China: change of development vector.
China: change of development vector.
While everyone knows the phrase “Made in China,” the Chinese security industry is moving by leaps and bounds towards its own developments. Today, among more than 5,000 products widely sold in the world, the share exported by China is more than 2,000. Moreover, for 200 of them, China is one of the five largest producers, and for 80, it is the largest. 70% of goods sold in the US are made in China. Due to favorable market conditions at that time, China's turnover with foreign countries reached $1.5 trillion by the end of 2007.
Thus, answering questions from the asmag website, vice-president of Hikvision Znehg Yibo noted that China has long been established as a global production center. There are several reasons for this. First, increased foreign investment and commercial expansion create the necessary conditions for the continued development of Chinese industry. Secondly, China has the largest labor market, which allows wages to remain low. Thirdly, China has a very large domestic market. Fourth, the Chinese nation has a large number of qualified engineers, specialists and managers. As an integral part of the country's economy, China's security industry is developing and its export share is increasing.
Today, many experts are observing a change in the vector of development of China's economy. Chinese industry is shifting from simply manufacturing goods to designing and developing them. Production is moving away from low-profit and low-profit tasks to high-profit ones. In a broad sense, the term “Designed in China” includes the entire production cycle from R&D (research and development, R&D) to sales and marketing. In a narrow sense, this includes production. But it should be noted — believes Znehg Yibo, — that despite its success, China still has a long way to go to catch up with Japan, Korea and Taiwan.
To achieve success, a company must have a clear strategy in development. These should be integrated plans that clearly define the tasks and details of the development process, and the efficient use of resources. For a business, this means understanding how to properly use its research and production potential, technologies, investments and marketing campaigns.
For example, the same company Hikvision relatively recently was an auxiliary laboratory of the China Electronics Research Institute No. 52. Being engaged in research and development in the field of IT technologies, she accumulated certain experience, which allowed the newly created structure to successfully engage not only in the production of computer printed circuit boards and encoding/decoding boards, but also in the development of network technologies, operating systems and digital video surveillance systems.
This example clearly demonstrates the importance of development and transition through engineering, technological and manufacturing breakthroughs from the meager profits of private workshops to the “creative” industry. Creativity requires more than just the involvement of mainstream technology. Designed in China also represents a change in business model.
The successful implementation of a new vector of development of the security industry, according to Znehg Yibo, will certainly be facilitated by factors such as flexibility in production and industrial support, and obvious advantages in human capital over all other countries. In addition, the Chinese have settled all over the world, providing excellent opportunities to enter new markets. Chinese corporations are accumulating technology, capital and distribution channels. Today it is already obvious: Chinese manufacturers are gradually moving from copying and mass production to real developments. One confirmation of this process is the fact that Chinese companies are increasingly patenting their achievements.
Which industries show the greatest potential?
Znehg Yibo believes that Chinese companies can develop security products and systems, including software and applications, well. However, foreign software companies have long dominated the Chinese market. The vice president of the Chinese company considers this a rather serious problem, the solution of which will require a lot of work and effort. In fact, 70% of product quality depends on the quality of development.
It is also necessary to change production concepts. After all, even a successfully developed solution can only capture the target market for a while, but competition will not allow developers to rest on their laurels. To remain competitive, companies need to build teams, technology platforms, and advanced management practices.
What else needs to be done to implement a new vector of economic development?
Answering this question, the Chinese businessman identifies the following main tasks:
— strengthening the national creative idea, protecting intellectual property and combating piracy;
— creation of optimal international business instruments;
— ensuring quality while reducing costs and expenses;
— awareness of the needs of foreign buyers;
— use of foreign marketing experience.
