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.