opportunities around Venture Capital Chinese investment into the UK. Biomedical Catalyst: A £180 million fund designed to Many new life science venture capital The UK has a strong compliance culture deliver growth to the UK life science funds have been formed in the UK, and few product recalls – which means sector. Delivered jointly by the Medical providing additional early-stage less risk to a company’s supply chain and Research Council and Innovate UK, the investment. This increase of funds will to global patient access. It also offers Biomedical Catalyst provides responsive help both start-ups and more mature businesses proximity to customers, and effective support for the best life companies to develop commercial gateways to markets and a solid export science opportunities arising in the UK opportunities. Two examples are The foundation, including international and seeks to support opportunities that Welcome Trust’s Syncona Fund and influence in health and global standards; demonstrate the highest scientific and Index Ventures. solid and dependable legal and IPR commercial potential, irrespective of systems; and excellent logistics and medical area. transport links, a launchpad to Europe and international markets.

20 | www.ukti.gov.uk A core part of the MIC 2025 initiative is to transform Chinese companies from basic OEM suppliers into global brands able to sell their own products in global markets.

Catapults and UK supply chain in the application and development UK Investment Opportunities partners help with process of clean room technologies and development and scale-up, and associated areas. It is also looking to Recent activity around Chinese the Accelerated Access Review can stimulate and improve efficiencies investment into the UK market in further speed up and simplify product in its manufacturing. The REMEDIES search of technology, product lines development, registration, and Project (RE-configuring MEDIcines and sales channels, has been matched getting products to patients. In UKTI End-to-end Supply) was launched in by British investment into China – for benchmarking studies, the UK comes 2014, led by GSK with research by the example, Boots’ recent investment out strong, offering lower operating University of Cambridge’s Institute in Nanjing Pharmaceutical with an costs than might be expected and for Manufacturing. It brings together interest in pharmaceutical logistics high after-tax profitability, and it rates players throughout the supply and distribution, and other companies highly for quality. chain to develop technology-based which are looking at the opportunity applications underpinned by two to invest in large-scale R&D, testing, The UK is also actively exploring platform projects: clinical trials supply and general market access. This trend the use of novel materials in chains, led by GSK, and commercial is likely to continue and expand under the manufacturing of medical supply chains, led by IfM. MIC 2025. devices and in pharmaceutical and biomedicine production. In addition, it has significant expertise

Example: Cell Therapy Catapult Centre

Location: Guy’s Hospital, London

Purpose: To build on the UK’s global leadership in the development, delivery and commercialisation of cell therapies. It was established in recognition of the need for concerted long-term translational activities in order to realise the full value of cell therapies.

Key activities: Taking products into the clinic, de-risking them for further investment; clinical expertise and access to clinical partners in the UK health service; perfecting the centre as a source of regulatory expertise; providing technical expertise and infrastructure to ensure products can be made according to good manufacturing practice (GMP) and delivered cost-effectively; generating national and global opportunities for collaboration; providing access through its network to business expertise, grants and investment finance.

Focus Areas: Investible therapies; clinical data; developing intellectual property; manufacturing processes/regulatory pathways with viable business models; standards and quality systems; developing skilled, trained and experienced professional staff.

Success Stories: The Cell Therapy Catapult can claim significant progress in the following areas: airway diseases10; working with a leading UK cell therapy company on its flagship product11; multi-party BloodPharma consortium to develop ‘synthetic blood’12; Big5 EU market access roadmaps for cell therapies.

For more information visit: https://ct.catapult.org.uk13

www.cbbc.org | 21 CCBI/CRMI Technology Centre at validating new technologies for testing It will focus on making the UK the the University of Oxford of potential medicines before they are most compelling location in the world trialled in people and supporting the for the development and delivery During the State Visit to the United UK’s key strengths in pharma, biotech of this new targeted approach. The Kingdom by President Xi Jinping in and contract research organisations. country has a competitive position October 2015, it was announced that The goal for the Catapult is to grow in precision medicine, based on its CCBI (a wholly-owned subsidiary of the UK’s commercial preclinical scientific excellence and £1 billion of China Construction Bank) would be capability with a view to improving research infrastructure investment partnering with China Regenerative productivity in drug development and from the government over recent Medicine International (CRMI) and approval, to make it the leading place years. By focusing on the main the University of Oxford to establish worldwide to develop and launch new bottlenecks to product delivery, the the CCBI-CRMI Technology Centre products and services in this space. Precision Medicine Catapult will at the University of Oxford. It will work with the precision medicine provide £1.5 million of project funding Precision Medicines Catapult community to build a thriving industry to the Centre to accelerate research https://pm.catapult.org.uk/web/ generating economic and healthcare and its translation into treatments, precision-medicine/about-us benefits. and improve operating and training Innovate UK has established a new capability. CCBI will also provide innovation centre, the Precision Established in April 2015, in its first assistance to help find investment of Medicine Catapult, by combining year of operations the Precision RMB 60 billion to support translation accurate diagnosis with rules-based Medicine Catapult is developing and industrialisation of research therapies and effective service and testing its plans for tackling the outcomes. delivery. Precision medicine is industry bottlenecks - around business expected to transform medicine in the models, test development, clinical The project is a good example of how coming decades, improving outcomes trial networks, data services and Chinese organisations are looking for patients and the healthcare healthcare service delivery. to achieve MIC 2025 objectives, system. £14 billion has been put on in this case relating to building the global market for tests, therapies capacity in regenerative products, and solutions, and this is expected to through international investments grow to £50-60 billion in 2020. and partnering. The project also demonstrates how UK capability can be core to the MIC 2025 initiative and also support the UK objectives of strengthening British research with potential for export overseas, and attracting inward investment into the life science area.

Medicines Technologies Catapult www.catapult.org.uk/medicines- technologies-catapult The new Medicines Technologies Catapult will support industry in developing new technologies primarily for the preclinical evaluation of medicines. It will operate at the earliest stages of medicines development, developing and

22 | www.ukti.gov.uk POWER EQUIPMENT AND TECHNOLOGY

1. Industry Background In nuclear power, China is investing billion), which promises an excellent heavily with impressive results at development environment where and Future Trends home and abroad. Whilst President new, international-standard systems Xi Jinping’s state visit to the UK in will be required – an opportunity for Each year since 2006, China has October 2015 included a number of UK companies. added in excess of 100 GW in power key announcements, perhaps the The domestic industry is relatively generation capacity. In 2014, China most high profile was the investment advanced and Chinese-manufactured had the largest installed electricity by China General Nuclear Power power equipment includes large generation capacity in the world (CGN) for a 33.5% stake in the 3.2 GW power generation set equipment, UHV with 1505 GW, and generated 5583 Hinkley Point C. The deal included a transmission and transformation set TWh. It has the world’s largest further agreement for joint work on a equipment and set equipment used installed capacity for thermal power, planned power station, Sizewell C in in smart grids which have reached hydropower, wind power and solar Suffolk, and a majority stake for CGN international standards. power (with an installed capacity of 43 in a third planned power station at GW). Traditionally dependent on coal, Bradwell in Essex. These include: which supplies around 80% of the energy mix, non-fossil fuel is expected China is not only investing in the UK Power Generation Equipment: 1,000 to keep increasing its share by 1% per Nuclear industry. Its companies have MW Ultra Super Critical (USC) Coal- annum over the next decade, with over recent years heavily invested into fired Generation Units, 700MW+ wind, solar and nuclear making up North Sea offshore oil and gas assets Hydroelectricity Generation Units, most of this new supply. as well as into offshore wind and tidal 1,000MW Nuclear Power Units and energy. China owns roughly 12% of 300MW F-Class Heavy-duty Gas Despite all the new capacity, North Sea offshore oil and gas assets. Turbine Units. the power industry has a major China’s State Development Investment challenge in distribution. Coal power Corporation (SDIC) acquired a £185 Transmission and Transformation generation is traditionally in the north, million stake in UK offshore wind Equipment: 1,000 kV UHV AC hydropower in the west and much of assets including a 25% stake in the Transmission Equipment, ±800 kV the new wind power in the north and Beatrice Project and 100% ownership UHV AC Transmission Equipment and west, whereas the greatest demand of the Inch Cape project, both in Equipment in Smart Grids. is still in the south and east. Coastal Scottish waters. nuclear plant construction, together Key Core Component and Parts: with a developing offshore wind and Although the rate of growth in Safety Valves in USC Generation Units marine energy industry, will play a demand for electricity supply in China and Large Nuclear Power Units, Circuit part but the answer to date is the has fallen to about 5% year-on-year, Breakers in Large Power Generation construction of both AC and DC UHV this does not mean that investment Units, and many Silicon Controlled power transmission lines. This also into power generation or supply Rectifiers. has the added benefit of not requiring will also slow. The construction of coal to be transported from the north a smart power grid, UHV and new The MIC 2025 aims are that, in and allows for new coal and other energy will drive the development general, China’s power equipment plants to be constructed away from of the power generation equipment reaches international standards, and it centres of high population, which industry: total investment in China’s has a complete R&D system for power relieves some of the urban pollution smart power grid is expected to supply covering all energy sources. problem. China currently has over exceed RMB 1 trillion (approx. £100 Aims are that the domestic equipment 600,000km of UHV transmission lines billion) by 2020, with over RMB 400 for transmissions and transformation with many being in the east, south billion (£40 billion) in UHV. From 2011 will meet the demands of the China and centre. to 2020, total investment in China’s grid, and the domestically produced new energy industry is expected equipment accounts for 95% of its to surpass RMB 5 trillion (£500 needs.

www.cbbc.org | 23 China has fully embraced renewable energy equipment production, with the world’s largest installed capacity for the supply of major renewables.

Coal-fired Equipment • Safety and sophistication of nuclear 3. High-head (+700m) 400MW Class equipment to reach the highest pump turbine units MIC 2025 objectives are: international standards 4. 5MW-and-above Wind Power • Capability of exporting complete sets Generation Equipment • Enforcing environmental-protection of nuclear units. technology for coal-fired units Transmission and Transformation • Raising the energy conversion Equipment to be developed: Set Equipment efficiency of generation units • Ensuring ultra clean emissions from 1. CAP1400 Nuclear Power Set Transmission and transformation of coal-fired generation units Equipment power is a particular challenge in • The market share of 3rd market 2. hualong One Nuclear Power Set China where distances are large and engineering contracts for complete Equipment the majority of production is located coal-fired systems should be 3. very-High-Temperature Reactors far away from the majority of demand. increased (VHTR), High-Temperature-Gas- Foreign companies continue to Cooled Reactors (HTGR) dominate some core aspects of UHV Equipment to be developed: 4. Sodium-Cooled Fast Reactors (SFR) transmission and so MIC 2025 calls 5. Liquid Fluoride Thorium Reactors for China to develop a comprehensive 1. 1000MW USC and Ultra Clean (LFTR) command of the design and Emission Coal-fired Units manufacturing technology of UHV 2. 600MW-and-above USC and SC Coal- Renewable Energy Equipment AC/DC transmission set equipment; fired Boilers (in Xinjiang East Junggar to increase the technological level Basin Coal Mine) China has fully embraced renewable of transmission and transformation 3. 600MW USC Circulating Fluidised energy equipment production, with the equipment; to develop new types of Beds (CFB) world’s largest installed capacity for the high-temperature superconductivity 4. 300MW F-Class Heavy-duty Gas supply of major renewables. The MIC transmission and transformation Turbine Units 2025 initiative recognises that it needs equipment; and to implement a 5. 400MW G/H-Class Heavy-duty Gas to develop its infrastructure to generate, programme aimed at increasing the Turbine Units store and distribute a variety of energy efficiency of power equipment 6. Large Coal-fired Unit Control Systems renewable energy types, and includes: including transformation equipment.

Nuclear Power Equipment • Support for innovation to develop 1. 1000kV UHV AC Transmission Set new smart grid equipment Equipment Nuclear power generation has seen • Proprietary production of large- 2.800kV+ UHV DC Transmissions Set a resurgence, partly in response capacity energy-storage equipment Equipment to increasing pressure to reduce • Large-scale applications for distributed 3.200kV+ Flexible DC Transmissions dependence on coal-fired generation, renewable energy in order to meet System and Set Equipment and as such MIC 2025 includes many energy restructuring requirements 4. Equipment in Smart Grids specific development goals for this • Comprehensive mastery of 5. Environmentally-friendly and industry including: technology for large-scale hydropower Highly-efficient Transmission & units. Transformation Equipment • Proprietary innovation and 6. High Power Electric and Electronic industrialisation of nuclear Power equipment to be developed and Components equipment manufactured includes: 7. High-temperature and Super- • Development of proprietary industry conductivity Transmission & equipment for nuclear power 1. 1000MW Super Large Capacity Transformation Equipment systems Hydroelectricity Generation Units 2. +700m Super High Waterhead Impact Water Turbines

24 | www.ukti.gov.uk Key Components, Materials and • Research into the reliability of 11. High-efficiency and Low-cost Air- Supporting Systems transmission and transformation set cooled Systems (1000MW-grade). equipment and its adaptability to 12. v ariable-speed Pump-Water MIC 2025 is also designed to special environments Energy-Storage Generation Units overcome the bottlenecks that are • Development of testing and 13. variable-speed Pump Water preventing China’s power equipment verification platforms of large- Turbines manufacturing industry from capacity electric and electronic set 14. Large-scale and Highly-efficiency developing from a ‘manufacturing equipment Solar Power Heat Absorbing, giant’ into a world ‘manufacturing Energy Management Systems power’ with the ability to influence Equipment to be developed: 15. Vaporisation Devices for Biomass global supply chains, standards and Energy and Waste Generation industry norms, which is a core goal of 1. Heavy-duty Gas Turbines 16. Circuit Breakers for Large-capacity the initiative. MIC 2025 objectives aim 2. high-temperature Component and Generation Units to overcome these bottlenecks by: Control Equipment 17. Smart Modules used in Smart 3. large-scale Nuclear Power Transmission & Transformation • Development of proprietary R&D Pressurised Vessels Equipment of key components and parts of 4. Vapour Generation Units 18. Annular Tube used in High-voltage power equipment and materials; 5. Cooling Agent Pumps DC Transmission accelerated development of testing 6. Driving Devices for Control Sticks 19. Metal Thin-film DC Capacitors and verification platforms for power 7. large-scale Nuclear Gas Turbine 20. High-voltage and High-power equipment Welding Rotors IGBT Modules used in Flexible DC • Development of design, R&D and 8. h igh-temperature Gas-cooled Transmission testing and verification systems for Reactors 21. Insulation Material and Electric heavy-duty gas turbines of 300MW 9. Sodium-cooled Fast Reactors Alloy and above 10. Key Equipment of High- • Development of key manufacturing temperature Gas-cooled Reactors, techniques for high-temperature Sodium-cooled Fast Reactors blades used in gas turbines

www.cbbc.org | 25 2. Key Chinese Players NARI Group www.narigroup.com Shanghai Electric There are approximately 7,000 The NARI Group has eight research www.shanghai-electric.com power transmission and distribution institutes, one R&D centre and 16 Shanghai Electric is the leading companies in China’s power industry subsidiaries, and its major projects machinery manufacturing group in supply chain alone. Some of the key include Electricity Transmission from China, integrating the substation, players are listed on this page. Further Sichuan to East China, the System power transmission, distribution company information across the Safety and Stability Control System of and heavy machinery sectors. Its market, including company lists for the the Three Gorges Electricity System main products include 1000MW USC power subsectors, can be found on the and the Protection Project on UHV and Coal-fired Units, 1000MW Nuclear website of the Chinese Chamber of HV Power Systems. Generation Units, and distribution and Commerce for the Import and Export transmission equipment. China’s first of Machinery and Electronic Products. Shandong Electric Power 6000kW Coal-fired Unit, first 300MW http://www.cccme.org.cn/ Equipment Corporation Nuclear Unit and first 10MW-class USC (State Grid) Coal-fired Unit were all manufactured Dongfang Electric www.speco.com.cn by Shanghai Electric. www.dongfang.com.cn Formed in 2009 by the State Grid Dongfang Electric is state-owned and Corporation of China, it designs, XJ Group (State Grid) its main power generation equipment manufactures, sells, maintains and www.xjgc.com covers thermal (various types of steam tests power transformer products. XJ Group is part of the State Grid and is turbines); hydro-electric (flow and involved mainly in power generation, impact generators); wind, nuclear and It provides power transformers, distribution and transmission. It gas. It is also engaged in R&D of flue converter transformers, smart created China’s first 500kV UHV gas desulphurisation and dentrification transformers, shunt and smoothing Transmission Line Protection equipment for power plant boilers. reactors, all-fibre current transformers, Equipment, China’s first Nuclear Power and various types of electricity Unit Protection Equipment, China’s first Harbin Electric distribution equipment, wind power 1.5MW Wind Power Generation Unit Main Control System, as well as the www.hpec.com and amorphous alloy transformers. Its Harbin Power Equipment Company products are exported to Asia, Africa, world’s first ±800kV, 5millionkW UHV Limited was formed in 1994 through Latin America, North America and the DC Transmission Control Protection the restructuring of Harbin Power European Union. System. Plant Equipment Group Corporation (HPEGC), the oldest large-scale power plant equipment manufacturer in China. Listed on the Hong Kong and Shanghai stock exchanges it is the largest manufacturer of power plant equipment in China. They currently have an annual design production capacity of 5,000MW, of which 4,000MW is in thermal power equipment and 1,000MW in hydro power equipment. The group possesses advanced production and research facilities.

26 | www.ukti.gov.uk 3. UK Strengths and Also UK companies are researching for new nuclear developments, and new hydraulic transmission systems for China has increasing capability in reactor Opportunities turbines, innovative blade manufacturing design and development. techniques, the operation and The UK has a highly developed market maintenance of crane systems and the Due to the lifecycle of the UK’s nuclear across all sectors of power generation, application of various techniques to power stations, the industry is currently distribution and management, and process gas and oil and operate deep-sea well developed in terms of nuclear safety there are currently a broad array of wind power plants, all areas in which and reactor decommissioning, and there opportunities for UK-China collaboration Chinese firms are lacking or lagging is increasing demand for expertise in and trade. behind. this area in China. In terms of fusion technology, the Culham Centre for Wind Power Generation Equipment Chinese developers and design institutes Fusion Energy (CCFE) is the UK’s national are currently seeking support for the laboratory for fusion research, based The UK has strengths in wind power design of electrical infrastructure, in Oxfordshire. CCFE hosts the world’s generation. To generate a low-cost the development of operation and largest magnetic fusion experiment and offshore wind industry, however, the maintenance strategies and risk-based the Joint European Torus (JET) on behalf UK supply chain will need to increase project integration. China is also keen of its European partners. its capability and capacity, which to continue reducing the total cost of offers substantial opportunities for turbines, in particular the installation Opportunities are likely to include: 14 overseas investment . China on the of multiple turbines, and so there are other hand is in great need of design currently opportunities in advanced • Manufacturing precision material and manufacturing for wind turbine vessel technology and design for the components such as pumps, valves and generation systems, offshore wind installation, operation and maintenance sensors power transmission, offshore wind of wind turbines. • Plant instrumentation and control measurement, wind farm design, systems installation engineering, access solutions Finally, there is also considerable demand • Fire detection and protection and maintenance services, which means for advisory services in relation to equipment ample opportunities for UK-China offshore wind farms, to enable China to • Accumulators cooperation. exploit its own offshore wind resources • Heat exchangers and upgrade its capacity in wind power • Fuel manufacturing and handling Development of a strong offshore wind generation as part of MIC 2025. systems supply chain is a key priority for the UK. • Key interlock systems Supply-chain services that will be in high Nuclear Power • Radioactive waste management demand include: turbine components systems and foundations; undersea cabling; The UK currently has nine nuclear power • Heating, ventilation and air high-voltage electrical equipment; and stations, with 16 reactors that account conditioning (HVAC) systems composite materials. for 19% of the electricity generated, • Automated inspection of high integrity and employs 44,000 people. The plans structures The UK’s long experience and deep are to develop around 16 GW of new • Major components for the nuclear sector knowledge in the wind power nuclear power with 10 new reactors by island (reactors, pumps, pressurisers, generation industry is also currently in the mid-2020s. The investment by China steam generators) demand in China, where for example General Nuclear Power (CGN) for a 33.5% • Safety-critical pipework and cooling most Chinese MW-class wind turbine stake in Hinkley Point C was announced systems generator manufacturers remain at during the recent state visit and further • Induction bending of large-diameter the R&D or prototype stage and many agreements for joint work on planned thick-walled pipes local component manufacturers/ power stations across the UK, show • Turbine generators service providers are not fully capable of that the UK is open to overseas nuclear • Nuclear engineering design for meeting the sector’s needs. investment, that there is strong support specialised components

www.cbbc.org | 27 Chinese investors and partners • Smart meters – design, integration, UK Smart Grid Forum Portal may find more information about communications, infrastructure and uksmartgrid.org investment into the British nuclear data management The UK Smart Grid Forum Portal (SGFP) industry on the UK government’s • Distributed generation – medium has been established as a hub for smart website: www.gov.uk/government/ and small scale systems grid education and information for publications/civil-nuclear-power-in-the- • Intermittent generation, buffering industry, government and other key uk-investment-opportunities and storage stakeholders. • Solid state transformer development Transmission and Transformation (Energy Networks) Research Networks and Support

Across the transmission network there Energy Networks Association are significant opportunities for trade www.energynetworks.org and investment15: The Energy Networks Association (ENA) represents network operators for gas • Distribution and storage, smart and electricity in the UK, and aims to grids, offshore energy connection, influence UK government policy and high-voltage electrical equipment, industry investment. substations and automatic distribution systems

Example: Energy Systems Catapult

Location: Birmingham Business Park

Purpose: The Energy Systems Catapult supports companies and the government in developing products and services to address new commercial opportunities created by the transformation of UK and global energy systems, such as electricity, heat and combustible gases.

Focus Areas: • Localised energy systems • Heat network solutions • Integration of energy storage • Demand-side management • Advanced control solutions

Key Projects: In its early stages, the Energy Systems Catapult aims to create a critical mass for business and research innovation, focusing on electricity, heat and combustible gases. This Catapult enables businesses to access expertise that would otherwise be out of reach, as well as conducting their own in-house R&D. It also helps businesses to access new funding streams and points them towards the potential of emerging technologies.

The Energy Systems Catapult will bridge the gap between research, industry and government, helping to commercialise the outputs of the UK’s world-class research base. The Catapult also complements and links with other programmes already managed by Innovate UK to promote collaboration between universities and business, drive innovation and find commercial opportunities for new technology and ideas.

For more information visit: www.es.catapult.org.uk

28 | www.ukti.gov.uk HIGH-END MANUFACTURING CONTROL EQUIPMENT AND ROBOTICS

1. Industry Background Computer Numerical of Robotics (IFR)17 reported that out Control Tools (CNC) of the 250,000 industrial robots which and Future Trends were sold globally in 2014, 57,000 were Overall it is estimated that China’s produced in China, mostly by global “The MIC 2025 initiative prioritises high-end CNC system market will companies like Fanuc, Yaskawa, Kuka developments across the have demand for 12 million units and ABB. manufacturing control equipment with a market value in excess of RMB industry including simple machine tools 300 billion (approx. £30 billion) from Chinese government investment (open loop control system products, 2016 to 2020. In order to meet this in the industry continues to grow; simple shape products), common requirement, many local governments for example in 2015, the municipal machine tools (half-closed control have issued policies to promote R&D government of Shenyang set up a system, complex shape, 1 micron investment and increase production to robotics fund with RMB 20 billion precision) and advanced machine compete with established production (£2 billion) to build the Shenyang tools (fully-closed control system, 0.1 centres like Shenyang. Robotic Industry Union, Shenyang micron), in addition to specific support Robotic Research Centre and Shenyang for 3D printing technology. At present, most CNC tools Robotics College18. are applied in the machinery, According to the China Machine Tool electronics, automotive, aviation, Whilst Chinese companies are 16 & Tool Builders’ Association , there aerospace, textile, metallurgy, coal, considered competitive with global are over 5,000 enterprises engaged telecommunications and shipbuilding giants in some areas of industrial in China’s machine tools industry, industries. With significant applications robotics (welding, harsh environmental with a combined production value in shipbuilding, large-scale power plant tasks, nuclear dismantling), the of RMB 800 billion (approx. £80 equipment, detection equipment, country still lags behind in the service billion). China has been the largest metallurgical equipment and robotics market (cleaning, mowing the machine tools manufacturer in the automobile manufacturing, China is lawn, maintenance) and in scientific world since 2002; however it is not a leading player in the supply chain service robotics (gene samplers and the leading manufacturer of advanced of all these industries and part of the sequencers, systems to design and manufacturing systems and machines MIC 2025 strategy will be to take a run experiments). However, over the as it still lacks advanced manufacturing higher share of value created in the next five years, Chinese players such technologies and advanced computer manufacture of related products, as Siasun, Guangzhou ST Sail Industrial control systems. Germany, Japan, Italy through more advanced CNC capability. Robot Co Ltd (STS), Effort Triowin and and the United States are currently GSK are expected to increase their the leading numerical machine tools Robotics market share. Articulated robots have manufacturers as 70% of their machine also seen increasing growth in the tools are numerically controlled, and Although China’s economic growth Chinese market with extensive usage in 60% of these countries’ CNC tools is currently slowing, its robotics the automotive sector. The production are exported. Currently, only 30% of industry is seeing healthy growth. In of selective compliance assembly robot China’s machine tools are numerically the current market, there are over arms and parallel robots is expected to controlled and only 10% are exported. 1,000 companies engaged in robotics increase too, due to demand from the Most of the core components are still manufacturing and the market value is electronics, semiconductor and food imported from developed countries predicted to be worth over RMB 300 and beverage industries. such as Germany, Italy, Japan, Taiwan, billion (approx. £30 billion) from 2016 South Korea and the United States. to 2020. The International Federation

www.cbbc.org | 29 Most of the core components are still imported from developed countries.

3D Printing (Additive intelligent product, moving towards Beijing Tiertime Technology Co Ltd Manufacturing) more self-detection, long distance self- www.tiertime.com adjustment and repair. Created by Professor Yan Yongnian, a In contrast to its increasing capability pioneer of 3D printing technology in in CNC and robotics, China has few Dalian Machine Tools Group China, the company’s products include established 3D printing enterprises and www.dmtg.com desktop 3D printers, industrial 3D it is looking now to rapidly improve Formed by a merger of several Chinese printers, 3D scanners and consumables. its technology in this field. The State machine tools enterprises in 1995, Their Up Series desktop 3D printer is Council has recognised the challenge DMTG has introduced advanced being exported to the UK, US, Russia, and Premier Li Keqiang supported technologies from Germany, Japan, Australia, Japan and South Africa. specific 3D printing events in 2015 South Korea, US, UK, Israel and which emphasised the importance of Switzerland. It has more than 40 Hunan Farsoon Technology this technology in the MIC 2025 plan19. subsidiaries, which includes eight joint www.farsoon.net ventures with overseas partners. It In 2004, Farsoon developed the fastest Whilst still in its infancy, the 3D printing cooperated with the 600UK Group industrial 3D printer in China, aiming to industry is developing along the same in 2002 on frequency conversions compete with advanced global players lines as other markets with a focus on to adjust the lathe speed of DMTG like Makerbot and CubeX. mould manufacturing, industrial design products. It has also set up many joint and other moulds, continued research ventures with foreign companies: GSK into jewellery and footwear solutions, OKK (Japan) to manufacture high-end www.gsk.com.cn and further complex solutions for vertical and horizontal processing GSK is one of the largest industrial the industrial design, construction, machines; Berger (Switzerland) to robot manufacturers in south China. engineering, automotive, aerospace, produce the electric spindle and dental and medical industries. high-speed spindle; Heiniger (US) to Guangzhou ST Sail Industrial produce guide rail protection and CNC Robot Co Ltd (STS) 2. Key Chinese Players protection; and Fuji (Japan) to produce www.stsrobot.robot-china.com CNC machine cutters. DMTG acquired STS is a large-scale industrial robot the world-leading milling and boring manufacturer. Since 1995 the industry has seen some machines tools enterprise Zimmerman consolidation with two large machine in 2004, and recently developed two tools groups emerging in North China. Effort Triowin intelligent industrial robot products In 2011, one of the groups, Shenyang www.triowinrobot.com – DRH and DRV – for the automotive Machine Tools, became the largest It is a palletising robot and delta robot industry. machine tools manufacturer in the manufacturer. world. Siasun Robot & Automation Co Ltd Shenyang Machine Tools Co Ltd www.shsiasun.com/en www.smtcl.com Siasun’s product series includes SMTCL is located in Shenyang, industrial robots; automatic guide Northeast China with over 5,000 vehicle products; automatic warehouse employees. It introduced most of equipment; automatic test equipment; its advanced CNC technologies assembly lines; rail transit automation from German companies such as products; cleaning automation Siemens, and in 2006, it acquired products; energy equipment Schiessag Machine Tools, a German automation products; and intelligent CNC machine tool manufacturer. services robots. It is a specialist in cutting, milling, boring and drilling machines, and it has recently developed an i5 Series 30 | www.ukti.gov.uk 3. UK Strengths and development of 3D printing in aerospace. Machine Tools The Aerospace Research Centre and Opportunities National Centre for Net Shape & The UK has longstanding expertise in the Additive Manufacturing opened in June machine tools industry including cutting Computer Numerical Control 2015 at the Manufacturing Technology tools and workholding equipment, Tools (CNC) Centre in Coventry. 3D printing has metrology equipment, CAD and CAM revolutionised the aircraft industry, systems. These systems are integrated The UK has a strong R&D background efficiently producing plastic parts to with machine tools to comprise in the CNC tools and robotics industry replace traditional metal fixtures, and complete systems that manufacture with many of the world’s leading the Aerospace Research Centre will a wide variety of products, making university research departments in this develop 3D printed components for the sector fundamental to the UK’s field. One recent project which may aircraft engines and landing gear, as well economy, despite its relatively small size. influence precision manufacturing is as automotive and medical devices. the Science of Sensor Systems Software However, competition to commercialise The manufacturing technology sector in 20 (S4) programme led by Imperial the technology is fierce: in 2015 the US the UK employs approximately 10,000 College London and the Universities company Local Motors 3D-printed a car, people across both manufacturing and of Glasgow, Liverpool and St Andrews, whilst Japanese companies are moving distribution, and revenue in 2013 was which is looking into the development of ahead with a variety of applications. approximately £1.6 billion. More than intelligent sensor systems. The project 80% of products were exported. China received funding of £4.2 million and the In 2015, President Xi Jinping visited is the largest export market for UK- research deadline is 2021. Imperial College London and received manufactured machine tools, and the a 3D-printed ‘Great Wall of China’ third largest for cutting tools. China-UK cooperation in the field is using advanced nanotechnology, well developed, for example China developed by the UK’s Hamlyn Health Machine tool manufacturers and cutting DMTG Group is working with a UK Robotics department and printed by tool companies are located across the company called 600 Group on frequency NanoScribe. Chinese companies are UK, with the former concentrated in conversions to adjust the lathe speed of very keen to adopt the latest techniques the Midlands and West Yorkshire, and DMTG’s products, and using Edgecam in 3D printing and we see cooperation the latter in the West Midlands and CAM software to improve its digital opportunities in areas where the UK is around Sheffield. Further information design capability. The UK’s Giamite strong, including 3D printing materials, can be found on the website of the has set up a precision manufacturing environmentally friendly 3D printing and UK Manufacturing Technologies company in Hangzhou. high-speed/high-precision 3D printers. Association21.

Specific areas of potential for UK-China cooperation in the field include: new generation sensors, robot joint reducer technology, high-end AC servo motors, precision reducers, CAM systems, electric control systems and multi- channel CNC manufacturing technology.

3D Printing

British researchers have been the first to develop 3D printing technology in a variety of fields from chocolate to planes and artificial liver tissue, and the UK government has strongly promoted the

www.cbbc.org | 31 INTEGRATED CIRCUITS AND NEW GENERATION INFORMATION TECHNOLOGY

1. Industry Background 2015, mobile data and internet services reduce China’s almost complete reliance brought in RMB 150 billion of revenue, on imported technology. and Future Trends up nearly 40% year on year. The focus of MIC 2025 includes: The Ministry of Industry and Information Further information on the general Technology (MIIT) is implementing status of China’s ICT market can be found • IC design capabilities and MIC 2025 in parallel with its ‘Internet in CBBC’s recent industry report. development of IP cores and design Plus’ project, which aims to further tools integrate the internet into traditional Three major industries have been given • Support for companies like manufacturing industries. Theses related priority within the New Generation Spreadtrum in the development of efforts aim to improve quality and Information Technology section a core universal chip that complies production efficiency and capacity. of the MIC programme, namely: with information and internet integrated circuits (IC), information security requirements China has made breakthroughs in and communication equipment (ICE), • Improvements in adaptability of the ICT manufacturing industry including and operating systems and industrial domestically manufactured chips new UHF RFID chips (China’s satellite software. • High density and 3D micro-assembly communications programme), R&D of technology smart devices, and mass data storage, Integrated Circuits • Packaging and testing whilst many other project developments • Supply chain for key manufacturing are at a primary stage. Apps used in China has the world’s largest consumer equipment transportation, logistics, environmental market for electrical products such protection, healthcare, security and as smartphones and laptops, but Information and Communications protection, and power control are now although there are many IC design Equipment commonly adopted. Four Internet and manufacturing companies, their of Things (IoT) development clusters quality often lags behind that of global China is relatively strong in this field, have been set up in support of the leaders. China still relies on overseas IC and exports products and services programme, in the Bohai Sea Rim companies such as Qualcomm and Intel globally. Due in part to national security (Beijing and surrounding provinces), and as intellectual property (IP) licences concerns, Chinese companies hold a the Yangtze River Delta (Shanghai and are often held by the overseas parties, strong advantage in their home market surrounding provinces), the Pan-Pearl Chinese manufacturers are required to and this is not expected to change in the River Delta (Guangdong province) and pay substantial IP licensing costs. The foreseeable future. China does however the mid-west region of China. Chinese government believes that this is lack cutting-edge technology in this holding back industry development, and sector and thus it is a main focus of the MIIT has also been implementing a therefore is encouraging the IC industry MIC 2025 plan including: ‘Broadband China’ strategy, accelerating to develop its own technology, IP, and the development of a high-speed industry standards. • Core technology for new algorithms, broadband network, and promoting high-speed networks and storage, network speed improvements and cost Tsinghua Unigroup is a good example and ensuring security systematically reduction. The network is expanding of the approach that China is taking • 5G mobile telecommunications, rapidly and by the end of June 2015 in this area. A spin-off from Tsinghua core routing exchange, hypervelocity there were 210 million fixed broadband University in Beijing, this state- and large capacity intelligent photon network users with over half having controlled group recently bought rival transmission (nominal) access rates of over 8Mbps semiconductor firms Spreadtrum • Quantum computing and neural and 20% over 20Mbps. In mobile the and RDA Microelectronics, and then networks growth is even more impressive and received a 20% investment from Intel to • High-end servers, large storage there are now over 674 million mobile collaborate on developing chips for the devices, routers, intelligent broadband (3G/4G) users including 230 mobile industry. The stated aim of the terminals, base stations and network million on 4G, whilst in the first half of group is to develop indigenous chips and security

32 | www.ukti.gov.uk Operating Systems and information, public security, railways, had an annual business revenue Industrial Software air transport, satellite, software and of approximately RMB 3.71 billion service, integrated circuit and energy (approx. £371 million). The industrial operating systems electronics. CETC’s gross revenue market is dominated by overseas in 2013 was RMB 120 billion (£12 Huawei Technologies companies, although there are billion). www.huawei.com several Chinese companies that are Founded in 1987 and headquartered developing and promoting their own Eastern Communications (Eastcom) in Shenzhen. Its operations cover Linux-based systems with government www.eastcom.com most subsectors of the ICT industry. support. In the manufacturing sector Established in 1996 and Huawei’s products, services and software is often connected with headquartered in Hangzhou, Eastern solutions are available in over 170 related machines or parts, and China Communications is a state-owned countries and regions across the lags behind the international level of listed company that focuses on mobile world. Huawei also has established advanced manufacturing with most communication solutions and covers companies in the UK, Germany, the essential technology being imported financial electronic products such as United States, Japan and Canada. or manufactured by international POS systems and ATMs. Eastcom has In 2014, Huawei’s global revenue companies that have bases in China. developed its own Surface Mount reached RMB 288 billion (£28.8 Technology (SMT) and equipment, billion) with growth of approximately The MIC 2025 plan focuses on: and provides manufacturing services 20% from 2013. to other companies. In 2014, Eastcom • Core industrial software and operational systems in the security sector • High-end industrial software for design and simulation tools, manufacturing services and industrial data processing • Industrialisation and systemisation of indigenous industrial software

2. Key Chinese Players

China Electronics Technology (Group) Corporation (CETC) www.cetc.com.cn Headquartered in Beijing, CETC22 was founded in 2002 by the central government. CETC owns 58 subsidiaries, amongst which seven are listed on global stock exchanges and rank highly in their industry. Hikvision (www.overseas.hikvision. com), a Hangzhou-based subsidiary of CETC, is a well-known player in the surveillance industry and exports its products worldwide. CETC has offices in 18 provinces and regions across China. Its business covers government www.cbbc.org | 33 The UK’s strengths cover the full range of software applications from core legacy industrial software and operating systems to advanced data analytics and niche applications.

3. UK Strengths and years25. In particular, opportunities for to large Chinese manufacturers Chinese companies to work together looking to stay at the cutting edge. Opportunities with UK partners developing solutions • Operating systems and industrial in the UK market which can be applied software are largely still dependent The European Information Technology to industrial upgrading in China include on legacy international machines Observatory rates the UK as one of software as a service (SaaS), storage and applications and therefore the world’s most sophisticated ICT and sharing, unified communications many opportunities exist for 23 markets . The UK’s strengths cover (telephone, online chat) and video- UK companies with experience the full range of software applications conferencing. in legacy code development, from core legacy industrial software technology maintenance, and and operating systems to advanced The UK also leads the world in custom machines or applications. data analytics and niche applications. technology for the service industry, International companies are investing including customer relationship Development of new generation considerable sums in UK R&D and management (CRM), marketing telecoms infrastructure about 100,000 software companies are automation tools, social media currently operating in the UK. Giants management, email marketing • The industry in China is highly like Microsoft, IBM and HP all have a and web analytics, all of which will regulated, but UK companies long history of successful operation be essential for Chinese players to and universities could work with in the market and often see the UK as develop their global support, sales and Chinese stakeholders to develop a base for supporting European and marketing systems. 5G technology in support of the global expansion. MIC 2025 initiative, and work with Feedback from UK ICT companies Chinese players in the UK and third The UK’s mobile market is the largest interviewed for this report was markets to develop global systems in Europe with a value of £14 billion consistent in that MIC 2025 is seen and standards, a key stated goal of annually and 80 million mobile as an opportunity for the industry. IC MIC 2025. subscriptions, more than the UK’s total design companies such as ARM and • Trade opportunities for UK population. As a result, companies Sondrel, which do not manufacture companies will also grow are increasingly looking at new chips but contribute core advanced when China further opens the opportunities for innovation in mobile design and technology, and hence telecommunications sector, for technology in order to improve the do not compete directly with example through MVNO licensing, experience of mobile consumers, and Chinese giants, have a role to play in and links can be established now to use the UK as a base to develop supporting them to build capability. with pilot activity within the world-leading products and solutions, Edwards Vacuum, which makes relatively open Shanghai Free in particular around next generation 5G essential vacuum technology for Trade Zone for example, or in technology – where Surrey University, semiconductors, flat panel displays and third markets through the Belt & for example, is developing a testbed LEDs - have already seen an uptick Road Initiative (on which CBBC has with Huawei and other overseas in demand, commenting:“We are produced a separate report which partners. receiving enough orders to operate outlines opportunities in ICT). 24 hours with three shifts, and our Cloud computing is another UK products will be essential to industrial Integration and standardisation strength with a market size of £6 billion upgrading in China.” of data, data openness and in 2014 and it offers many investment advanced analytics opportunities for global companies. Core hardware and software 18% of UK SMEs use cloud computing applications • Although the market leaders services and a further 30% plan to use are now relatively sophisticated, 24 them in the next 12 months . 81% of • Integrated circuits technology from expertise in building and managing established cloud users in the UK plan British IC design firms such as ARM advanced HPC/cloud/data to increase cloud usage over the next 2 or Sondrel is extremely valuable centres will still be in demand

34 | www.ukti.gov.uk as expectations of performance, Online industrial applications and The Green Grid efficiency and global integration secure communications www.bcs.org/category/2 increase. The Green Grid is a non-profit • Data openness, standardisation, • Secure networks, mobile software organisation working to improve the data analytics and other advanced and device development for efficiency of data centres and business software and services will be vital Chinese mobile payments and computing systems. as companies seek to generate logistics handling are areas of UK value from datasets being expertise and will be essential to Datacenter Dynamics generated from IoT technology the integration of SMEs into the www.datacenterdynamics.com and hyper-connectivity. This will supply chain. A full-service business-to-business be especially true of Chinese SMEs • Support services including (B2B) information provider which which do not have access to the fintech applications to underpin organises events specifically to help latest technology but are looking the integration of financing and professionals who design, build and to build products and services for e-commerce; mobile apps with operate data centres. global markets. industrial applications; and online • UK expertise in machine learning, education and video to support Energy Services and Technology artificial intelligence and data cross-industry communication, Association (ESTA) modelling is likely to be more in training, and quality control are www.esta.org.uk demand as Chinese players seek also areas of potential. The UK’s leading energy management to upgrade their capabilities in industry association focuses on the commercialising data. Mergers and acquisitions demand-side energy efficiency of buildings, building services and process Internet of Things infrastructure • There is strong demand from services. Chinese companies looking for • UK companies may support overseas technology to integrate Cloud Industry Forum Chinese stakeholders to design IoT into their existing platforms, for www.cloudindustryforum.org sensors and machine to machine example Huawei’s acquisition The Cloud Industry Forum promotes (M2M) software development, as of Neul Cloud Computing, and the adoption and use of online cloud- well as system integration. investment and incubation projects based services by businesses. • Smart grid and smart energy announced during the state visit of networks are a key part of the President Xi Jinping in 2015, which techUK infrastructure that will underpin are aimed at developing ‘China- www.techuk.org the MIC 2025 initiative and ready’ technology in the UK. techUK provides a collective voice for UK companies are well placed its members and drives the relationship to provide support in the Research Networks and Support between government and business. development and integration of metering and power distribution British Computer Society Data systems. Centre Specialist Group (DCSG) • Trade opportunities also exist in www.bcs.org/category/1 cutting-edge technologies such as The DCSG works with the UK, EU and advanced sensors and RFID, system North American legislative bodies integration and open platform to ensure the data centre industry is technology. focused on improving energy efficiency.

www.cbbc.org | 35 Example: UK Digital Catapult

Location: London, Brighton, Bradford and Sunderland

Purpose: The Digital Catapult’s vision is to rapidly advance the UK’s best digital ideas from concept to commercialisation to create new products, services and value, specifically to help businesses unlock new value from sharing proprietary data in faster, better and more trusted ways.

Focus Areas: • Closed organisational data: Creating secure environments that allow organisations to safely mix their closed data and open it up to data innovators • Personal data: Helping to overcome the challenges of creating trust in the use of personal data • Creative content: Unlocking new value in the creative industries by making the reuse of creative content easier • The Internet of Things (IoT): Including being a convening force in creating large scale IoT demonstrators

Digital Catapult is currently working on significant projects in key areas including: EuroCPS, a European funded project that provides SMEs with IoT platforms supported by several design centres

5G - Communication Networks for 2020

Environmental Data Exchange

Energy Midata Taskforce – a programme to allow energy consumption data to be automatically accessed by consumers

For more information visit: http://www.digitalcatapultcentre.org.uk/about/

36 | www.ukti.gov.uk ADVANCED MARINE EQUIPMENT AND HIGH-TECH VESSELS

1. Industry Background as general contractors for projects, energy recycling, clean energy and Chinese companies tend to act as renewable energy technology. and Future Trends sub-contractors, whilst regional competitors in Korea and Singapore, • Development of intelligent China’s marine engineering equipment for example, are gradually entering vessels: by using automation manufacturing sector has grown into the global general contractor technology, internet significantly in recent years. The market. Only Offshore Oil Engineering communication technology Chinese government has, over is able to act as a general contractor – and Internet of Things (IoT) the past five years, prioritised the in projects by China National Offshore technology, the automation of domestic manufacturing of strategic Oil Corporation (CNOOC), of which it is cabins, sailing, equipment and new marine equipment, and so a subsidiary. loading. China’s share of the global market grew from 20% in 2012 to over 40% As a result, most orders handled by • Development of testing in 2015. Within the sector, in 2015 Chinese companies only cover the equipment: building capability around 50% of orders were for oil and manufacturing of equipment used in for marine engineering gas exploration equipment, and 50% projects; they are unable to access equipment testing, inspection and for marine engineering supportive high value-adding processes such as certification. vessels. Self-elevating drilling sourcing, engineering and servicing. platforms and semi-submersible China remains heavily reliant on • Domestic IP ownership: of drilling platforms are the two major foreign designs, unlike its Asian integrated, intelligent and product sources from which these competitors such as Singapore, where modulised design and building new orders came. 80% of self-elevating drilling platforms technology for key corollary are domestically designed, and China equipment. In spite of the fast growth of recent is also at a competitive disadvantage years, in terms of volume and total in terms of management and technical By 2020 it aims to: value of orders, the domestic marine capabilities. engineering equipment market is still • Have an integrated value chain - dominated by low-value products China is now focusing on moving up design, assembly and construction, in China, which markedly hampers the value chain in certain aspects of equipment supply, servicing and the profitability of the industry. manufacturing high-tech vessels, and engineering equipment; Additionally, the recent global the MIC 2025 initiative prioritises: • Rank first globally in terms of downturn in the overall shipbuilding major design and manufacturing industry and falling oil prices mean • Development of high-tech equipment and develop basic that these sectors are now facing and high value-added vessels: design technologies to world- substantial challenges at the volume improving the capability to build leading standards; end of the market. LNG and LPG ships, achieving • Achieve a 40% market share technological breakthroughs for domestically designed and China has not yet developed its high- in luxury cruisers and actively constructed marine engineering end marine engineering equipment advancing the R&D of new-energy equipment and high-tech vessels; sector, such as drilling platforms ships and those used in the new • Achieve market share of 60% in for ice zones, Tension Leg Platforms channels around the North Pole. key systems and equipment in (TLP), Spar and Liquefied Natural high-tech vessels with independent Gas Floating Production, Storage and • Development of energy-saving design and construction; Offloading (LNG-FPSO). vessels: focusing on hull line • Establish R&D centres and design, structure optimisation, manufacturing bases for offshore Unlike overseas competitors such drag and consumption reduction, oil exploration; as McDermott (US) and Technip efficient propulsion technology, (France), which are capable of acting emission control technology,

www.cbbc.org | 37 There are likely to be opportunities throughout the marine sector in China for UK companies in marine communication and electronics.

• Achieve self-sufficiency in the • Possess R&D capability and China Merchants Heavy Industry supply of key marine engineering implement testing applications (Shenzhen) equipment and for 500m for selected equipment including www.cmhicom.com underwater operations; exploration equipment for Focuses on self-elevating drilling • Generate R&D breakthroughs in oceanic mineral resources and gas platforms and has annual sales of key technology and exploration hydrates, exploration equipment around £3 billion. equipment for oceanic mineral for oceanic renewable energy, resources and gas hydrates, wave including wave energy and tidal Dalian Shipbuilding Industry Co Ltd and tidal energy, and seawater energy, as well as exploration www.dsic.cn desalination. equipment for seawater A subsidiary of CSIC, China Shipbuilding desalination; Industry Corporation produces self- By 2025, it aims to become • Complete a digital, internet- elevating drilling platforms, and reports an influential manufacturing based, intelligent, green design sales of £2 billion per year. powerhouse, which includes the manufacturing system. following specific steps: COSCO Shipyard www.cosco-shipyard.com • Have at least five world-famous 2. Key Chinese Players Based in Dalian, Liaoning Province, its manufacturing enterprises capabilities are in Floating Production and become a world leader in China’s top five marine manufacturers Storage and Offloading (FPSO) certain aspects of design and are: modification and construction, and manufacturing technology; annual sales of around £1 billion.. • Completely realise the self- China International Marine sufficient supply of key marine Containers Group (CIMC) Shanghai Shipyard equipment and for 1500m www.cimc.com www.sh.cssc.net.cn underwater operations; Based in Yantai, Shandong Province, Shanghai Shipyard concentrates on • Achieve breakthroughs in key its capabilities are in semi-submersible manufacturing drilling ships, and technology for the design, drilling platforms, and it reports annual annual sales of around £1.5 billion. manufacturing, testing and sales of around £3 billion. installation of 3,000m underwater operations;

Example: Chinese Pilot Project

The Jiaolong Deep Sea Research Submersible

Jiaolong is a manned Chinese deep-sea research submersible that can dive to a depth of over 7km, reported to be more than any other manned research vehicle in the world26. In 2011, it reached a depth of 4km on a five-hour mission that included chemical, physical and biological research. A year later, it reached a depth of 7 km in the Mariana Trench in the western Pacific Ocean.

38 | www.ukti.gov.uk 3. UK Strengths and China for UK companies in marine New Materials communication and electronics. (for the marine sector) Opportunities The UK is very strong in this area, as exemplified by companies such as There are also likely to be opportunities Marine Equipment and Inmarsat, which provides data services for more high-end ships requiring High-Tech Ships to users worldwide. new materials and also design work in using new materials – such as alloys The UK’s marine industries benefit and composite materials. For example, enormously from the competitive Leading UK companies include: China’s Ministry of Transport has strengths that they have built up over highlighted a need there for aluminium many years. These include a world A&P Group alloy ships to replace many older leading R&D and academic base, a www.ap-group.co.uk carbon fibre ships for salvage and wealth of technical knowledge and rescue work. This has already led to skills (including marine engineering, Alicat business for the UK company Carmac naval architecture, shipbuilding and www.alicatworkboats.com Design which, with a Chinese company, complex systems integration) and a recently won a contract from the very strong international reputation for Babcock Marine Ministry of Transport to design 14m quality (especially in naval platforms www.babcockinternational.com and 20m salvage and rescue ships as a and equipment, marine leisure and trial project. emerging marine renewables). Cammell Laird www.clbh.co.uk Offshore Renewable Energy – As a result of the UK government Vessels & Equipment leading the way worldwide in licensing Chemring Marine offshore wind, wave and tidal energy www.chemring.equip4ship.com Demand for secure and sustainable generation, together with the UK’s low-carbon energy sources is providing research strengths, a significant Hamworthy a new market in offshore renewable opportunity is opening for UK www.wartsila.com/hamworthy energy. The UK is a world leader in companies in the offshore renewables licensing offshore wind energy sites market. Kelvin Hughes and developing wave and tidal energy www.kelvinhughes.com devices. It is also home to world-class Much of the UK’s strength in the sector testing centres such as the European comes from its legacy in merchant Lloyds Register Marine Energy Centre, the National shipbuilding. UK companies have www.lr.org Renewable Energy Centre and strong intellectual capabilities and Qinetiq. Important opportunities lie physical infrastructure in this field. Rolls-Royce in optimisation for manufacturing and The expertise and facilities are now www.rolls-royce.com installation, and in the operation of being used for new markets, such as offshore energy farms. offshore renewable energy, and being SELEX adapted to new client needs. Marine www.selexmarine.com systems and equipment are a major part of the UK’s exports. Whilst the South Boats naval equipment sector is important, www.southboatsiow.com the global merchant shipping industry provides a massive market for commercial systems and equipment.

There are likely to be opportunities throughout the marine sector in

www.cbbc.org | 39 Offshore Renewable Energy – the US-headquartered company that exploration of oceanic oil and gas and Vessels & Equipment owns Carnival UK (formerly Princess natural resources, offshore operations Cruises) for joint investment of £2.6 support equipment, marine space Demand for secure and sustainable billion in a venture which will be based resource development equipment, low-carbon energy sources is providing in Shanghai. Shanghai Waigaoqiao comprehensive testing and inspection a new market in offshore renewable Shipbuilding Co Ltd (SWS), a subsidiary platforms and core supporting energy. The UK is a world leader in of CSSC, aims to deliver the first Chinese- equipment. The Chinese government licensing offshore wind energy sites made luxury cruiser by 2020. is placing greater emphasis on ocean and developing wave and tidal energy energy and resources, which we expect devices. It is also home to world-class Lloyd’s Register was also invited by will create new opportunities for UK testing centres such as the European SWS to deliver training on luxury British companies. Marine Energy Centre, the National cruisers, which includes general Renewable Energy Centre and information on cruisers and the cruiser In 2015, the UK’s IT Power Group Qinetiq. Important opportunities lie market, production line design, cruiser (www.itpower.co.uk) which supplies in optimisation for manufacturing and design, manufacturing guidelines and equipment for ocean energy and installation, and in the operation of standards, risk control and supply chain resource exploration and utilisation, offshore energy farms. management. co-hosted an event in Zhoushan, Zhejiang Province, with the Power Cruise Liners and Luxury Yachts There are over 10 other shipbuilders in China Huadong Engineering and China China, in addition to SWS, which have National Renewable Energy Centre, China is keen to improve its capability stepped up their plans to enter the luxury supported by the China National Energy in the design, development and general cruiser market. China still has a lot of Administration. The event highlighted UK assembly of high-tech and value-added ground to make up in this field, and UK expertise as well as China’s demand for vessels. The cruise liner and luxury yacht companies with unique strengths in the much wider use of ocean energy. sub-sectors are two specific areas which design, development or other aspects of China continues to focus on, aiming for high-tech vessels, and in particular luxury substantial technological breakthroughs. cruisers, have an opportunity here. Leading UK companies include: Aquamarine Power In 2013, Wanda Group acquired the Ocean Engineering Equipment www.aquamarinepower.com UK yacht manufacturer Sunseeker, and Deep-Sea Robots which marked China’s entry into the BiFab premium leisure marine market. The China is aiming to make up ground www.bifab.co.uk emerging Chinese market is providing quickly in the ocean engineering new opportunities for international equipment field, and particularly in GL Garrad Hassan companies, and Chinese buyers are deep-sea robots. In 2015, China South www.gl-garradhassan.com looking at other UK-based companies, Rail (CSR) Times Electric acquired for example Princess Yachts International the UK company Specialist Machine Marine Current Turbines (www.PrincessYachts.com), the Anglo- Developments (SMD), which is the www.marineturbines.com French yacht manufacturer based in world’s second-largest supplier of Plymouth, which makes a range of deep-sea robots and a leading deep- Pelamis Wave Power fly-bridge yachts (42 to 64 feet), motor sea machinery equipment supplier. www.emec.org.uk yachts (72 to 98 feet), super yachts (105 This acquisition enables CSR to access to 130 feet) and sports yachts. the deep-sea robot market and to take Tidal Generation (owned by Alstom) advantage of SMD’s expertise and global www.alstom.com In 2015, China State Shipbuilding network. Corporation (CSSC), in conjunction with Xodus China Investment Corporation (CIC), Other key areas that China is keen www.xodusgroup.com signed an agreement with the Carnival, to upgrade include equipment for

40 | www.ukti.gov.uk NEW AND ADVANCED MATERIALS

1. Industry Background Priority sub-sectors: • New inorganic non-metallic materials: advanced glass and and Future Trends • Special metallic functional ceramics; building materials; materials: rare-earth functional artificial lenses The focus on developing new materials materials (magnetic, luminescent, and integrating them into the hydrogen storage, catalytic); rare- • High-performance fibres and manufacturing process is not a new metals (tungsten-molybdenum, composite materials step for the Chinese government. It tantalum-niobium, nuclear-grade implemented major programmes in rare-metal, precious metals, • Leading-edge new materials: the 1980s and 90s, the 863 Programme semiconducting and photovoltaic); superconductors; nanomaterials; and later the 973 Programme, which functional alloys (high- biological and smart materials were national initiatives to push performance, advanced energy forward technology within mainly storage, new copper alloy, hard • Fine chemicals: pesticides, state-owned enterprises, as well alloys, new metal fibres/porous, dyestuffs, coating, new chemical as the Torch Programme and, to a metal powders) materials and rubbers lesser extent, the Spark Programme to stimulate technical developments • High-end structural metal Fine chemicals were also highlighted in including the adoption of new material materials: high-quality speciality the Five-Year Plan to 201527, including technologies. The results of these steels (for use in nuclear the objective for Chinese-made programmes were mixed, however. power, high temperatures, chemicals to achieve revenues of RMB high-performance automotive 1.6 trillion (approx. £160 billion) and China’s last Five Year Plan (2010- applications); and light alloy account for 80% of the market by 2020. 2015) also highlighted several specific materials (e.g. aluminium alloy, new materials which the industry magnesium alloy and titanium should adopt as a priority: special alloy) metallic functional materials, high-end structural metal materials, artificially • Advanced high-polymer materials: synthesised high-end polymers, new rubbers, plastics, organic-silicon inorganic non-metallic materials, material; high-performance high-performance composites, and fluorine material, functional emerging materials under research. membranes

The aims of MIC 2025 are:

• To increase the performance of China’s materials to advanced international standards • To reduce the energy consumption of basic raw-materials manufacturing by 50% • To increase the recycle utilisation rate to 10% • To extend the life of raw materials by 50% • To reduce carbon emissions by 20%

www.cbbc.org | 41 2. Key Chinese Players materials, power generation and energy It produces 90% of all titanium products storage materials, refractory materials, for China’s aviation and aerospace Xiamen Tungsten powder metallurgy materials, magnetic industry and has a complete metal materials, welding consumables, bio- processing chain with four development www.xiamentungsten.com Xiamen Tungsten focuses on the materials, engineering technology, high- fields including titanium products, manufacturing, sale and development speed steel and artificial diamond tools. zirconium products, equipment design of tungsten concentrate, tungsten- and manufacture, and specialty metals. molybdenum, powders, hard alloys, Northern Rare-Earth High-Tech cutting tool materials, rare-earth www.reht.com Beijing Zhong Ke San Huan Hi-Tech oxides, rare-earth metals, rare-earth REHT is China’s largest rare-earth www.san-huan.com.cn luminescent materials, magnetic manufacturer, R&D and trading San Huan produces rare-earth materials, rare-earth hydrogen storage company, it has a complete supply- permanent magnet Nd-Fe-B products and lithium battery materials. chain and manufacturing process for that are widely used in several fields, rare-earth separation, smelting and such as the automotive, household Advanced Technology processing, and R&D and product appliance, energy, computing, & Materials Company development capabilities – producing communication and medical care rare-earth raw materials, functional industries. Its products speed up the www.atmcn.com ATM specialises in advanced metal materials and final application products. renovation and transformation of materials and developing products and downstream products. solutions for several aerospace and BaoTi space customers that specialise in fields www.baoti.com/en such as amorphous and nano-crystalline BaoTi is one of the largest titanium and titanium alloy manufacturers in China.

The Torch Programme in particular promoted the development of High-Tech Zones in different cities in China. Various specialist industries are clustered around certain cities:

Beijing: Electronic, magnetic, Hebei: Semiconducting materials, Jilin: Auto materials, optoelectronics superconducting and new energy steel, ceramics, new chemical Liaoning: Metal, new chemical materials, biomedical materials and solar cells materials and magnesium Shanghai: Specialty steel, new Heilongjiang: New petrochemical Shaanxi : Organic polymers, new chemical materials materials and ceramics textiles, new non-metallic and new Tianjin : New chemicals and metals, Henan: Super-hard and refractory metals new energy, single-crystal silicon, materials, ferrous metals, building Shandong: New chemicals, compound semiconductors, materials composite materials, photoelectric new batteries, solar cells and Hubei: Electronic materials, materials nanomaterials biomedical, energy saving and Tibet: Nano-TiO2 materials Gansu : Non-ferrous metal, ferrous, environmental protection environmental protection and Zhejiang : Magnetic, photo-electric, Hunan : Energy-saving, composites, materials re-usage silicone, pharmaceutical, fine alloys, ferrous metal and organic chemicals, polymers, fluorides Guangdong: Ceramics, paints, polymers plastics, new batteries, auto Jiangsu : Composites, organic materials and aluminium polymers, rare earth, biomedical and Guizhou: Non-ferrous metal and ecological materials, ferrous metal inorganic non-metal materials and microcrystalline alloys

42 | www.ukti.gov.uk There are a large number of UK universities involved in the development and commercialisation of new materials.

Ningxia Orient Tantalum Industry 3. UK Strengths and University of Bolton www.nniec.com novel smart and NOTI produces alloys with tantalum, Opportunities multifunctional materials niobium, beryllium and titanium, and www.bolton.ac.uk/IMRI also silicon carbide abrasive materials The UK has a very wide range and battery energy materials. Several of organisations involved in the UK Materials Technology Research of its products are exported and are development of new high-technology, Institute (UK-MaTRI) widely used in various industries, spanning a huge range from graphene to creating composites that offer such as electronics, communications, UK-MaTRI employs over 150 self-healing wings for aircraft. The aviation, airspace, metallurgy, oil scientists and engineers, through organisations involved run the full chemicals, lighting, sports equipment, five individual institutes, each with a spectrum from specialist university medical equipment, nuclear and solar specific technological specialism and departments to companies such as energy production. competence. The main focus areas are: Rolls-Royce and consortia of both academic and commercial organisations. • Composition and microstructure – roles they play in determining the Universities behaviour of materials • Phenomena and properties – to There are a large number of UK reveal underlying mechanisms universities involved in the development • Performance – to assess suitability and commercialisation of new materials. for a given application The list below is representative; many • Materials design and lifetime other leading UK universities also have prediction by theoretical and new materials programmes. computational methods

University of Manchester UK MaTRI projects include: Graphene, biomaterials, ceramics, polymers • Stiffened plastic extrusions www.materials.manchester.ac.uk • Sustainable packaging that will extend food shelf life by over 50% University of Oxford • Breakthrough technology for Graphene development and marine hull cleaning commercialisation projects • Waste plastics to complex polymer www.materials.ox.ac.uk products • Radar absorbing materials University of Cambridge to eliminate wind turbine Graphene Wonder Material Centre, interference Device Materials Group (film growth and nanofabrication equipment) For further information please see: www.materials.ox.ac.uk www.uk-matri.org/about

Loughborough University Advanced ceramics, energy materials, advanced polymers, surface engineering and mechanics of materials www.lboro.ac.uk/departments/ materials/research

www.cbbc.org | 43 FIBCEM Project the opportunities that MIC2025 will budget has increased to RMB 16.8 present, for example James Durrans, billion (approx. £1.68 billion), and The University of Bath and Brunel who have set up James Durrans six new research projects to improve University are partners in the FIBCEM (Tianjin) Coating Ltd, and Kilfrost the sustainability of infrastructure project ‘Nanotechnology Enhanced (aircraft de-icing). development in the UK and China are Extruded Fibre Reinforced Foam to receive over £3 million in funding Cement Based Environmentally China is aware of the risk of over- from the Engineering & Physical Friendly Sandwich Material for dependence on foreign sources of Sciences Research Council (EPSRC). Building Applications’. For further technology, and has been trying to The funding follows a visit to the UK in information please see: boost this sector for a long time. early 2015 by Yang Wei, president of www.fibcem.com As part of this ongoing effort, joint the NSFC. research and development for MIC 2025 Opportunities new materials is in high demand According to the Ministry of Industry with Chinese local governments, and Information Technology (MIIT), Whilst some companies have institutes, universities and commercial 32% of new materials used in China complained that UK export restrictions companies all looking to UK are completely imported and 54% are can be a significant barrier to fully researchers for collaboration. For largely imported, while only 14% of exploring the new materials market in example, the Nottingham-Ningbo low-end materials are indigenously China (where dual-use concerns limit New Materials Institute, a deal made. As with the other industry the free flow of technology) there valued at £6 million over five years, sectors reviewed in this report, China remain extensive opportunities to will look at composite materials and is racing to develop more indigenous help Chinese producers move up the engineering, including soil mechanics, capability, so UK companies will find value chain (for detailed information particle materials and technologies, opportunities supporting Chinese on export licensing please visit: www. sustainable materials and advanced players to move up the value chain. In gov.uk). manufacturing technology, new particular: energy materials, and advanced CBBC interviewed several companies materials and technology. • Aero-engines and composite with materials interests in China materials for programmes such as for this report, including Spooner, Support for collaboration continues COMAC’s C929 large airliner a manufacturer of industrial ovens, to come from the highest levels of the • Key components for bogeys and dryers, and solvent and energy Chinese government and President electric supply and power trains recovery equipment, who were Xi Jinping’s October 2015 state visit for high-speed rail upbeat, saying: ‘The market for paper to the UK included a meeting at the • Up to 70% of all components in and steel is down, but overall we see National Graphene Institute (NGI) in the automotive industry the MIC 2025 initiative as good news Manchester where Chinese electronics • Separation paper for batteries in for us as it means more high-end giant Huawei, China’s largest mobile the new-energy vehicle industry users who really need our advanced phone manufacturer, announced a • Integrated circuit board chips technology. But it’s going to take time partnership with the NGI to research • Speciality steels – China currently to get there.’ graphene and related 2D materials. imports half of domestic demand • Plastics raw materials – China Fine chemicals is another area of Funding sources for UK-China currently imports 40% of domestic particular opportunity in the materials collaboration with a new materials demand sector, and UK companies are winning element also continue to grow, for business from leading Chinese example the National Natural Science companies and are confident about Foundation of China’s (NSFC) annual

44 | www.ukti.gov.uk LOW AND NEW ENERGY VEHICLES

1. Industry Background the construction of NEV charging international standards and realise stations in many other cities across 80% of market share by domestic and Future Trends China. companies • Develop intelligent vehicle-to- New-energy vehicle (NEV) sales in The government is also leading by vehicle (V2V) and vehicle-to-facility China began to grow rapidly in 2015, example, having ordered that a (V2F) systems following initial lower sales volumes minimum of 30% of all government • Have two BEV/PHEV manufacturers from 2011 to 2014. According to the cars purchased each year must be in the world’s top 10 in terms of China Association of Automotive battery-powered, electric hybrids or volume sales Manufacturers (CAAM), cumulative other new non-polluting vehicles. • 10% of China’s volume output to sales have now reached around Government procurement will include be for export sales 450,000, of which 380,000 were sold both domestic and foreign- models, • Reduce average fuel consumption in 2015. though all models have to be physically for all vehicles to five litres per produced in China; imported brands do 100km There is a consumer subsidy of up to not qualify. RMB 60,000 (approx. £6,000) for the Fuel Cell Electric Vehicles (FCEV) purchase of domestically produced The MIC 2025 initiative sets some clear NEVs, and other subsidies include a objectives to encourage the market MIC 2025 stipulates that China waiver of a 10% purchase tax (again for NEVs and associated infrastructure, should produce 1,000 FCEV units for for domestic NEVs) until 2017; most including: demonstrative operation by 2025, local governments are also offering including fuel cell life of 5,000 hours, free licence plate registration. Overall Plug-in Hybrid Electric Vehicles power density of >2.5 KW/L, range of these incentives have reduced the (PHEV) 500 km, and hydrogenation time of price to consumers of NEVs by as much three minutes. as RMB 120,000 (£12,000) for qualified The MIC 2025 initiative sets the vehicles. objective of achieving output and Intelligent and Connected Vehicles sales of 1 million units and market Developing charging point share of over 70% for domestic The initiative seeks to improve infrastructure is the main challenge. models by 2025. Additionally it China’s capabilities in intelligent The State Grid and China Southern specifies that by 2025 China should: auxiliary driving technology, including Power Grid, the two state-owned establishing a well-developed R&D enterprises managing China’s national • Achieve volume exports of new platform and manufacturing support grid, had constructed 3,600 charging energy buses clusters, to transform and upgrade the stations by 2015 (this compares to • Develop key components such as automotive industry. over 12,000 in the US and 3,700 in power-battery and drive motors to the UK). Beijing, Shanghai, Shenzhen and Guangzhou have all released ambitious plans to construct much more NEV-related infrastructure, including charging stations, power exchange and distribution centres. The National Development and Reform Commission (NDRC), National Energy Administration (NEA), Ministry of Industry and Information Technology (MIIT) and Ministry of Housing and Urban-Rural Development (Mohurd) have all announced they will support

www.cbbc.org | 45 According to the Ministry of Industry and Information Technology (MIIT), 32% of new materials used in China are completely imported.

2. Key Chinese Players Rover on the Chinese production stations, and there are many regional of JLR models. Chery has a strong initiatives to make more charging points. focus on developing EV and PHEV The leading Chinese auto technology, and has developed manufacturers working on NEV Some UK stakeholders include: two independent systems – a belt- projects are BYD, Beijing Auto (BAIC), driven starter generator (for fuel LeEco and Chery. Chargemaster efficiency when idling) and integrated www.chargemasterplc.com BYD starter-generator (captures energy when braking or coasting). Chery www.byd.com ELM Charging Solutions BYD’s conventional fuel car range is also an active player in charging- www.elmev.co.uk includes the F7, S6, F5 Suri and New point technology and infrastructure F7, and its hybrid vehicles include the investments. Open Charge Map F3DM, Qin and Tang. It has produced a www.openchargemap.org purely electric model, the E6, and the LeEco BYD eBUS-12. It also has a high-end www.leeco.com/index.html Our Electric Highway electric vehicle, the Denza, developed in LeEco is a business venture of LeTV, www.ecotricity.co.uk collaboration with Daimler. In 2013, BYD a successful Chinese media company, exported 50 E6 pure electric vehicles to which is expanding to areas such as PodPOINT Green Tomato Cars in the UK, which was NEVs, e-commerce and sports. LeEco www.pod-point.com the first volume export of this model to and Aston Martin recently announced the UK market. plans for the development and Source London production of the RapidE. www.sourcelondon.net In 2015, BYD agreed a strategic alliance with the UK company Alexander Dennis 3. UK Strengths and In addition there are several initiatives worth £19 million, to cooperate on the Opportunities in the academic and industrial sectors production of around 50 zero-emission, to improve efficiency, longevity and single-decker pure electric buses for ratio of storage to weight, such as: The UK Government Office for Low London. BYD will produce the chassis Emission Vehicles (OLEV)28 works and powertrain system and Alexander Energy Storage R&D Centre across government to support the Dennis will produce the body of the bus. HVM Catapult (Warwick University) early market for ultra-low emission BYD has strong capabilities in battery vehicles (ULEV). With £900 million of technology, battery management Cenex EV-Lite support, OLEV is working to position systems and powertrain systems. www.cenex.co.uk (weight reduction the UK at the forefront of global ULEV of lithium-ion batteries) development. In addition to all-electric, BAIC hybrid and hydrogen fuel cell power, Nexeon www.baicmotor.com there are initiatives in new generation In 2014, BAIC began a partnership with www.nexeon.co.uk (chemical conventional engines and advanced Siemens to set up a joint venture to development JV between St Andrews drivetrain technologies. produce highly efficient motors and University, Axeon and Ricardo) inverters for hybrid and battery electric All-Electric Vehicles vehicles. They produced 100,000 units in 2015 at their new Beijing factory. All-electric vehicles are still relatively new to UK roads; Nissan has led the

Chery way with its Leaf model, which is www.cheryinternational.com manufactured in Sunderland. Some Chery is headquartered in Wuhu, UK companies are also developing Anhui Province. Since 2012 it efficient infrastructure for rapid charging has partnered with Jaguar Land 46 | www.ukti.gov.uk UK companies could take advantage There are opportunities for UK The Transport Catapult of working with Chinese companies to organisations to support some of the https://ts.catapult.org.uk/ achieve some of the specific MIC 2025 specific goals of MIC 2025, namely to: This initiative in Milton Keynes is the objectives, including: UK’s innovation centre for intelligent • Develop R&D in integrated blade mobility, and helps promote the UK as • Developing solutions for weight electric platforms a testbed for the industry. reduction, low resistance tyres and • Develop high-efficiency plug-in vehicle design hybrid powertrain and extended- UK Hydrogen and Fuel Cell • Improving the efficiency of range engines Association (UKHFCA) thermal-driven power of high- • Achieve high-volume production www.ukhfca.co.uk efficiency engines embedded with of next generation lithium ion Coordinates a wide range of common rail direct injection (CRDI), electric power batteries, high initiatives, to develop applications gasoline direct injection (GDI), power-density and high reliability and advance the supply chain (from homogeneous ignition (HI) and electric drive systems material science research to systems turbo boost technology • Create an intelligent vehicle integration and distribution). • Optimisation of the control system industry chain based on big data, and high-efficiency gearboxes internet of vehicles (IoV), vehicle Opportunities in China will include: • Energy-saving in air-conditioning control and intelligent security systems • Construction of volume • Start-stop technology and braking- Hydrogen Fuel Cell Vehicles production and R&D of quality- energy recovery system used in control technology in the key commercial vehicles The UK has ambitious plans for materials of fuel cell catalysts, hydrogen fuel cell electric vehicles proton exchange membranes, Hybrid Vehicles (FCEV). The UK government is backing carbon paper, membrane FCEV development, supporting a pilot electrode components and bipolar Hybrid vehicles have been around for network of 15 Hydrogen Refill Stations plates a while in the UK, and now account for (HRS) with a multi-million pound • R&D to improve the reliability and around 2% of all vehicle sales. There incentive scheme. UK players include: engineering standards of fuel cell are many high profile initiatives using stack systems hybrid buses in UK cities. There are Birmingham University Centre for • R&D of general technology for UK automotive companies involved Hydrogen and Fuel Cell Research vehicle fuel cells in R&D and product development, www.birmingham.ac.uk/research/ • Back-up power and deep-sea including Jaguar Land Rover (which activity/chemical-engineering/energy- diving instruments has expanded its Coventry design and chemical/fuel-cells • Technology to improve the research facility looking at hybrid and The centre focuses on research reliability and cost-efficiency of all-electric technology), Ricardo and and development, applications and FCEV Ashwoods Automotive (which applies demonstrations of fuel cell and hybrid technology to commercial hydrogen systems and technologies. vehicles, e.g. for Royal Mail). Many UK universities are also undertaking Hydrogen London hybrid vehicle research, such as www.hydrogenlondon.org Cranfield University, Imperial College This is a well-established initiative London and Bath Powertrain & Vehicle that is working to introduce FCEVs and Research Centre. the related infrastructure. Its London Hydrogen Network Expansion (LNHE) project aims to establish a network of HRS refilling stations and to introduce commercial hydrogen taxis and vans to London. www.cbbc.org | 47 Intelligent and Connected Vehicles (VW), MINI (BMW), Caterham, Jaguar China, MIC 2025 will present further Land Rover (Tata), Lotus (Proton), opportunities, in particular around We see further opportunities related MG (SAIC), McLaren and Rolls-Royce concept consultancy and design, and to the intelligent transport systems (BMW). All of these companies are supply-chain technology including that will support new energy vehicles, looking at opportunities in new energy engine and engine parts, steering, as well as ICT-specific opportunities vehicles and the UK is now a key transmission, brakes and system related to MIC 2025 where the UK development centre for this sector. controls. has special expertise. These include: internet of vehicles (IoV)-based Aston Martin recently announced UK Investments telematics; internet-connected an agreement with LeEco, the information systems for buses, taxis Chinese backer of the electric car Chinese companies continue to view and other public transport; intelligent start-up Faraday Future, to develop a the UK as an attractive place for and connected vehicles embedded production version of Aston Martin’s investment into the auto industry and with automatic driving assistance RapidE electric concept vehicle, a place to develop technology that systems and automatic driving systems. bringing it to market by 2018, and also will achieve the aims of MIC 2025. In using internet capabilities developed addition to the JLR and Aston Martin Luxury and Sports Vehicles by LeCo (the owner of on-demand joint ventures, another new-energy LeTV and Le smartphones) to build the example is Geely, which acquired The UK is well known for next-generation connected electric London Taxi and Emerald, and is manufacturing luxury and sports vehicles by 2020. investing £300 million in the UK to take vehicles. According to Society of Motor electric taxis into production. The MIC Manufacturers & Traders (SMMT)29, The Chinese government has said that 2025 initiative is likely to accelerate this 1.6 million vehicles are produced per it wants five million electric vehicles on trend as Chinese companies look to year with a turnover of £64 billion. Key its roads by 2020 and in addition to the build their technological expertise. players include: Aston Martin, Bentley extensive market for vehicle export to

48 | www.ukti.gov.uk REFERENCES

1 www.deltarail.com 2 www.moa.gov.cn/ztzl/shierwu/hyfz/201109/t20110909_2202239.htm 3 www.thtechnology.co.uk 4 www.aea.uk.com 5 www.jcb.com.cn/about/jcbchina 6 www.miit.gov.cn/n11293472/n11295142/n11299123/16604765.html 7 www.adsgroup.org.uk 8 www.gov.uk/government/organisations/medicines-and-healthcare-products-regulatory-agency 9 www.ct.catapult.org.uk/documents/10588/79891/UKTI-Life-Science-Brochure-Dec-2012.pdf 10 www.ct.catapult.org.uk/airway-diseases 11 www.ct.catapult.org.uk/working-with-leading-uk-cell-therapy-company-on-its-flagship-product 12 https://ct.catapult.org.uk/ 13 https://ct.catapult.org.uk/big5-eu-market-access-roadmaps-for-cell-therapies 14 www.gov.uk/government/publications/offshore-wind-power-in-the-uk-investment-opportunities 15 www.gov.uk/government/publications/energy-networks-in-the-uk-investment-opportunities 16 www.cmtba.org.cn/ 17 www.ifr.org 18 http://liaoning.nen.com.cn/system/2015/08/08/018351673.shtml 19 www.3ddayin.net/zx/11626.html 20 www.dcs.gla.ac.uk/research/S4 21 www.mta.org.uk/members-and-products 22 www.cetc.com.cn/Article_List.aspx?columnID=7 23 www.eito.com 24 www.gov.uk/government/publications/information-communications-technology-ict-in-the-uk-investment- opportunities 25 www.gov.uk/government/publications/communications-industry-in-the-uk-investment-opportunities 26 www.guokr.com/article/212046 27 http://ciccc.com/english_npcpi/index.htm 28 www.gov.uk/government/organisations/office-for-low-emission-vehicles 29 www.smmt.co.uk/2015/08/july-2015-ev-registrations

www.cbbc.org | 49 Contact details

China-Britain Business Council

CBBC offers a wide range of support covering advice, events and access. UK We are a member organisation, representing nearly 1,000 UK companies 3rd Floor, Portland House in their business with China – multinationals, medium-sized and start-ups Bressenden Place – across all industry sectors. Our business services include market research London SW1E 5Bh and advisory, business match-making and meetings, the CBBC Launchpad scheme to get businesses started on the ground, conferences, seminars, [email protected] networking events, webinars, training and translation services. Tel: +44 (0) 20 7802 2000

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UK Trade & Investment

British Embassy Beijing British Consulate-General Wuhan British Consulate-General Chongqing 11 Guang Hua Lu, 33/F, Ping An Finance Centre, Suite 2801, Jian Guo Men Wai Wuhan Tiandi, Metropolitan Oriental Plaza, Beijing 100600 1628, Zhongshan Avenue, 68 Zourong Road, China Jiang’an District Yu Zhong District Wuhan 430010, China Chongqing 400010, China Tel: +86 (0) 10 5192 4000 Fax: (+86) (10) 5192 4218 Tel: +86 (0) 27 8270 3600 Tel: +86 (0) 23 63691400/63691500 [email protected] Fax: +86 (0) 27 8270 3699 Fax: +86 (0) 23 6369 1525 [email protected] [email protected]

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50 | www.ukti.gov.uk

Notes

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