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Shanghai: the capital of China’s automation industry

Shanghai: the capital of China’s automation industry
China’s escalating labor costs are eventually undermining productivity and are eating into economic progress. There is fear that China could become less competitive compared to emerging-market rivals. The growth of automation and the well established industrial supply chain are the two of the most strong reasons for optimism about China.

Over the last 35 years, China has become the world’s most prominent manufacturer, churning out everything from shoes to heavy machinery. Powering that ascent was the heavy inflow of foreign direct investment, state spending and seemingly unending pool of cheap labor. But now as the Chinese wages keep rising, the global demand for China’s products slows and the workforce ages, the decades long manufacturing boom might come to an end. According to the National Bureau of Statistics, In 2015 alone, China’s exports fell, the worker wages increased on an average by 8 % and the number of working age people fell by more than 4.5 million. A volatile business environment has prompted many of the foreign companies to reduce their China exposure. A business survey published by American chamber of commerce in Beijing, found that a lot of manufacturing companies are planning to move or have already moved their production facilities outside China, to countries like India, Vietnam, Mexico and some even to America.

To help China recover from its industrial decline, the Chinese leadership has emphasized on industrial automation. Large scale deployment of industrial automation technologies and robotics can help China’s factories to raise their efficiency and reduce overall costs. The use of advanced automation technologies and high-tech machineries has just begun to take off in China in the last five years, and it’s expected to grow considerably in the next five. China is now the biggest market in the world for industrial robots, and the number of these robots in China’s factories is expected to increase by an average of 25 % each year between 2017 and 2020, according to the International Federation of Robotics. Increased levels of automation in factories will bring many benefits, including allowing the Chinese manufacturers industry to progress from low-end products to high-value areas such as electronics and ­other forms of technology.

Apart from the benefits for Chinese manufacturers, this process is likely to spur demand for automation hardware, software and skilled employees. Though China is working hard to expand its domestic automation hardware and software industry, much of its automation equipment, comes from leading foreign companies. For example, the German and Japanese corporations are among the leading market share holders for majority of the automation product segments. Despite high growth in percentage terms in the ­recent years, the base of companies deploying factory and process automation technologies as well as robotics, in the country is modest compared with the enormous size of China’s manufacturing base and the number of workers it employs. The opportunity for companies in the industrial automation sector is strong and is expected to grow at an average annual growth rate of around 15 % until 2020. This means the market size is expected to almost double within the next few years.

China’s construction sector requires minerals and natural ­resources in vast amounts. But due to China’s overcapacity at factory levels and reduced construction activity, the growth prospects for automation segments in industries such as steel, mining and construction materials offer a roughly 4-5 % annual growth. In the recent years, China’s internal demand for chemicals, pharmaceuticals, petrochemicals and electrical energy sectors has increased rapidly. Therefore with good quarterly earnings, improved global and domestic demand and rising labour wages, manufacturing companies in the above industry sectors are in a more comfortable position to invest in process automation. For factory automation, the renewable energy sector and pharmaceuticals in particular are seen as major growth drivers, with more than 15 % annual growth potential. The most significant of all the industries, in terms of market size and variety of automation systems deployed, are definitely the electronics, automotive and heavy machinery industry sectors. They represent the largest market for industrial automation products and systems; and with increasing demand for all electronic products and automobiles, these industry sectors are well positioned more than anyone else to focus more on automation systems in short as well as long term.

Shanghai: An ideal location with a enormous ­market potential

As the most influential automation event in the Asia-Pacific, the Industrial Automation Show in Shanghai is the perfect place to know about China’s industrial automation landscape. The event is organized at the National Exhibition and Convention Center in Shanghai from 7th to 11th November. Every year, this international event has been attracting more than 100,000 visitors and industry experts from all over the world. In 2017, this number is set to ­increase to a whopping 160,000 visitors. Given its strategic location and the size of market Shanghai represents, IAS has become the most ideal choice for foreign and domestic enterprises in China. This show provides comprehensive solutions for factory automation, production and process automation, digitalization of manufacturing, mechanical and electrical systems along with industrial IT. In 2017, IAS will delve into the theme of ‘innovation, intelligence and green’. More than 600 leading companies will be showcasing their products and intelligent technologies in a display area of 55,000 sq. meters, the event attracts exhibitors not only from China but from all over the world, including USA, Germany, Japan, Taiwan, India, Holland and France. Visitors, mainly representing the machinery manufacturing, automobile, electronics, energy, food and beverage, pharmaceuticals, packaging and machine tools industry attend this international event in search of innovative products and comprehensive systems for their industry’s requirement.

This trade show hosts a broad range of products and technologies related to production and process automation such as linear positioning systems, automated assembly & handling systems, control systems like PLC, scada, industrial automatic data capturing and identification systems, embedded systems and industrial PCs, industrial image processing systems, sensors and actuators, communication network and field bus systems, measuring and test systems, laser technology and compressed air technologies. The product line up for electrical systems and technologies is also quite comprehensive, with domestic as well as international corporations displaying their products in this segment which include; transformers, accumulators and uninterruptible power supply units, electric switch gears and equipment for electric controls systems, electric as well as mechanical drive systems, electric motors, frequency drives, electric and electronic test and measuring equipment, cables and cabling accessories, electronic and opto-electronic components. In the field of automation software and IT, the visitors can see software systems directly used in manufacturing set ups, basic software systems and development tools for industrial applications, and the required IT hardware.

A leader market for industrial robotics

In the recent years, China has been a huge market for robotics, even challenging Germany, Japan and South Korea in terms of number of robots installed annually. Despite the double digit growth in number of installed robots, China still lacks far behind in terms of robot density. As China and its manufacturing industry look to improve its position globally, the demand for industrial robotics is set to rise by 25 % every year. The industrial robots from Chinese as well as international companies have always been a highlight of the show in Shanghai. This year too, the robotics sector has been drawing a lot of attention with even more exhibitors bringing their latest technology and supreme robots to the show. Global experts from the robotics sector discuss about the current market scenarios, future product developments and explain their technological successes in various application industries. This event creates a platform of knowledge transfer and interactions for participating specialists and visitors.

For engineering and management experts across China, the ­Industrial Automation Shanghai is definitely the must attend event, as it provides the visitors and exhibitors to find new solutions, products, suppliers and clients. Shanghai proves to be an excellent ­location to interact with the global industrial community and share knowledge, to forge new business associations and create stronger networks.

More about the show


Picture: Nicole Steinicke

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