Everything Is Connected:

murmerlastUrban and Civil

Nov 16, 2013 (3 years and 10 months ago)

76 views


Everything Is
Connected:

China's Political,
Economic and Industrial
Policies and the
Development Of China's
High Tech Industries


中国的
电子工业

China’s
Electronics
Industry

Technology and Business Insider (TBI) is a
provider of intelligence about emerging
technologies, companies and business sectors

China By the Numbers

China Economic Review 2009


5
m

students graduated from universities in 2007
Opportunity


Every year since 2002, 30% of China’s university
graduates have not found employment!
Challenge



Note: Consensus is that China needs to maintain a
GDP growth rate of >8% annually to maintain
sufficient employment and avoid civil strife.
Challenge

中国的
电子工业

China’s
Electronics
Industry


©
TBI 2010

China By the Numbers


China
Economic

Review 2009



High Tech Industrial Base


In 2007 China’s High Tech industrial sector
accounted for 7.8 of GDP


In 2006 China had 1.4
m

people
specifically engaged in scientific R&D,
second only to the USA


At the end of 2006 China had 150,000
registered firms involved in science.

中国的
电子工业

China’s
Electronics
Industry


©
TBI 2010

China is Unique


Progress is extremely rapid


China has not singled out a particular industry in
which to excel. It is going for the complete supply
chain in high tech industries, especially electronics


China has potential for incredible sustainment:
(large population of workers, large market)


中国的
电子工业

China’s
Electronics
Industry


©
TBI 2010

中国的
电子工业

China’s
Electronics
Industry


Source: WSJ, 11/16/2010

R&D Spending


中国的
电子工业

China’s
Electronics
Industry


©
TBI 2010


China is now at an inflection point more so
than the West and how they deal with it is
immensely important to all of us.


China is adept at technology transfer in all of
its forms both legitimate and illegitimate and
the momentum is such that any shortages in
experience and intellectual capital are rapidly
being overcome.


In the long run this will lead to significant
increases in innovative capacity, the lack of
which today is the most common, and only,
comfort zone we have when viewing China
as both a hard power and soft power
competitor

中国的
电子工业

China’s
Electronics
Industry


©
TBI 2010




China recognizes the pivotal role of
the microelectronics industry to its
overall economic development, and its
economic contribution to what the
government refers to as a well
-
off
society.


China is on track to achieve its
“innovation
-
oriented” society goal by
2020.


In high
-
end electronics markets China
is just beginning to seriously
participate as a supplier as well as a
buyer.





©
TBI 2010

中国的
电子工业

China’s
Electronics
Industry



China’s participation in high
-
end
electronics markets will
grow fast and
feature high mix and low volume
production, covering surveillance,
medical electronics, automotive
electronics, industry automation, military
electronics, aviation and space
electronics.




China Outlook Newsletter December 2008




中国的
电子工业

China’s
Electronics
Industry


©
TBI 2010

China’ Electronics Industry


China produces
35 percent of the global
electronics market’s revenues
of US $ 2
trillion.


It is important to analyze China’s electronics
industrial base in terms of its connectivity to
multinational and foreign
-
owned companies
and global markets


It is just as important to understand what is
happening China’s domestically owned
industry and market demand.


中国的
电子工业

China’s
Electronics
Industry


©
TBI 2010

中国的
电子工业

China’s
Electronics
Industry

1990s

1980s

2000s

The last phase of
Globalizing Chinese
Companies

©
TBI 2010

Common “Success” Story


Transition from low cost (e.g. product assembly and manufacture)
to value
-
added components, materials and equipment.

Consumer goods

Circuit card assembly

Circuit card fab

ICs

中国的
电子工业

China’s
Electronics
Industry


©
TBI 2010

And it is integrated circuit electronics that
has given us the PGMS and NCW that the
Chinese have been studying since GWI

中国的
电子工


China’s
Electronic
s Industry

©
TBI 2010

Comparative Growths In the Value Of High
End Electronics Production: 2005
-
2008

Source: OECD Information


Technology Outlook

Percent Per Annum Growth

China

USA

Control and
Instrumentation

25.39

3.78


Radio and Radar

17.81

2.94

Electronic Data
Processing

15.8

-
1.21


Telecommunication

15.56

-
0.78


Medical and Industrial

15.38

4.3

Components

15.17

2.18

Semiconductors and
Microelectronics


The single most important technology sector
for China’s economic development and high
-
tech industrial base is its
semiconductor and
microelectronics design and fabrication
capability.


The key to China’s ability to design, develop,
and produce high
-
reliability complex
electronics components and systems is a
rapidly growing microelectronics industry.

中国的
电子工业

China’s
Electronics
Industry


©
TBI 2010


Industrial Policies



National Guidelines for Medium
-

and
Long
-
term Plan

for Science and Technology Development
(2006
-
2020
)




Electronics, information theory and
processing
(electromagnetic fields,
nano
-
electronics, bioinformatics, adaptive signal
processing)


Computer science
(system architectures,
software engineering, natural language
processing, virtual reality, embedded
systems)


Network and information security


中国的
电子工业

China’s
Electronics
Industry


©
TBI 2010

Industrial Policies

National Guidelines (2006
-
2020)


Automation science
(control theory, pattern
recognition, artificial intelligence, robotics,
environmentally sustainable industrial
production processes)


Semiconductors, photonics
(nanotechnology,
high
-
speed optical networks, quantum
optics, photonics in health and medical
research)


Interdisciplinary research
between
information and mathematics (theoretical
studies on number representation, software
engineering)


中国的
电子工业

China’s
Electronics
Industry


©
TBI 2010

Industrial Policies

Electronics Information
Industries Stimulus Plan of 2009


Ten objectives of announced the plan included the
following objectives:


increasing fiscal investments


improving the investment environment


accelerating the promulgation and enforcement of
finance and taxation support


enhancing support to export
-
oriented enterprises


supporting the application of information technology
in traditional industries


encouraging enterprises independent innovation
and creation


expanding the financing system


supporting mergers and reshuffling superior
enterprises


expanding domestic demand


building industrial security and injury alert
mechanisms.


中国的
电子工业

China’s
Electronics
Industry


©
TBI 2010



Industrial Policies

Developing a true dual
-
use
industrial base



China is seeking to inject some of the private sector enterprise that
increasingly drives its exports into a fresh sector
: defense
.


In a move to break down barriers to private involvement in arms
production, Beijing approved recently the creation of a national fund
to help finance private contractors


which often struggle to raise
capital


while also investing in turning state
defence

suppliers into
shareholding companies.


Officials believe that tapping private sources of funds will raise the
hope of more efficient allocation of capital within the
defence

sector.
“The development history of western
defence

industries makes clear
that the capital markets have been fertile soil for their fast
development,” state media recently quoted
Xu

Haipeng
, head of the
Defence

Science and Technology Enterprise Management
Association, as saying.

Source: Financial Times (London) 05 Jan 09.


中国的
电子工业

China’s
Electronics
Industry


©
TBI 2010

Everything Is Connected:

How China is Taking Advantage of
the Global Consumer Electronics
Market Decline

中国的
电子工


China’s
Electronics
Industry

©
TBI 2010


Globalization

With Chinese Characteristics


China’s global reach, intellectual capital and
industrial capacity will soon be sufficient to achieve
its political objectives
through soft power
--

without
firing a shot


The pressure to maintain internal order ensures that
the CCP
will continue to develop policies in support
of the growth of its middle classes through high tech
value chain escalation and the globalization of
China’s companies.


Remember this from an earlier
“this decade will now
see the push of Chinese companies and brands in
to foreign markets”

中国的
电子工


China’s
Electronics
Industry

©
TBI 2010

Globalizing Chinese
Companies



What’s holding China back?



“Maybe the more convenient way [to
globalize Chinese companies] is through a
kind of merge and acquisition and really
buy the foreign company and fully use the
foreign talent to manage the company.”


The McKinsey Quarterly, Video, China’s
former chief trade negotiator,
Long
Yongtu

November 2008

中国的
电子工


China’s
Electronics
Industry

©
TBI 2010

Globalizing Chinese
Companies


Chinese Companies Go Abroad


“…many Chinese companies plan to take advantage of
the global downturn to make greater inroads into the
West.



over half of smaller industry leaders interviewed have
already begun moving overseas, or plan to begin within
the next five years. Shaun Rein is the Founder and
Managing Director of the
China Market Research Group

Jan 5, 09

中国的
电子工


China’s
Electronics
Industry

©
TBI 2010

Globalizing Chinese
Companies


100% of large industry leaders interviewed have
already started moving abroad, as have 80% of
smaller leading companies.



80% of large industry leaders interviewed consider
building their brand image from domestic Chinese
to global name brand their primary goal in
expanding abroad.



All respondent companies will establish more R&D
centers abroad to better utilize the talent and
technology advantages there


Chinese Companies Go Abroad (Part 2: The
Consumer Electronics Sector) January 06, 2009

中国的
电子工


China’s
Electronics
Industry

©
TBI 2010

Emerging Electronics

Capabilities And Markets

Avionics

Automotive

Renewable Energy

Medical

Defense


中国的
电子工


China’s
Electronic
s Industry

©
TBI 2010

Aerospace Electronics Supply Chain



Printed Wiring Board Assembly:

0
-
1 year development time; 3
-
30 years of required use


Service Provider (Airlines):

10
-
30 years of required use

Paying Customers

Subsystem (Electronic Module):

1
-
5 years development time; 3
-
30 years of required use


System (Flight Control):

2
-
5 years development time; 5
-
30 years of required use


System Platform Provider (Airplane)

3
-
10 years development time; 5
-
30 years of required use

Regulatory Agency


(FAA, EPA, UL)

Multilayer Printed Wiring Board

3
-
6 mo. development time; 2
-
30 years of required use

Resin

Pre
-
preg and Core

Woven Fabric

Glass
-
Fiber


Bundles

Component


0
-
6 mo. development time; 2
-
30 years of required use

Die

Encapsulant

Leadframe

Accelerator

Flame Retardants

Release Agent

Filler

Resin

~

~

Copper Foil

中国的
电子工业

China’s
Electronics
Industry

©
TBI 2010

C919: China’s Domestic Large Jet Program


电子工业

China’s
Electronics
Industry

China’s latest large aircraft development
program is the C919 and is aimed squarely
a gaining a share of the global long haul air
transport market
.


©
TBI 2010

ARJ21: Advanced Regional Jet

for the 21st Century

中国的
电子工业

China’s
Electronics
Industry

©
TBI 2010

Another advanced aviation development
case with Brazil’s assistance this time.

Xi’an Aircraft:
Xinzhou

600 Aircraft

中国的
电子工业

China’s
Electronics
Industry

Xi’an Aircraft is another result of the industry’s restructuring, with each
company taking aim at challenging western manufacturers in specific
market segments.


©
TBI 2010

China’s L
-
15 Falcon


The
Hongdu

Aviation Industry Company has
just completed an early version of its L
-
15
Falcon jet


The jet’s turbojet engines produce 4,200 kg of
thrust and speeds up to M1.6


This is one first step for China to close
capability gaps in gas turbine engine
development


The company also plans to open a chain of
R&D and manufacturing centers in order to
“strengthen international cooperation” and
facilitate technology exchange



中国的
电子工业

China’s
Electronics
Industry

©
TBI 2010

Everything Is Connected:


Electronics required for

jet

engine controls


The L
-
15 is ideally suited to challenge US, British an French markets in
the developing world.



As for gas turbine engines, research I worked on in 2003 concluded
“not for at least another generation”.
We were wrong!


The Aviation Industry Corporation of China (AVIC) commenced
construction on 9 November 2010 of China's largest military jet engine
development center
as part of increasing efforts to close what is
deemed as a gap in the country's industrial capabilities.


The engine development centre will focus on military as well as
commercial systems and the facility will meet the future development
needs of air power,
particularly the development of large aircraft. It ...
will eventually form China's largest aero engine base
.

中国的
电子工业

China’s
Electronics
Industry

中国的
电子工


China’s
Electronics
Industry

©
TBI 2010

China’s Auto Industry


In 2009, China passed the US to become
the largest auto
market in the world.


As of 2009 there were 52 foreign and domestic car makers
operating in China, compared to 15 in the United States.


In an effort to make the Chinese automobile industry more
competitive internationally,
the Chinese government has
encouraged car companies to consolidate and reduce
dependence on government subsidies and joint ventures with
foreign companies
.


The golden period of China's auto industry will likely last 20
more years


The yearly demand for passenger vehicles will reach over 35.2
million units in 2030

Source: Report
-
State Council, the Society of Automotive
Engineers and Volkswagen China on July 5, 2010

中国的
电子工


China’s
Electronics
Industry

©
TBI 2010

13.79
9.35
8.88
7.28
5.71
5.07
4.44
3.25
2.33
1.2
2.07
0
2
4
6
8
10
12
14
16
18
20
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Chinese Automobile Production

中国的
电子工


China’s
Electronics
Industry

©
TBI 2010

Standard Automotive Electronics


Anti
-
lock braking system (ABS): MCU, direction
sensor, speed sensors


Tire pressure measurement system (TPMS): MCU,
pressure sensor, probes


Backward radar detector: MCU, infrared transceiver,
alarms


Power window: motor, power components and circuit
protection


Power steering: motor, power components and circuit
protection


Power lock: motor, encoder/decoder


Automatic transmission: motor and circuit protection
.

中国的
电子工


China’s
Electronics
Industry

©
TBI 2010

Hybrid And Plug
-
In Electric Vehicles
Electronics


Hybrid and electric vehicles add complexity to vehicle
electronics architecture and design.


The power train requires additional components such as
battery and motor controllers.


Functions such as regenerative breaking must be integrated
into current vehicle safety systems.


Extra consideration must be given to the effects of electronic
noise and interference on the control system.


EV/HEV further complicates integration especially as power
train control is essentially a drive
-
by
-
wire system critical to the
safety of the operation of the vehicle.


Electronic microcontrollers are essential to vehicular power
train applications and subject to increasingly stringent
environmental and government regulations and design
improvements

中国的
电子工


China’s
Electronics
Industry

©
TBI 2010

HEV/EV Automotive

Electronics Demand


“Thanks to the mature hybrid power technology,
China will likely produce 100,000 hybrid vehicles,
30,000 pure electric vehicles, and 10,000 fuel cell
-
powered vehicles in 2010”


“Automotive electronics is an industrial discipline and
China should attach much importance to automotive
electronics research and development so as to speed
up its transition from a major manufacturing country
of entry
-
level vehicles to a high
-
end vehicle
manufacturing country.”


Production volumes projected to be, and 1 million
HEVs
, 300,000 all electric and 20,000fuel cell
vehicles by 2015
.

Source: State Council, the Society of Automotive Engineers
and Volkswagen China Jointly Authored Report July 5, 2010

中国的
电子工


China’s
Electronics
Industry

©
TBI 2010

Renewable Energy


Sept 2010: China overtook the United States top spot
in Ernst & Young’s quarterly renewable energy country
attractiveness ranking China as the most attractive
market
-

of 27 countries monitored since 2003
-
for
investment in wind and solar projects


“Strong government resolve together with good
infrastructure and a robust market has aided China in
its drive to become a global leader in the renewable
energy sector.”


Determinants: access to capital, access to the power
grid, availability of land, planning barriers, and
regulations

中国的
电子工


China’s
Electronics
Industry

©
TBI 2010

Wind Energy


In 2004 there were six wind turbine makers in 2004 in China.


In 2009 there were more than 70.


China is the third largest wind power market in the world.


Sinovel

Wind Group Co, which has the largest share in the
domestic wind power equipment market, is now
building a
national offshore wind power technology and equipment
research and development (R&D) center, which was approved
by the National Energy Administration in January, 2010.


Vestas
, the world’s largest maker of wind turbines opened a
$50M R&D center in Beijing on Oct 12,2010 to cover
high
voltage engineering,

aerodynamics, materials and software
development



Source: China Daily
02/22/2010

中国的
电子工


China’s
Electronics
Industry

©
TBI 2010

Main Components Of A

Wind Turbine System

Wind
Power
Rotor

Gearbox
(optional)

Power
Conversion and
Control

Power
Transmission

Generator

Power
Converter
(optional)

Power
Transformer

Power Conversion
& Power
Transmission

Power
Conversion &
Control

Mechanical
Power

Electrical
Power

Supply
Grid

中国的
电子工


China’s
Electronics
Industry

Wind Energy

©
TBI 2010

中国的
电子工


China’s
Electronics
Industry

©
TBI 2010

World’s Largest Solar
-
Powered Building in Dezhou,
Shandong Province

Photovoltaics

中国的
电子工业

China’s
Electronics
Industry

©
TBI 2010

A wayside pavilion made of solar panels in
Shanghai.

中国的
电子工


China’s
Electronics
Industry

©
TBI 2010

Source: European Photovoltaic Industry Association 2010

China appears as a new player in 2009 with about 160 MW
installed. For the Policy
-
Driven scenario, the annual market is
expected to reach 30 GW by 2014.



中国的
电子工


China’s
Electronics
Industry

©
TBI 2010

Source: China’s Electronics
Industry 2009

Global PV Production in 2007
and Future Planned Production
Capacity Increases

China’s Medical Electronics
Industry


Many clinical medical devices are
microprocessor
-
based electromechanical
instruments that use a common set of
building blocks:


power control and temperature management;



a user interface that includes a keypad,


LCD monitor and audio control; flash or EEPROM
for data logging


device interfaces for connections to other
machines
.

中国的
电子工


China’s
Electronics
Industry

©
TBI 2010

中国的
电子工


China’s
Electronics
Industry

©
TBI 2010

China’s Medical Electronics
Industry


In March 2009 China’s Ministry of Science and
Technology announced that it will set up an
independent national innovation industry base for
medical devices in Chongqing.


Forecast at $45.6
bn

in 2010, 41% growth over 2009


Forecast at $12.1
bn

by 2014


More than 200 foreign owned and and transnational
corporations companies, about 70 percent of China’s
high
-
end medical apparatus and instruments producer
base, dominate the industry.


Government investment in hospital reforms
expected to stimulate 20% annual growth
.









中国的
电子工


China’s
Electronics
Industry

©
TBI 2010

Source:iSuppli

2010

China’s Medical Electronics
Industry: Growth Rates 2008
-
2013

中国的
电子工


China’s
Electronics
Industry

©
TBI 2010


China’s Defense Priorities


Force Modernization


Precision Guided Munitions


Unmanned systems


Space


Producing 4th Generation Fighters


Expanding amphibious capabilities


Carrier and Blue Water Navy


Submarine force transformation


C4ISR



Power Projection Naval Deployments


Advanced Base Agreements

中国的
电子工


China’s
Electronic
s Industry

©
TBI 2010

The C4ISR Challenge


its all
electronics and software

中国的
电子工


China’s
Electronics
Industry

©
TBI 2010

China's Defense Expenditures
1985
-
2008

Source: The Military Balance,

International Institute for Strategic Studies

1985

2000

2005

2008

$US
bn

29.41

41.2

29.9

60.2

Per Capita

28

32

23

27

% GDP

1.2

2.1

1.3

1.3

Total
Personnel
(mn)

2.7

3.5

2.2

2.3

China's defense spending is by
no means transparent
!


China's officially published 2010
defense budget totaled about $77.9
billion


Chinese defense spending has
increased by an average of 12.9%
annually since 1989 when Beijing
launched an ambitious army
modernization program, and this was
only the second year over that period
in which annual growth was less than
10%.

中国的
电子工


China’s
Electronics
Industry

中国的
电子工


China’s
Electronics
Industry

©
TBI 2010

Source: The Military Balance,

International Institute for Strategic Studies

Arms Transfers 2001 & 2008

To China


From China

Value

% of
Global
Trade

Value

% of
Global
Trade

2001

1,350

3.5

1,105

3.2

2008

800

1.4

1,400

4.4

%
Change


59%

127%

中国的
电子工业

China’s
Electronics
Industry

©
TBI 2010

China’s Arms Sales

Arms sales to enhance foreign relationships and
generate revenue to support domestic defense
industry.

Source: Military And Security Developments

Involving the People’s of China 2010:A report To
Congress

中国的
电子工


China’s
Electronic
s Industry

©
TBI 2010

Comparative Growths In the Value Of High
End Electronics Production: 2005
-
2008

Source: OECD Information


Technology Outlook

Percent Per Annum Growth

China

USA

Control and
Instrumentation

25.39

3.78


Radio and Radar

17.81

2.94

Electronic Data
Processing

15.8

-
1.21


Telecommunication

15.56

-
0.78


Medical and Industrial

15.38

4.3

Components

15.17

2.18

中国的
电子工


China’s
Electronic
s Industry

©
TBI 2010

What about U.S. ?


C
OTS =
C
ommercial

C
ommercial =
C
hina


C
hina =
C
ontrol


C
ontrol =
C
ost


I
ncreasing
C
ontrol =
I
ncreasing
C
ost


C4I

Supply chain vulnerability for the most critical components of


the American war fighting strategy and tactics!

中国的
电子工


China’s
Electronics
Industry

©
TBI 2010

JSF Program

Pedigree of COTS Processors


Survey of ASIC/FPGA use on JSF


Results: 73 ASIC/FPGA types across 12
subsystems

FPGA

FPGA


Manufacture

Asia

Europe

Asia

Europe

USA

USA

JSF FPGA & ASIC Usage

ASIC


Manufacture

中国的
电子工


China’s
Electronics
Industry

©
TBI 2010

Everything
IS
Connected



China’s Electronics Industrial Base &
Policies


Western Tech transfer and its
contribution to China’s economic and
military development


Off shoring of production from West to
East

中国的
电子工


China’s
Electronics
Industry

©
TBI 2010


Given China’s freedom to make long range
strategic global business moves it’s impact on
the global competitive environment and
employment base the high
-
technology industries
cannot be discounted.


Every business must fully understand the






implications of the new China.


Those implications are constantly changing
-

as



China itself changes so does the
rest of the world changes hence the need to
constantly monitor




developments in
China.

Everything is Connected

中国的
电子工


China’s
Electronics
Industry

©
TBI 2010

Remember


If you are involved in anything that
implies risk to resources of any kind, you
absolutely

must stay on top of
developments on a daily basis to
understand the mosaic as it evolves.



The pace of change in the modern world
is too fast and too broad to take the
chance of missing what your competitor
-

nation, institution, producer, etc.
-

also has
access to.



Take your eyes off the ether and you’ll
miss critical intelligence that will
eventually be your undoing