The turning point in the manufacturing industry has finally arrived. With the release of the "New Generation Artificial Intelligence Development Plan" by the State Council, China's national AI strategy has officially begun its journey. According to CCID Consulting, the AI market in China is expected to surpass 43.9 billion yuan by 2019, with a projected compound annual growth rate of 22.8% over the next three years. As emerging applications like smart homes, AR, and facial payment continue to mature, smart cities and intelligent manufacturing are deepening their impact, driving steady growth in the AI market.
Among these developments, the transformation of traditional manufacturing through smart technologies has drawn significant attention. At the Baidu Yunzhi Summit 2017, Shougang Group, a leading steel company, demonstrated how artificial intelligence can detect defects in steel plates. Within minutes, Baidu ABC’s integrated machine learning system analyzed 10,000 images, identifying 9,714 flawless plates, along with 280 red spots, 3 folds, and 2 holes—achieving an accuracy rate of over 99.9%.
In September 2017, Ruan Guoping, general manager of Beijing Shougang Automation Information Technology Co., Ltd., emphasized that automation in quality control and production equipment remains a major challenge for China’s steel industry. The company aims to leverage AI for better identification, classification, and retrieval of steel products, significantly improving efficiency.
This advancement in quality control is just the beginning of the broader shift toward intelligent manufacturing. According to Wang Ping, a global managing partner at McKinsey, smart manufacturing will transform the entire product lifecycle—from order to after-sales service.
In the steel industry, numerous smart technology applications are already making an impact. Li Wei, deputy general manager of Baosteel Engineering Technology Co., Ltd., explained that traditional methods struggle to monitor high-temperature ladles, affecting efficiency, cost, energy use, and safety. Through collaboration with Baidu Cloud, Baosteel implemented the Tiangong Intelligent IoT, which collects real-time data on temperature and pressure, supported by thermal imaging to create a "black box" of the ladle’s status. This information is then analyzed using Baidu Cloud’s computing power and AI, enabling predictive maintenance and optimization across multiple areas.
Beyond steel, smart technologies are also reshaping other industries. ZPMC, a leader in port machinery, launched Asia’s first fully automated container terminal at Qingdao Port in 2017. The terminal uses advanced automation solutions, including shore cranes, automated guided vehicles, and control systems, achieving 40 natural containers per hour—30% faster than traditional operations and with 85% fewer workers.
In the energy sector, companies like Concord New Energy and Vision Energy use Microsoft Azure Cloud to collect and analyze sensor data, supporting hardware monitoring and optimization. Bao Jiafeng, vice president at Microsoft Greater China, highlighted the importance of digital transformation in driving operational improvements.
Despite some progress, many Chinese manufacturers still face challenges in their digital transformation. A recent Accenture report found that only 4% of Chinese manufacturing firms are "digital leaders," while 58% perform poorly in both digital input and operational performance. According to Wang Taiyong from Tianjin University, digital manufacturing involves using digital tools throughout the product lifecycle to simulate and prototype designs.
Many companies lack clear strategies and responsibilities for digital transformation. Only 9% of respondents in a McKinsey survey believed their companies had a clear roadmap for smart manufacturing. Bao Jiafeng advised starting with specific business modules and gradually digitizing them, emphasizing that digital transformation is a process that requires time and adaptation.
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