PEIAC Sets 2013 Work Agenda: Transformation, Upgrading and Industry Self-Discipline for China’s Printing Sector

As 2013 gets underway, the 18th National Congress of the Communist Party of China has just concluded successfully. The strategic goals it set out are inspiring — and demanding. In the year ahead, China’s economic growth is trending downward, a sign that the economy has entered a transitional phase and that macroeconomic policy is placing less weight on the GDP growth rate. High-speed expansion is no longer the priority; structural adjustment is. The state will use a range of measures to manage the growth rate and pursue “progress while maintaining stability.” Having moved past the era of large-scale, rapid expansion, China’s economy must break with old path dependencies and follow a new path of industrialization. We therefore need to read the situation clearly, study and absorb the spirit of the 18th National Congress, and let the Scientific Outlook on Development guide our work.

I. Strengthen research on industrial transformation and upgrading

1. A deeper understanding of why transformation and upgrading matter

China’s printing equipment manufacturing sector has expanded its products by drawing on technologies from developed countries, giving that diffusion a distinctly imitative character.

Its technology strategy has largely been a “broad-front push”: moving across open ground into one product field after another. The road has been rough, but for the most part it retraces routes already taken by predecessors or currently taken by others, and competitive advantage comes from scaling up production fast. Transformation and upgrading, by contrast, demand the ability to renew products and innovate independently — that is, to move upward in every branch of the printing industry. Without it, a large share of domestic-brand enterprises will crowd into low-end terrain, with some trapped in low-level, look-alike competition that leaves them defenseless in a downturn.

The only real option, then, is to move up the value chain, seize the industry’s high ground and strategic commanding heights, drive progress through a pioneering spirit, and shift from a broad-front push to multi-dimensional industrialization. The transformation is already producing standouts in printing and equipment manufacturing, among them the model enterprises recognized by the General Administration of Press and Publication and a number of green printing representatives.

In equipment manufacturing, companies have emerged in offset press production (web and sheet-fed), digitalization, packaging postpress and consumables. They represent the advanced level of China’s printing and equipment manufacturing industry, and a few now rank among the world’s leaders. Even so, a considerable number of firms remain stuck in the low-to-mid range, and the pace of upgrading must accelerate.

1. The era of cheap resources is coming to an end

Rising wage costs and recruitment difficulties are now widespread, and not only along the southeast coast — inland provinces with large populations, such as Sichuan and Henan, face the same pressures. The 18th National Congress set a goal of doubling per capita income by 2020, and how to deliver that people-focused target is a question we cannot avoid. Moreover, much of today’s low pricing has come at the environment’s expense; as green strategies take hold, costs will rise noticeably. Moving from extensive to intensive operations and toward higher-value-added products is therefore an urgent task. While we continue to stress performance-to-price value, we must also start thinking about brand strategy.

1. Transformation requires certain conditions, chiefly motive and capability. Structural adjustment and upgrading accelerate when a company has both a strong drive to innovate and the means to do it. Reality is often the reverse: profitable firms have the capability but lack the drive, while struggling firms have the drive but lack the capability. In the year ahead we must be clear about why transformation matters, and analyze both where it should happen and how to carry it out.

II. Tackling common, pressing issues that hold the industry back

Following discussion and analysis, the association plans to work on the following fronts:

1. Given the small-scale, fragmented and disordered development of many enterprises, industry consolidation and restructuring should be encouraged. Which companies should grow bigger and stronger, and which should focus on specialization and depth, requires focused study and guiding opinions. Equipment and materials makers should align their transformation with what printing companies actually need, so that efforts hit the mark.
2. As homogeneous competition drags down industry profitability, the credit-integrity system and industry self-discipline need strengthening so the sector can develop in a healthy way.
3. Some enterprises have long-standing product quality problems, with repeated low-level production and little innovation. Beyond tighter quality management, standards development and administration must be reinforced to change today’s lagging standards.
4. Industrial policy research needs more attention. Tariffs and subsidies on key imported components and specialty raw materials directly affect the development of domestically made equipment. The association should study how the tariff lever can be used effectively — including differentiated treatment for export-oriented and domestic-sales enterprises — and present practical recommendations to government based on research.
5. Talent development across the board should be advanced to remove the constraints on the factors of production that limit industry growth.
6. Work should be done to make statistics genuinely useful to the industry and a sound basis for government decision-making.
7. Exhibitions should be reviewed and consolidated so they both advance the industry and ease the burden on companies.
8. Dedicated research on technological progress should be carried out, with a technology roadmap for China’s printing equipment manufacturing drawn up to provide macro guidance for industry decisions and to serve corporate development strategy.

The association will treat these topics as priorities, mobilize industry resources to study them, and list them as projects to be resolved.

In addition, the association will organize exhibitions and the China Printing Awards next year and, under the unified arrangements of the General Administration of Press and Publication, push forward green printing, digital printing and printing digitalization projects while tracking implementation of the 12th Five-Year Plan. Once the Central Economic Work Conference concludes, the association will set out specific plans for the coming year and share them with council members at an appropriate time.

2013 is the third year of the 12th Five-Year Plan — a pivotal year that bridges what came before and what comes next. We must lift our spirits, work hard, and, guided by the spirit of the 18th National Congress, do solid work on every front to revitalize China’s printing industry.

— Reprinted from China Packaging Network (pack.cn); original article: http://news.pack.cn/show-361987.html