At the 2025 World Smart Industry Expo (WSIE) on September 5, Dr. Zhaoyuan Ma, PhD in Physics from the University of Oxford and Fellow of the UK Institute of Physics, delivered a keynote speech titled "Smart Manufacturing in China: The Second Half of the Upgrade Game." Drawing on lessons from U.S. de-industrialization, Sheffield's re-industrialization, and China's development path, Dr. Ma offered deep insights into the future of Chinese manufacturing.

Lessons from U.S. industrial decline

"Manufacturing is not only about economic development; it is the cornerstone of employment and social stability," said Dr. Ma.

China's manufacturing sector now stands at a critical juncture - shifting from quantitative accumulation to qualitative breakthroughs. While China leads globally in sectors such as electric vehicles, photovoltaics, power batteries, and high-speed rail, it also faces challenges including rising labor costs, growing pressure for green and low-carbon transitions, and intensifying international competition. 

He pointed to the U.S. experience in the 1960s and 1970s, when industries moved offshore, triggering "industrial hollowing out" that resulted in job losses, social tensions, and waves of anti-globalization sentiment. 

The U.S. Great Lakes region, once a hub for steel, coal, and auto manufacturing, became the Rust Belt, with cities like Detroit and Chicago experiencing steep population declines over the past 30 to 40 years.

China now faces similar challenges as traditional industries that are polluting, energy-intensive, and labor-intensive, declining with rising wages and social demands. Many factories are leaving, replaced by finance, real estate, and knowledge-based sectors, but this shift risks hollowing out local economies.

He cautioned that China, facing higher labor and production costs, must rely on technological innovation and supportive policies to avoid repeating the U.S. experience.

"You cannot win by walking the path of others. To stay competitive, you must build on your own strengths and reinforce your advantages," said Dr. Ma.

China should avoid blindly following buzzwords or trendy sectors like virtual reality or humanoid robots, and instead focus further on its strengths in electric vehicles, batteries, photovoltaics, and high-speed rail to build lasting global competitiveness.

Second, universities should move beyond chasing papers and rankings and instead strengthen ties with industry to ensure research is quickly turned into real technologies and practical applications. Building an integrated ecosystem of industry, academia, and research will help China use its academic resources more effectively, avoid duplicated R&D across firms, and boost the efficiency and capacity of the entire sector.

(Cover via VCG)