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IoT ONE Limited | www.iotone.com | Accelerating the Industrial Internet of Things Selling to Made in China 2025: Opportunities & Challenges Selling to Made in China 2025 Opportunities and challenges presented by China’s initiative to become a global leader in quality manufacturing October 2018 Accelerating Adoption of the Industrial Internet of Things

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Page 1: Selling to Made in China 2025 - IoT ONE to Made...Selling to Made in China 2025: Opportunities & Challenges An important step in the future IoT ecosystem development in China will

IoT ONE Limited | www.iotone.com | Accelerating the Industrial Internet of Things 0

Selling to Made in China 2025: Opportunities & Challenges

Selling to Made in China 2025Opportunities and challenges presented by China’s

initiative to become a global leader in quality manufacturing

October 2018

Accelerating Adoption of the

Industrial Internet of Things

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IoT ONE Limited | www.iotone.com | Accelerating the Industrial Internet of Things 1

Selling to Made in China 2025: Opportunities & Challenges

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Table of ContentsIndustrial IoT market potential in China

Digitized manufacturing in China: Why now?

Current climate of Industrial IoT in China

Industrial IoT trends in China

China’s 13th Five-Year Plan

Made in China 2025

Overview

Priorities by region

Pilot projects (2015 – 16)

China Intelligent Manufacturing Solutions Vendor Alliance

Evaluating Made in China 2025

Organizations supporting industrial upgrading

Industrial IoT companies in China

Featured Case Studies

Summary

About IoT ONE

Selling to Made in China 2025: Opportunities & Challenges

IoT ONE Limited | www.iotone.com | Accelerating the Industrial Internet of Things 1

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IoT ONE Limited | www.iotone.com | Accelerating the Industrial Internet of Things 2

Selling to Made in China 2025: Opportunities & Challenges

An important step in the future IoT ecosystem development in China will be an accelerating shift from

market fragmentation to market integration, and from vertical industry convergence to horizontal

platform agglomeration.- Antonio Liu, Senior Market Analyst, IDC China

Industrial IoT market potential in China

Sources: IoT Analytics (2018), CEIS (2017), The Economist (2016), China Daily (2018)

Market demand for Industrial IoT applications in the Chinese Manufacturing Industry

Sources: Deloitte Research (2016)

The Government of China was the first to launch a

comprehensive Industrial Internet of Things (IoT) strategy,

announced in the ‘12th Five-Year Plan’ in 2011. According to IoT

Analytics, the industry will start to see some of the early

investments pay-off in 2018.

China’s IoT market has been growing at an annual rate of 20%.

The market exceeded 900 billion RMB in 2016 and is expected

to exceed 1.5 trillion RMB by 2020. IDC forecasts overall

market in China for IoT equipment will increase from 193 billion

USD in 2015 to 361 billion USD in 2020 – with Chinese

manufacturers spending $128 billion on industrial IoT alone.

$128 bn

$361 bn

China is already the world’s second largest market for Industrial

IoT technologies, despite initially-low adoption rates compared

to North America and Europe. Deloitte reports that China

outnumbers the amount of Smart City projects being piloted

than all other countries combined.

Pilot projects will be scaled on the back of an expansive IoT

infrastructure roll-out that aims to meet market demand and

deliver on national strategic priorities, such as innovation,

efficient water management, urban mobility and cyber security.

Such projects are being complemented by the ‘Made in China

2025’ manufacturing and ‘Internet+’ strategies. As opposed to

prior investment in Chinese industry, software and services will

be the key driver, contributing to over 60% of the market value.

Accenture reports that by embracing IoT in manufacturing,

China could add up to $736 billion to it’s GDP by 2030.

0 20 40 60 80 100

CX improvement

New products/services

New biz models

New markets

Improvement in core biz

Better pricing

Figure 4: How Companies Intend to Increase Revenue

(no. of companies)

Figure 1: China IoT Overall Kit and

IIoT Manufacturing Market Sizes in

2020

0 10 20 30 40 50

Lack of interoperability/standards

Ownership/security of data

Underqualified operators

Data quality

Lack of capability to carry out data…

Coordination inside the company

Cyber security

Inadequate budget

Figure 3: Biggest Painpoints for Companies Applying Industrial IoT Technologies

(% of companies)

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IoT ONE Limited | www.iotone.com | Accelerating the Industrial Internet of Things 3

Selling to Made in China 2025: Opportunities & Challenges

Digitalized manufacturing in China: Why now?

Since 1990, China’s global manufacturing output has

surged from less than 4% of global value to more than

25% today. It has become the ‘World’s Factory’.

However, China’s manufacturing sector has exhausted

the growth strategies of the last three decades. China

has saturated the market for low quality and low cost

goods, and many industries are overcapitalized yet

inefficient due to limited adoption of industrial software.

Furthermore, China’s competitiveness on the global

arena is weakened by labor costs that are rising faster

than labor productivity. Today, China’s robot density

ranks 23rd worldwide but the government intends to

make it into the top 10 most intensively automated

nations by 2020.

To overcome these challenges, an industry-wide move

towards digitalization and industrial automation has been

prioritized by the national government. China must

increase both productivity and output quality in order to

sustain GDP growth and move up the value chain.

631

488

309 303

223

189

145132

7158

34

74

0

100

200

300

400

500

600

Robots

per

10,0

00 e

mplo

yees

Figure 5: Robot-to-Employee Ratio in Manufacturing

Robot Density

World Average

Source: International Federation of Robotics (2017)

*2015 pricesSource: China Statistical Yearbook 2017

0

5,000

10,000

15,000

20,000

25,000

30,000

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Manufa

ctu

ring v

alu

e-a

dd (billion R

MB

)*

Avera

ge A

nnual W

age (R

MB

)*

Figure 6: Labor Cost vs Industry Value-add in Manufacturing

Average manufacturing worker annual wage Manufacturing value-add

Chinese manufacturing value-add is not keeping pace with labor costs

14%CAGR

12.7%CAGR

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IoT ONE Limited | www.iotone.com | Accelerating the Industrial Internet of Things 4

Selling to Made in China 2025: Opportunities & Challenges

Current climate of Industrial IoT in China

Source: World Economic Forum Industrial Internet Survey, IoT ONE Industrial Survey (2016)

Figure 8: Barriers to Industrial IoT Adoption for

Chinese Companies

0% 20% 40% 60% 80% 100%

Uncertain ROI(business case)

Legacy equipment

Lack of interoperabilityor standards

Security concerns

Technology immaturity

Lack of skilled workers

Privacy concerns

Societal concerns

North America

Europe

China

Figure 7: Industrialization Status of Chinese Companies, by Use Case

Many Chinese manufacturers have yet to begin

investing in Industry 4.0 technology, and many

continue to use Industry 2.0 technologies (labor

employed on simple production lines). They

possess huge potential to improve operational

efficiencies through implementing smart

manufacturing techniques in their processes.

However, many Chinese companies also note:

uncertainty in ROI, legacy equipment, technology

immaturity, and the lack of skilled labor as key

factors that significantly hinder their adoption of

smart manufacturing technologies. Much needs to

be done to address these obstacles, which the

Chinese Government has recognized and

implemented strategic measures that aim to boost

the development of smart capabilities in the

manufacturing sector.

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IoT ONE Limited | www.iotone.com | Accelerating the Industrial Internet of Things 5

Selling to Made in China 2025: Opportunities & Challenges

Industrial IoT trends in China

Source: Thomson Reuters (2018)

0

4

8

12

16

20

0

50

100

150

200

250

% o

f glo

bal M

&A

Outb

ound M

&A

Valu

e (

billion U

SD

)

Figure 9: Chinese Outbound M&A

Outbound M&A Value % of Global M&A

Chinese companies are ramping up efforts to

acquire foreign know-how

China is rapidly catching up in smart manufacturing

innovation and ownership of key intellectual properties in

smart manufacturing. There is rapid growth in both the

rate of innovation in technology fields and in the

acquisition of foreign enterprises. Despite a slowdown of

activity in 2017, due to government restrictions aimed at

managing financial risk, Chinese M&A grew 33% on

average for 5 years and accounts for 39% market share

of all M&A activity in countries along the New Silk Road,

known as the Belt and Road Initiative (BRI).

Innovation activities are more intensive for traditional

hardware, given that there is strong political support.

Conversely, high-tech innovation in the areas of cloud

computing, big data, and advanced robotics are

relatively weak. Chinese companies generally acquire

such technologies through M&A of foreign companies

with inherent advantages in high technology and

expertise.

However, as government policy rewards the registration

of patents regardless of its quality, the actual value that

these patents bring remain questionable.

0 200 400 600 800 1000 1200 1400

Traditional industrial robots

Wireless sensor networks

Smart sensors, embedded systems

Information security

Cloud & big data

Advanced robots

Figure 10: National Patent Families (Priority Applications) by Technology (Process and Use Patents Not Included)

China

United States

Germany

Source: Mercator Institute for China Studies (2016)

Domestic R&D is heavily concentrated in robotics and sensor technologies

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IoT ONE Limited | www.iotone.com | Accelerating the Industrial Internet of Things 6

Selling to Made in China 2025: Opportunities & Challenges

” Initiatives Led by IIoT-related Projects and Programmes

Science and Technology

Innovation 2030

• Ministry of Science and Technology

(Department of Innovation and

Development)

• Quantum communications and computing

• Smart grids

• Big data

• Smart manufacturing and robotics

• Key new materials R&D and application

Made In China 2025 • Ministry of Industry and Information

Technology (MIIT)

• Manufacturing innovation

• Advanced manufacturing capabilities

• IT and manufacturing technology integration

Internet +,

Internet Power

• Ministry of Science and Technology

• Ministry of Agriculture

• National Development and Reform

Commission

• Intelligent agriculture

• 5G mobile telecom

• Internet of Things

• Cloud computing

• Big data

New-model Urbanization

Construction

• Ministry of Housing and Urban-

Rural Development

• Smart cities

Healthy China 2030 • National Health and Family

Planning Commission

• Electronic health records

• Big data in healthcare

• Regional population health information platforms

Goals 2015 20205-Year

Growth

GDP

(trillion RMB, %) 67.7 >92.7>6.5

(YOY)

Services sector value-add

(% of GDP) 50.5 56 5.5

R&D spending/GDP

(%) 2.1 2.5 0.4

Internet penetration:

Fixed broadband (% households)40 70 30

Internet penetration:

Mobile broadband (% households)77 85 28

Invention patents

(per 10,000 people) 6.3 12 5.7

Since 1957, China has based its social and

economic development planning on a series of

Five-Year initiatives. The 13th and latest 5-year

plan was laid out for the period of 2016-2020

and focuses on seven development priorities,

including the acceleration of industrial upgrading

and transformation in both the emerging

industries and advanced services, as well as

traditional industrial and service sectors.

In particular, the plan encourages the integration

between initiatives such as ‘Made in China

2025’, ‘Internet+’, the BRI, and mass

entrepreneurship and innovation, with an

emphasis on craftsmanship.

The following is a summary of the plan, with

relevance to the Industrial IoT space in China.

China’s 13th Five-Year Plan

The strategy of ‘Made in China 2025’ and‘Internet+’ are inseparable, as we mustupgrade the manufacturing industry andboost smart manufacturing,

- China Premier Li Keqiang

Source: The 13th Five-Year Plan For Economic and Social Development of the People’s Republic of China (2016-2020)

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IoT ONE Limited | www.iotone.com | Accelerating the Industrial Internet of Things 7

Selling to Made in China 2025: Opportunities & Challenges

Made in China 2025: Overview

Made in China 2025 is an initiative to comprehensively

upgrade Chinese industry that is inspired by Germany's

"Industry 4.0" plan. With the help of smart manufacturing

technology, China aims to transform the country into a

highly capable manufacturing superpower in the coming

decades. The Chinese effort is broader in scope, due to

highly uneven efficiency and quality of Chinese producers.

Multiple challenges must be rapidly overcome if China is to

avoid being squeezed between emerging low-cost

producers and advanced economies.

The initiative focuses on:

• Improving innovative capabilities in the

manufacturing sector;

• Enhancing quality, industry value-add, and labor

productivity;

• Integrating IT and manufacturing technology; and

• Reducing environmental impact.

New-energy

Vehicles &

Equipment

Maritime

Equipment

& Shipping

Advanced

IT

Aerospace &

Aeronautical

Power

Equipment

New

Materials

Agricultural

Equipment

Automated

Machines &

Robotics

Rail

Transport

Equipment

Biopharma

& Medical

Products

10

Strategic

Industries

Institutional Mechanism Reform

Fair Market Environment

Financial Support Policies

Fiscal & Taxation Policy

Multi-level Talent Cultivation Systems

SME Enterprise Policy

Manufacturing Openness

Organization & Implementation System

State Council Oversight & Support

9 Support Mechanisms

Made in China 2025 is unique in scope and scale. It focuses on the entire manufacturing process, promotes the development

of both traditional and advanced industries and relies heavily on market incentives. Despite its market-orientation, the plan is

guided by government agencies and supported by well financed state-led projects aimed at increasing R&D spending and

incentivizing multinational companies to shift R&D resources to China. Pilot programs started in 2015 as a measure to

promote intelligent manufacturing and launched more than 60 projects in 2016 and 97 in 2017.

Manufacturing Innovation Capability

Integration of IT & Industry

Fundamental Industrial Capabilities

Quality & Branding

Green Production

Breakthroughs in Major Areas

Manufacturing Structural Adjustment

Service-oriented Manufacturing

Manufacturing Internationalization

9 Strategic Priorities

Source: China Daily (2018)

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IoT ONE Limited | www.iotone.com | Accelerating the Industrial Internet of Things 8

Selling to Made in China 2025: Opportunities & Challenges

Made in China 2025: Priorities by region

*Qingdao and other major manufacturing cities in Shandong

Source: UK Trade & Investment, China-Britain Business Council (2016)

Ag

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ipm

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Ae

rosp

ace

& A

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utical

New

-en

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Eq

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me

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Bio

ph

arm

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Me

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Pro

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cts

ICT

Ne

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ate

ria

ls

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North China

Beijing ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔

Shenyang ✔ ✔ ✔ ✔ ✔

Tianjin ✔ ✔ ✔ ✔

Changchun ✔ ✔ ✔

East

China

Shanghai ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔

Suzhou ✔ ✔ ✔ ✔ ✔

Nanjing ✔ ✔ ✔ ✔

Qingdao* ✔ ✔ ✔ ✔

Ningbo ✔

Central

China

Wuhan ✔ ✔ ✔ ✔ ✔

Changsha ✔ ✔ ✔ ✔

Xi’an ✔ ✔ ✔

South China

Shenzhen ✔ ✔ ✔ ✔ ✔

Guangzhou ✔ ✔ ✔

West

China

Chongqing ✔ ✔ ✔ ✔ ✔

Chengdu ✔ ✔

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Selling to Made in China 2025: Opportunities & Challenges

No. Pilot Project Name Company / Institute Province

1 Industrial Cloud Manufacturing For Aerospace Products Beijing Aerospace Science & Tech Company Beijing

North

China

(13)

2 Smart Fertilizer Manufacturing And Services Sinochem Fertilizer Company Beijing

3 Intelligence Service Cloud For Mining And Metallurgical Industry General Research Institute of Mining & Metallurgy Beijing

4 Intelligent Control Systems Beijing Advantage Systems Engineering Company Beijing

5 Microelectronics Intelligent Assembly China Electronics Technology Group Corporation Shanxi

6 Smart Aluminum Production United Aluminium Company Inner Mongolia

7 Smart Dairy Production Yili Industrial Group Company Inner Mongolia

8 Metallurgical Digital Mines Anshan Iron & Steel Group Mining Company Liaoning

9 Intelligent Machine Tools Shenyang Machine Tool Group Liaoning

10 Intelligent Medical Imaging Equipment Shenyang Neusoft Medical Systems Company Liaoning

11 Intelligent Power Equipment Service Cloud Platform Xi’an, Shaanxi Drum Power Company Shaanxi

12 Collaborative Development & Regional Aircraft Manufacturing Xi’an Aircraft Industry Group Shaanxi

13 Smart Car Foundry Sharing Group Company Ningxia

14 Intelligent Hot-Rolled Steel Plant Baoshan Iron & Steel Company Shanghai

East

China

(19)

15 Intelligent Coal-Mining Mechanical Equipment World Technology Company Shanghai

16 Intelligent Network For Automotive Production Shanghai International Automobile City Group Shanghai

17 Smart Factory For Household Products Meike International Houseware Company Jiangsu

18 Smart Factory For Shipbuilding Nantong COSCO KHI Ship Engineering Company Jiangsu

19 Smart Production For TCM Jiangsu Kang Edge Pharmaceutical Company Jiangsu

20 Smart Factory For Food & Beverage Production Hangzhou Wahaha Group Zhejiang

21 Intelligent Manufacturing For Communications Equipment Eastern Communications Company Zhejiang

22 Intelligent Manufacturing For Electronic Glass Rainbow Hefei Company Anhui

23 Smart Petrochemical Plant China Petroleum & Chemical Corporation Jiangxi

24 Intelligent Manufacturing For Helicopter Rotor Systems Changhe Aircraft Industry Group Jiangxi

25 Intelligent Manufacturing For Tire Production Racewheel Jinyu Group Shandong

26 Intelligent Manufacturing For Cement China United Cement Group Co., Ltd. Shandong

27 Intelligent Manufacturing For Glass Fibre Taishan Glass Fiber Co., Ltd. Shandong

28 Intelligent Manufacturing And Integration For Diesel Production Weichai Power Co., Ltd. Shandong

29 Intelligent Manufacturing For Home Appliances Haier Group Company Shandong

30 Intelligent Manufacturing For Dyeing Of Tins Shandong Kangping Group Shandong

31 Clothing Customization Qingdao Red Link Group Shandong

32 Industrial Innovation In Cloud Services Platforms Application of Science & Technology Company Shandong

33 Intelligent Manufacturing For Optic Fibre Optical Fiber & Cable Company HubeiCentral

China

(4)

34 Integrated Intelligent Manufacturing For Engineering Machinery Sany Group Hunan

35 Industrial 3D Printing Systems Hunan Huasheng Shu-Tech Company Hunan

36 Intelligent Hydraulic Parts Manufacturing Plant AVIC Liyuan Hydraulic Guizhou

37 Intelligent Injection Molding Equipment And Services Borch Machinery Company Guangdong

South

China

(7)

38 Intelligent Manufacturing For TV Equipment Shenzhen Skyworth - RGB Electronics Guangdong

39 Intelligent Manufacturing For Mobile Terminals Dongguan Jin Sheng Precision Components Guangdong

40 Intelligent Manufacturing For Keyboard Integration Shenzhen Pennefather Science and Technology Guangdong

41 Laser Cutting Machine Intelligent Manufacturing Hans Laser Technology Industry Group Guangdong

42 Smart Smelting Plant CHALCO Guangxi Guosheng Rare Earth Co. Guangxi

43 Intelligent Manufacturing For Pharmaceutical Products Plymouth Hainan Pharmaceutical Company Hainan

44 Intelligent Manufacturing For Automotives Chongqing Changan Automobile Chongqing West

China

(3)

45 Intelligent Manufacturing For TV Equipment Sichuan Changhong Electric Sichuan

46 Integrated Intelligent Manufacturing For Transformers TBEA Company Xinjiang

Made in China 2025: Pilot projects (2015 – 16)

Under the Made in China 2025 initiative, the Ministry of Industry and Information Technology (MIIT) has funded a total of 46

smart manufacturing pilot projects in 2015 and 64 projects in 2016 across the 10 strategic industries.

Made in China 2025 – Funded Pilot Projects in 2015

Source: Ministry of Industry and Information Technology (2015)

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Selling to Made in China 2025: Opportunities & Challenges

Made in China 2025 – Funded Pilot Projects in 2016

No. Pilot Project Name Company / Institute Province

1 Remote Operation And Maintenance For Sewing Equipment Beijing Dahao Technology Corp.,LTD Beijing

North

China

(17)

2 Intelligent Manufacturing For Pressure Calibration Devices Beijing ConST Instruments Technology Inc. Beijing

3 Intelligent Servo Motor Digital Workshop Beijing CTB servo Co., Ltd Beijing

4 Intelligent Manufacturing For Modern TCM TASLY PHARM. Tianjin

5 Intelligent Factory For Iron And Steel Production Enterprises HBIS Group Tangsteel Company Hebei

6 Smart Factory For Cement Production Tangshan Jidong Cement Co., Ltd. Hebei

7 Smart Workshop For LCD Glass Production Shijiazhuang Xuxin Optoelectronic Technology Co., Ltd. Hebei

8 Intelligent Manufacturing For Alumina Shanxi Fu Sheng Aluminum Co. Ltd. Shanxi

9 Intelligent Manufacturing For Dairy Products China Mengniu Dairy Company Limited Inner Inner Mongolia

10 Remote Operation And Maintenance For Industrial Blowers Shenyang Blower Works Group Corporation Liaoning

11 Intelligent Manufacturing For CNC Machine Tools Dalian Machine (Numerical Control) Tools Group Liaoning

12 Remote Operation And Maintenance For Power Generation Equipment Haerbin Electric Machinery China Heilongjiang

13 Intelligent Manufacturing For Small Inertial Devices Avic Xi'an Automatic Control Research Institute Shaanxi

14 Intelligent Manufacturing For Energy-Saving Heavy Vehicles Shaanxi Fast Gear Co.,Ltd. Shaanxi

15 Smart Factory For Coal Processing China Coal Shaanxi Yulin Energy and Chemical Co.,Ltd. Shaanxi

16 Intelligent Manufacturing For Smart Terminals Xiaan ZET Communication Terminal Technology Co.,Ltd Shaanxi

17 Digital Factory For Intelligent Control Valves Wuzhong Yibiao Ningxia

18 Collaborative Manufacturing Network For C919 Aircraft Commercial Aircraft Corporation of China Ltd Shanghai

East

China

(26)

19 Smart Manufacturing For Air Conditioning Compressors Shanghai Highly (Group) Co., Ltd Shanghai

20 Intelligent Manufacturing For IoT Modules Shanghai Chenxing Ximutong Electronic Technology Shanghai

21 Smart Workshop For Color Filters Manufacturing INESA (Group) Co., Ltd. Shanghai

22 Intelligent Manufacturing Of Heavy Vehicles Faw Jiefang Automotive Co. Jiangsu

23 Intelligent Manufacturing Of High-Performance Lithium Batteries ZTT Energy Co.,LTD. Jiangsu

24 Smart Chemical Refinery Plant In Zhenhai Sinopec Zhenhai Refining & Chemical Company Zhejiang

25 Intelligent Capabilities For Knitwear Customization Ningbo Cixing Co.,Ltd. Zhejiang

26 Mass Customization For Clothing And Costumes Zhejiang SAINT ANGELO Clothing co., LTD, Zhejiang

27 Intelligent Manufacturing For Kitchen Appliances Hangzhou Robam Industrial Group Co.,Ltd Zhejiang

28 Smart Factory For Glass Displays Wuhu Dongxu Optoelectronic Technology Co., Ltd. Anhui

29 Intelligent Manufacturing Of Industrial Powdered Explosives Anhui Jiangnan Chemical Industry Co., Ltd Anhui

30 Smart Factory For Automotive Windscreens And Windows Fujian Fuyao Group Fujian

31 Collaborative Manufacturing Network For Textile Production Quanzhou Haitian Material Technology Corporation Fujian

32 Intelligent Manufacturing For Paper Tissue Fujian Hengan Group Fujian

33 Smart Factory For Printed Circuit Boards Production Xiamen Hongxin Electron-tech Co., Ltd. Fujian

34 Intelligent Manufacturing For LED Lighting Zhangzhou Leedarson Lighting Fujian

35 Intelligent Copper Smelting Plant Jiangxi Cooper Co.,Ltd. Jiangxi

36 Intelligent Manufacturing For Chinese Health Products Jiangzhong Pharmaceutical Co.,Ltd. Jiangxi

37 Intelligent Manufacturing For High-Speed Rail Components CRRC Qingdao Sifang Co.,Ltd. Shandong

38 Digital Workshop For Precision Machinery Parts And Components Shandong Weida Machinery Co., Ltd. Shandong

39 Intelligent Manufacturing For Environmentally Friendly Tires Doublestrar Group Shandong

40 Smart Fluorine Chemical Factory Dongyue Group Ltd. Shandong

41 Smart Fertilizer Production Plant LUXI Group CO., LTD. Shandong

42 Remote Operation And Maintenance For Healthy Eating Appliances Joyoung Co.,Ltd Shandong

43 Intelligent Manufacturing For Wearables Goertek Inc. Shandong

44 Intelligent Manufacturing For Buses Zhengzhou Yutong Group Co.,Ltd Henan

Central

China

(8)

45 Digital Workshop For Engineering And Electrical Equipment For Ships Wuhan Marine Machinery Plant Co.,Ltd Hubei

46 Intelligent Manufacturing For Industrial Detonators Hubei Weidong Chemical Industry Stock Co.,LTd Hubei

47 Intelligent Manufacturing For Smart HVAC Systems Midea Group Wuhan Refrigeration Equipment Co.,Ltd Hubei

48 Intelligent Manufacturing For Alcoholic Tonic Jingpai Company Hubei

49 Intelligent Manufacturing For Smart Power Management Terminal Wasion Group Ltd Hunan

50 Smart Phosphorus Chemical Factory Fuwen Group LTd. Guizhou

51 Intelligent Manufacturing For Smart TVs Hisens Group Guiyang Hisens Electrical Co.,Ltd Guizhou

52 Mass Customization For Home Furniture Foshan Wision Furniture Co.,Ltd Guangdong

South

China

(8)

53 Intelligent Manufacturing For Pill-Form Medicine Livzon Pharmaceutical Group Inc., Guangdong

54 Intelligent Manufacturing For Chinese Herbal Medicine Kangmei Pharmaceutical Co.,LTd Guangdong

55 Intelligent Manufacturing For Smart Glass Dongguan Rui Da Technology Co.,Ltd Guangdong

56 Smart Workshop For 8.5-Generation LCD Devices Production Shenzhen China Star Optoelectronics Technology Co., Ltd Guangdong

57 Intelligent Manufacturing For Self-Service Financial Kiosks GRG Banking Co.,LTd Guangdong

58 Integrated Intelligent Manufacturing Of Digging Machinery LiuGong Machinery Co.,LTd Guangxi

59 Intelligent Manufacturing For Instant Coffee Dehong Hogood Coffee Co., Ltd. Yunnan

60 Intelligent Manufacturing Of Radar Antenna Systems Chengdu Jindian Co.,LTd Sichuan

West

China

(5)

61 Remote Operation And Maintenance For Wind Power Equipment Xinjiang Goldwind Science & Technology Co.,Ltd Xinjiang

62 Digital Oilfield In Xinjiang Xinjiang Oil Field of PetroChina Co.,Ltd Xinjiang

63 Smart Chlor-Alkali Plant Xinjiang Tianye Co.,Ltd Xinjiang

64 Intelligent Plant For High Purity Crystalline Silicon Xinte Energy Co.,Ltd. Xinjiang

Source: Ministry of Industry and Information Technology (2016)

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Selling to Made in China 2025: Opportunities & Challenges

Made in China 2025: Pilot projects (2015 – 16)

(by region)

Supporting Initiatives: Internet+

The ‘Internet+’ initiative plans to integrate the mobile

Internet, cloud computing, big data and the Internet

of Things with traditional industries as a means to

encourage the healthy development of e-commerce,

industrial networks, Internet banking, and to enable

Internet companies to increase their international

presence.

The Chinese government has set up a 40 billion RMB

investment fund to promote new industry innovation and

entrepreneurship under the ‘Internet+’ initiative.

China is seeking leadership in new industries and technologies that they’re not yet incumbent market leaders in. By

2025, ‘Internet+’ is intended to become a driving force for economic innovation and development that will accelerate the

development of new economic models with Chinese market leaders at the center of value creation.

1-3 4-6 7-9 10+

Sewing equipment remote operation

and maintenance service

- Beijing Dahao Technology

Air-conditioner compressor

intelligent manufacturing

- Shanghai Highly (Group)

Energy-saving transmission of heavy

truck intelligent manufacturing

- Shaanxi Fast Gear

Digital oil field

Xinjiang Oil Field of PetroChina

Number of Pilot Projects

Source: Ministry of Industry and Information Technology (2016)

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Selling to Made in China 2025: Opportunities & Challenges

Made in China 2025: China Smart

Manufacturing Solution Vendor Alliance

On November 30, 2016, Deputy Minister of Industry and

Information Technology, Xin Guobin, announced the

formation of the China Intelligent Manufacturing Solution

Vendor Alliance in Beijing, marking an important milestone

in the development of smart manufacturing in China. This

alliance aims to bring together intelligent manufacturing

systems solution providers with industrial end-users and

research institutes to facilitate collaboration for technology

research, development of industry-specific applications,

and the promotion of an integrated platform for the

exchange of intelligent manufacturing system

technologies and know-how.

Source: Gongkong.com (2016)

Alliance Management Committee Members

Beijing Research Institute of Automation for Machinery Industry 北京机械工业自动化研究所

Baidu 北京百度网讯科技有限公司

China Industrial Aerospace Center (Jinhang Digital) 金航数码科技有限责任公司

China Telecom 中国电信集团公司

Hollysys 和利时科技集团有限公司

Huawei 华为技术有限公司

Janus 东莞劲胜精密组件股份有限公司

PCITC 石化盈科信息技术有限责任公司

Shanghai Institute of Process Automation & Instrumentation (SIPAI) 上海工业自动化仪表研究院

Shanghai MJ Intelligent System 上海明匠智能系统有限公司

Shenyang Machine Tool Group (SYMG) 沈阳机床(集团)有限责任公司

Siasun 沈阳新松机器人自动化股份有限公司

SIPPR Engineering Group 机械工业第六设计研究院有限公司

13Management Committee

members

41Member companies &

organizations

Preferred accessto proposed Made in China 2025 projects

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Selling to Made in China 2025: Opportunities & Challenges

Source: Gongkong.com (2016)

Member Companies / Organisations

Aliyun Cloud Computing 阿里云计算有限公司

Aupu Maisi Technology Co. 昆明奥普迈思科技有限公司

Automotive Engineering Corporation 中国汽车工业工程有限公司

Beijing Aritime Intelligent Control Co. 北京金自天正智能控制股份有限公司

Changhong 四川长虹智能科技有限公司

China Academy of Machinery Science and Technology 机械科学研究总院

China Information Security Research Institute 中国信息安全研究院有限公司

China Sky Technology System 中天科技系统有限公司

CISDI Engineering 中冶赛迪集团有限公司

CSIC 716 Research Centre 中船重工七一六研究所

CSIC PRIDe 中船重工鹏力(南京)智能装备系统有限公司

Dahe Zhixin Technology 郑州大河智信有限公司

e-works 武汉制信科技有限公司

Gongkong 工控网(北京)信息技术有限公司

GSK CNC Equipment 广州数控设备有限公司

Haier 青岛海尔工业智能研究院有限公司

HiScene 上海亮风台科技有限公司

Hualong Xunda Technology 深圳华龙迅达科技有限公司

Huazhong CNC 武汉华中数控科技有限公司

JEE Automation Equipment 巨一自动化装备有限公司

Jike Machinery Technology Development Co. 机科发展科技股份有限公司

Kunchuan Design and Research Institute 昆船设计研究院

Kutesmart 青岛酷特智能股份有限公司

Kyland Technology 北京东土科技股份有限公司

MCC Capital Engineering and Research Incorporation (CERI) 中冶京诚工程技术有限公司

Mianyang Dingxin Intelligent Equipment Co. 四川绵阳鼎鑫智能装备有限公司

Phoenix Contact 菲尼克斯(中国)投资有限公司

Scientialia 浙江海宁辛帝亚自动化科技有限公司

Shanghai Electrical Apparatus Research Institute (Group) 上海电器科学研究院

Shenyang Institute of Automation Chinese Academy of Sciences 中国科学院沈阳自动化研究所

Shougang Automation Technology Co. 首钢自动化信息技术有限公司

Sina-Newchance New Energy Technology Corporation 上海众联能创新能源科技股份有限公司

Sugon Information Technology 曙光信息产业股份有限公司

Supcon 浙江中控技术股份公司

Tiandi-Marco Electro-Hydraulic Control System Co. 北京天地玛珂电液控制系统有限公司

Tianjin C-E Electrical Automation Co. 天津一重电气自动化有限公司

University of Science and Technology Beijing 北京科技大学高效轧制国家工程研究中心

Zeta Technology Co. 杭州哲达科技有限公司

Zhengda Intelligent Technology Co. 郑州郑大智能科技有限公司

Zhengdawulian 洛阳郑大物联有限公司

Zhenhang Intelligent Technology Co. 上海滇航智能科技有限公司

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Selling to Made in China 2025: Opportunities & Challenges

The broad application of advanced manufacturing

systems and equipment, and the introduction of

smart facilities and smart products can help

increase synergy across China’s manufacturing

sector.

Source: KPMG (2016)

China will develop its own version of the Industrial

Internet.

This will be characterised by scale, speed,

volatility, low-cost and a strong role of the

government.

Source: STM Stieler (2016)

“The strategy’s effectiveness is limited by the

mismatch between political priorities and

industry needs, the fixation on quantitative targets,

inefficient allocation of funding and campaign-style

overspending by local governments. The lack of

bottom-up initiative and investment is a

pronounced weakness of Made in China 2025.

Source: Mercator Institute for China Studies (2016)

“…China’s industrial relations system notoriously

lacks legal and contractual safeguards for

workers…slow pace of such reforms and the

potentially massive impact of automation on China’s

labor markets raise fundamental questions of

social stability.

Source: China Policy Institute (2016)

“'Made in China 2025' is a very ambitious and

aspirational goal…it smacks more of rhetorical

flourish than a credible commitment.

The blueprint was also unclear about who would

implement the plan - market forces or the National

Development and Reform Commission, the

powerful agency in charge of economic planning.

Source: Stephen Roach, former chairman of Morgan Stanley Asia (2015)

Evaluating Made in China 2025

Made in China 2025 is a reflection of China’s

sophisticated and strategic industrial policy. The

strategy will rapidly increase the global

competitiveness of key Chinese companies,

selectively targeting the most important industries of

the future.

Made in China 2025 is a forceful and smart

challenge to the leading economies of today.

Source: Mercator Institute for China Studies (2016)

…vocational training may be China’s most

serious skill bottleneck…there is a growing

scarcity in many industries of well-trained and

experienced skilled workers who can run smart

robots, industrial 3D printers, and Internet-based

information networks.

Source: East-West Center (2016)

PRO CON

China’s manufacturing industry is poised for rapid

transformation under digital and IIoT technologies,

as many firms do not have legacy systems and

are more flexible to adopt technologies that can

automate processes, reducing rising labour costs.

Source: PwC (2016)

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Selling to Made in China 2025: Opportunities & Challenges

Organizations supporting industrial reform

Ministry of Industry and Information Technology (MIIT)The state agency of China responsible for regulation and development of the Internet,

communications, production of electronic and information goods, software industry and the

promotion of the national knowledge economy.

Key Documents & Initiatives

• Guiding opinions on Improving the Innovation System of Manufacturing and Promoting

the Establishment of Manufacturing Innovation Centers

关于完善制造业创新体系,推进制造业创新中心建设的指导意见

• Special Program for Innovative Development in Smart Hardware Industry (2016-2018)

智能硬件产业创新发展专项行动(2016-2018年)

• Development Plan for Innovation Capacity in Industrial Technology

产业技术创新能力发展规划

• Guideline for Intellectual Property Rights in Manufacturing Innovation Centers

制造业创新中心知识产权指南

National Development and Reform Commission (NDRC)A macroeconomic management agency under the Chinese State Council with broad

administrative and planning control over the Chinese economy. The NDRC's functions are to

study and formulate policies for economic and social development, maintain the balance of

economic development, and to guide the restructuring of China's economic system.

Key Documents & Initiatives

• Plan for the Development of the Robotics Industry (2016-2020)

机器人产业发展规划(2016-2020年)

• Special Programme for Innovative Development in Smart Hardware Industry (2016-2018)

智能硬件产业创新发展专项行动(2016-2018年)

Alliance of Industrial Internet (AII)The AII is a quasi-governmental organization under the Ministry of Industry and Information

Technology (MIIT) that enabled over 300 members from industry and academia to provide

input regarding government policies related to the Industrial Internet.

Key Documents & Initiatives

• Whitepaper for Industrial Internet Architecture (Version 1.0)

工业互联网体系架构(版本1.0)

• Standards Framework for Industrial Internet Systems

工业互联网标准体系框架

China Academy of Science -

Institute of Automation (CASIA)

The leading national-level institution for

automation research.

China Association for Science

and Technology (CAST)

CAST organizes academic exchanges,

collaborative research projects, and

other activities.

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Selling to Made in China 2025: Opportunities & Challenges

IoT ONE tracks >300 IIoT companies in China

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Selling to Made in China 2025: Opportunities & Challenges

Featured China IIoT Case Studies

To view our complete database of public case studies, visit www.iotone.com/casestudies

Process Automation

Process & Equipment Monitoring

Predictive Maintenance

Data Acquisition and Management

Production Automation System for

Controlling and Monitoring Tobacco

Plants in China

Siemens’ Industrial Automation

Production and R&D Base in

Chengdu

Fault Analysis for Tunnel Boring

Machine

Field Device Asset Management For

Chemical Company in China

Logistics Management System For

Detergent Company in Zhejiang

Enabling Real-Time Monitoring for

CompAir's Air Compressors

A Reliable Power Control Automation

System for a Steel Factory

Data Acquisition and Remote

Management Platform for Texhong

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Selling to Made in China 2025: Opportunities & Challenges

Featured Case Studies: Process Automation

IoT ONE Limited | www.iotone.com | Accelerating the Industrial Internet of Things 18

A Tobacco Production Automation System for Controlling and Monitoring

Tobacco Plants in China

Siemens’ Industrial Automation Production and R&D Base in Chengdu

The Challenge

• Siemens expanded its industrial automation production

base in Chengdu and customers expected quality to

match that of products manufactured in Germany.

Siemens required a digital enterprise platform to enable

quality management and continuous improvement.

Operational Impact

• Accelerated time-to-market for new products.

• Allowed unprecedented production flexibility for

customization and small-batch production.

The Solution

• Siemens utilized their NX and Teamcenter PLM

software to develop a digital enterprise platform which

is based on the PROFINET protocol to interface with

the factory’s MES.

• The platform allowed a high degree of integration

between multiple systems, such as ERP, PLM, MES,

and TIA, to achieve complete production process

monitoring and facilitate production planning and

logistics.

Quantitative Benefits

• Achieved more than 99% first time pass rate for

quality assurance checks.

The Challenge

• For a branded tobacco producer in China, calculating

production volume in a tobacco plant is troublesome and

error-prone without the aid of computers.

• PC-based monitoring systems that automatically collect

production data and keep records can greatly improve in-

factory logistics management and machinery uptime and

maintenance.

Operational Impact

• Reduced manual labor for cigarette counting.

• Reduced maintenance work for engineers.

• Improved overall efficiency of in-factory logistics.

• Improved operational visibility for factory management.

The Solution

• Advantech’s PC-based monitoring machines were

installed next to manufacturing machines to

collect data from existing PLCs. They transmit data up

to central control room for analysis and action.

• The data is also shown on touchscreen monitors,

which allows operators in the plant to identify issues in

real-time and process issues in real-time from any

location in the plant.

• This solution lays the foundation for more advanced

analytics and automation in the future by enabling data

ingestion and analytics.

Selling to Made in China 2025: Opportunities & Challenges

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Selling to Made in China 2025: Opportunities & Challenges

Featured Case Studies: Predictive Maintenance

IoT ONE Limited | www.iotone.com | Accelerating the Industrial Internet of Things 19

Fault Analysis for Tunnel Boring Machine

Field Device Asset Management for Chemical Company

The Challenge

• Only two workers were assigned to maintain thousands

of intelligent instruments in three production units. They

could do little more than react to device issues as they

appeared. This costly maintenance method inevitably led

to unexpected downtime from equipment failure.

• Plant management recognized the need to change from

reactive to predictive maintenance for all assets, but help

was needed in implementing such a technology-based

initiative.

Operational Impact

• Reduced costs through predictive maintenance.

• Unexpected downtime cut by concentrating maintenance on highest priority equipment.

• Equipment reliability improved through proactive asset management.

The Solution

• Emerson’s AMS™ Suite: Intelligent Device Manager

predictive maintenance software is designed to alert

plant personnel if performance of intelligent field devices

begins to deteriorate.

• By providing direct access to the predictive diagnostics

generated by smart field devices, users can respond

quickly with corrective action to resolve instrument and

valve issues in time to prevent unexpected downtime.

The Challenge

• Shanghai Tunnel Engineering Co. (STEC) is the industry

leader for municipal engineering in China.

• In the process of tunnel construction, there have been

multiple cases of boring machine failures due to

operational faults with the blade machinery. This has led

to serious errors for tunnel construction and even

incidents of spindle breakages.

• Such failures require the machinery parts to be dragged

out of the tunnel and sent to Germany for maintenance,

which can take up to several months, resulting in

massive unscheduled downtime, high maintenance

costs, delays in construction schedules, and negative

social impacts to the community.

Operational Impact

• Identified root cause of failure, allowed for prevention of

future accidents.

• Minimised unscheduled downtime by enabling forward

planning to address expected maintenance issues.

The Solution

• Neucloud leveraged its previous experience in industrial

big data analysis to construct a virtual model for the

critical components of the boring machine, as well as the

working conditions of the tunnel construction.

• This provided a cross-section overview of the fault for

analysis, and engineers were able to zoom in on the

direct cause of failure and exact time of occurrence.

Selling to Made in China 2025: Opportunities & Challenges

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Selling to Made in China 2025: Opportunities & Challenges

Featured Case Studies: Process & Equipment

Monitoring

IoT ONE Limited | www.iotone.com | Accelerating the Industrial Internet of Things 20

Logistics Management System For Detergent Company in Zhejiang

Enabling Real-Time Monitoring for CompAir's Air Compressors

The Challenge

• CompAir, an air compressor manufacturer, faced

problems with market saturation and growing demand for

energy-saving solutions from customers.

• After-sales customer support quality was worsening due

to the wide geographical distribution of customers and

limited capability of the customer support teams to

manage requests.

Operational Impact

• Improved after-sales customer support and loyalty.

• Increased information transparency allowing energy-

saving measures to be taken.

• Reduced operational costs through optimizing

manpower allocation for maintenance efforts.

The Solution

• Mixlinker provided a real-time remote monitoring

solution that allowed CompAir to access various air

compressor data.

• The system can also generate fault alarms whenever

required, prompting maintenance personal to address

these issues in a timely manner. Critical air compressor

components trigger alarms based on a pre-determined

duration for maintenance to be done.

• The solution enables management to better segment

different customers by anticipated need and priority.

The Challenge

• With growing production scale and market demand, a

chemical company in Zhejiang’s detergent industry

looked for a complete digitalized solution to monitor their

production lines and provide a mature process

management and control system. This solution needed to

fit their management procedures, as well as meet

growing demand for logistical track-and-tracing.

Operational Impact

• Improved logistical efficiency by reducing turnover time.

• Reduced operational costs in tagging packages.

• Eliminated need for marketing staff to manage logistical

delays for product launches.

The Solution

• Innotel successfully implemented a logistics tracking

information system with anti-tampering capabilities,

which combines the use of mobile networking, sensor

technology and IT.

• This enabled a complete LMS solution providing

intelligent RFID warehouse tracing and tracking,

facilitating logistics and marketing management along

with other integrated service platforms.

Selling to Made in China 2025: Opportunities & Challenges

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Selling to Made in China 2025: Opportunities & Challenges

Featured Case Studies: Data Acquisition and

Management

A Reliable Power Control Automation System for a Steel Factory

Data Acquisition and Remote Management Platform for Texhong

The Challenge

• One of the largest steel factories in China needed proper

communication control units for data processing and

protocol conversion with the devices at remote field sites.

• The company currently used IPCs that did not enable a

distributed system at the front-end sites or a centralized

management platform at the back-end control center.

Operational Impact

• Greater flexibility for multi-level open data transmission.

• Stability for easy integration with third-party devices.

• Ready and effective protocol conversion that facilitates

data communication between legacy devices.

The Solution

• MOXA’s embedded computers were placed in four

different sections, mainly working as the front-end

telecommunication units for collecting the data from the

remote devices, such as power meters, transceivers,

and communication units.

• Data collected at the front-end site can be analyzed,

processed, and then transmitted to the back-end

control center, where another computer is also

deployed.

• The computers’ open platform makes it easy to create

a communications link between the back-end host and

the front-end sites.

Selling to Made in China 2025: Opportunities & Challenges

IoT ONE Limited | www.iotone.com | Accelerating the Industrial Internet of Things 21

The Challenge

• Texhong, a major textile manufacturer in East China,

faced issues with communication of on-site information to

the operations headquarters.

• Production data received were not up-to-date and was

unable to give an accurate overview of the company’s

overall operations, hindering the company’s ability to

effectively assess and strategize for the future.

• Production equipment communicate using a variety of

protocols which are difficult to adapt to a common

interface.

Operational Impact

• Improved operational efficiency and transparency from

real-time continuous monitoring.

The Solution

• ForceCon’s data acquisition and remote management

platform connected 300,000 data points to obtain

production data from equipment and remotely send

scheduled instructions to production bases. The

platform also provided an interface to integrate

seamlessly with Texhong’s existing MES.

• The system notifies of any transmission failure in real-

time, and automatically generates reports of production

operations for analysis.

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Selling to Made in China 2025: Opportunities & Challenges

China’s Industrial IoT ecosystem is thriving due to strong support from the Chinese government through the

Made In China 2025 and Internet+ initiatives, as well as sustained investment by Chinese and international

technology leaders. Many Chinese manufacturers are now familiar with the fundamental technologies and

have begun seeking to increase their quality and cost competitiveness by investing in digitalization.

However, several bottlenecks continue to slow adoption by Chinese companies. The business processes

and shop floor workforces of Chinese manufacturers are often poorly suited to make use of analytics and

dynamic automation, and private manufacturers continue to face liquidity shortages due to the preference of

banks to loan to state-owned enterprises. Given these adoption challenges, the most significant near term

opportunities lie in low complexity solutions that address specific high value business objectives, such as

reducing asset downtime.

Summary

IoT ONE Limited | www.iotone.com | Accelerating the Industrial Internet of Things 22

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Selling to Made in China 2025: Opportunities & Challenges

About IoT ONE

"IoT ONE helps both vendors and end-users save time with structured case studies

covering challenges, solutions, and project impact in one glance.”

- Chief Commercial Officer, Urbiotica

"China needs more IoT execution and less hype. IoT ONE helps companies translate

ideas into actions and implement IIoT solutions.”

- CEO, Proudsmart

"IoT ONE provides valuable insight regarding the IoT landscape on the regional and

international scale. IoT is an emerging market, so identifying partners is very important."

- Senior Partner Manager, ThingWorx (PTC)

“IoT ONE has created a database for the Internet of Things that is comprehensive,

informative, up-to-date, and global. It is a first-class tool to inform your IoT-business”

- Business Development, AUVESY GmbH & Co. KG

"As an IoT enabling leader and founding member of Predix, I think IoT ONE is very

informative and useful for Accelerating Digital Transformation.”

- Senior Director, Technology Development, Predix (GE)

IoT ONE provides research and advisory services to help companies manage the

threats and opportunities brought by the Internet of Things.

RESEARCH PLAN BUILD

We access bottom-up

insight about how the

Internet of Things is

impacting your

customers, supply chains

and competitors.

We help increase the

competitiveness of your

products and operations

by evaluating and

prioritizing opportunities.

We help to design and

build an organization

capable of implementing

your Internet of Things

adoption strategy.

Page 25: Selling to Made in China 2025 - IoT ONE to Made...Selling to Made in China 2025: Opportunities & Challenges An important step in the future IoT ecosystem development in China will

IoT ONE Limited | www.iotone.com | Accelerating the Industrial Internet of Things 24

Selling to Made in China 2025: Opportunities & Challenges

Accelerating Adoption of the

Industrial Internet of Things

IoT ONE’s mission is to accelerate adoption of Industrial IoT technologies. We drive adoption by providing the

granular information that decision makers need to make investments in new technologies and projects.

It is widely believed that adoption of Industrial IoT technologies will reshape the global economy. However, the

understanding gap between technology vendors, systems integrators and end-users continues to prevent

adoption. Companies use our databases to identify, assess, and prioritize the solutions and partners they need to

achieve transformative business results. We focus on addressing three challenges that slow adoption:

• Executive leadership lacks sufficient understanding of the IIoT landscape to make confident strategic decisions

regarding product and project planning.

• Procurement managers have limited experience assessing IIoT vendors and technologies, which slows the

process of identifying the solutions that best meet their requirements.

• Operations teams lack experience implementing IIoT solutions, increasing implementation costs and risk.

We are always looking for opportunities to better serve our customers and users. To learn more about us or to

begin a discussion, email [email protected].

Kind regards,

Erik Walenza-Slabe

CEO, IoT ONE

Selling to Made in China 2025Opportunities and challenges presented by China’s

initiative to become a global leader in quality manufacturing