An aerial view of SAIC's assembly line in Nanjing, Jiangsu province, in April. [Photo/China Daily]
The main lessons learned from these visits are:
1) Wages are rising and the competition for workers is fierce, so companies are forced to upgrade their production technology. In many cases, factories in Jiangsu are world leaders in efficiency.
2) The best international companies are locating in Jiangsu, both because it offers productive capability and because it gives them access to the Chinese market.
3) Prosperity has spread from first-tier cities to smaller cities around the region. Many smaller cities and counties in Jiangsu offer excellent infrastructure and access to skilled workers while the local governments compete to offer the best business environment.
The SAIC factory making Maxus vehicles near Nanjing is able to produce cars efficiently because it has the lowest inventory of all carmakers, said Wang Ying, director of the plant.
A walk around the plant shows a very clean, productive environment with a large deployment of robots. According to Wang, the average employee in the plant makes 8,000 yuan ($1,207) per month, though that entails a lot of overtime work.
The company decided to locate the plant in Nanjing because Jiangsu has a good business environment and also especially because Nanjing has lots of universities, so needed talented people are available.
The plant focuses mostly on the booming domestic car market, though it exports about 20 percent of its production, mainly to the Middle East and Norway.
Yu Haibin, general manager of Brose Taicang Automotive Systems Co, said his experience is that the local government and businesses treat each other as family members. "Whenever the company finds difficulties or problems, we consult with the relevant government authority. We work with the person in charge of the issue to find solutions. The government treats us the same as local companies and provides high-quality services," he said.
The Cainiao warehouse in Wuxi, a division of Alibaba, also illustrates the upgrading and high-tech transformation of business in Jiangsu, and throughout China.
Partly because of rising wages and great competition for workers, the warehouse has implemented some of the world's most advanced automation to cut the labor count from 2,000 to less than 1,000. A large benefit is that the robots do the dangerous work of moving heavy packages, so workers' injuries have been practically eliminated.
Yao Xinyu, senior manager of the East China region for Cainiao, said the company designs and builds the robots itself. "The key is artificial intelligence. When we deploy more robots, we need to store more data on our system. So only Cainiao is able to support the huge orders from Tmall (Alibaba's online marketplace for established Chinese and foreign brands). We are the only company able to process this huge amount of data because we have the needed algorithms and systems," he said.
Thousands of German plus other European and American companies have moved to Taicang. Matthias Muller, managing director of the German Center for Industry and Trade in Taicang, said that German companies that want to compete in this market need to move here and that a significant portion of manufacturing is moving. "They are finding it harder and harder to compete against Chinese companies that are closing the quality gap," he said.
