Intelligent Manufacturing Reshapes Global Trade

The global industrial revolutions have not only directly affected the global industrial layout but also profoundly reshaped global trade patterns. After the first industrial revolution, trade of commodities and raw materials increased sharply worldwide. After the second industrial revolution, economic globalization greatly accelerated and the global industrial division network expanded. After the third industrial revolution, the spread of information, technology and capital has made all countries in the world compose a community with shared interests.

In recent years, the new generation of communications technology has accelerated full penetration into production and consumption fields, which has redefined both the production process and consumption patterns. The global trend of intelligent manufacturing has increasingly become the norm, and global trade patterns have gradually changed.

For most countries in the world, foreign trade is a “mirror” to reflect the status of their industry in the global value chain. Now, many countries are carrying out strategic layout of intelligent manufacturing to reshape their global industrial competitiveness.

Overall, intelligent manufacturing is conducive to boosting global investment and trade growth, which will provide new momentum to help speed up the slow recovery of the world economy since the 2008 global financial crisis.

Comparing the representative intelligent manufacturing development plans of the United States, Germany, Japan and China, it seems that the major industrial countries tend to develop their strengths and avoid their weaknesses, actively seeking a development model for intelligent manufacturing that strengthens their comparative advantages.

Meanwhile, the varying development models of intelligent manufacturing of major countries have created new space for future global economic and trade cooperation.

Firstly, intelligent manufacturing will reshape the comparative advantages, and the level of intelligence will become the main determinant of global trade competitiveness. With the development of intelligent manufacturing, the competitive advantages of products will no longer be determined by cost competition, but by how to produce more personalized and higher value-added products with the help of more intelligent equipment, which will further widen the value gap between high and low value-added products and reconstruct the global value chain.

Moreover, the new equipment supporting the development of intelligent manufacturing belongs to technology and capital intensive products, which conforms to the comparative advantages of some countries.

Therefore, after extensive development of intelligent manufacturing, the comparative advantages of different countries will change drastically. Only by promoting practical cooperation can more people share the dividends of human technological progress and enhance the inclusiveness of global trade.

Secondly, intelligent manufacturing will promote the development of industrial integration, which will cause the distinction between goods and services trade to become more blurred. Considering that production work of the manufacturing industry will be mainly performed by high-efficiency and high-intelligence equipment in the future, the operations of manufacturing enterprises will shift to research and development, design, IT, logistics, marketing and other production services. Production services will become the bulk of the future manufacturing industry.

In addition, the internet environment will allow the products from the manufacturing industry to provide many intelligent services. For example, Apple’s mobile phone is an industrial product, but the company mainly focuses on research and development, design, marketing and other services, so that its users can enjoy good network services.

Intelligent manufacturing accelerates the integration of manufacturing and service industries as well as the integration of global trade in goods and services. Many innovation and start-up activities are expected emerge in fields with deep industrial integration, bringing more vitality to the global economy and trade. Therefore, countries around the world should look to reform the existing global trade statistical and governance systems to better adapt to the new pattern of global trade and enhance its innovation power.

Thirdly, intelligent manufacturing will change the employment structure and stimulate structural changes in populations benefiting from liberalization and facilitation of global trade, which demands that all countries strengthen policy communication and coordination. Demand for labor in the manufacturing sector will reduce as a result of the extensive use of intelligent equipment. The main employment group in the manufacturing industry will be professionals who provide service support for production.

The employment structure of the industry will develop towards a growing sector of service employment. Accordingly, all countries should strengthen cooperation in education, training and social security systems, jointly cope with the challenges brought by the adjustment of global trade patterns and enhance the inclusiveness of global trade.

Fourthly, intelligent manufacturing will promote the development of green industries and will also facilitate more environmentally friendly global trade. With the support of intelligent systems, enterprises can more accurately implement resource management, energy management and logistics management to reduce resource consumption and pollution emissions in production. This will help improve the efficiency of global production, circulation, consumption and resource recycling, effectively reducing the “carbon content” of global trade and promoting green development.

The development of intelligent manufacturing going in a high-end, service-oriented and green direction will inject impetus into economic globalization and create new opportunities for the inclusive, innovative, universally beneficial and green development of global trade.

At the same time, it may be accompanied by new adjustments of the foundation, competition modes and income distribution mechanisms of global trade, which requires pragmatic cooperation, enhanced policy coordination and joint efforts of all countries to promote the reform of the global trading system.

 
The author is an associate research fellow with the Institute of Industrial Economics under the Chinese Academy of Social Sciences.