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June 26, 2015 02:00 AM

Internet restrictions and Chinese manufacturing

Steve Toloken
Assistant Managing Editor
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    Do China's strict limits on the Internet get in the way of the country trying to move up the manufacturing chain?

    This report in a Hong Kong newspaper suggests it might.

    The South China Morning Post covered the first Maker Week in the southern Chinese city of Shenzhen last week. The three-day trade show for 3-D printing and other new manufacturing technologies drew 100,000 people, making it the largest such show of its kind in China.

    The paper noted Shenzhen's ambitious plans to become a hub for that work, but it also noted concerns among participants that limits on the Internet hinder the free-flow of ideas this next wave of manufacturing needs.

    “The limits on the Internet are really a big challenge for Chinese manufacturers,” Lyn Jeffery, co-director of the Shenzhen Open Innovation Lab, told the paper. (To see more about the products at the fair, check out this coverage in the China Daily.

    Foreign business groups have been making similar points about how tightening the Internet hurts businesses. Here's a strongly-worded statement from the European Union Chamber of Commerce in China, from February.

    Shenzhen and the surrounding areas have some huge advantages in manufacturing, as the South China Morning Post notes. From my years living in China, I agree.

    When I lived in that part of China, one of the draws companies would talk about was the tremendous local supply chain and expertise in manufacturing, and how hard it was to duplicate elsewhere in the world.

    But here's the dilemma I think China's got. It wants to be a more innovative economy; get more money for its manufacturing buck; avoid the middle income trap and keep its economy growing at a good clip; and make its workforce more productive to support a rapidly aging population.

    But can it innovate in the way it needs to with the tight Internet controls?  Does making it harder to access worldwide platforms like Google or Twitter or Facebook stand in the way of the kind of nimble manufacturing and information sharing that 3-D printing and similar technologies seems to suggest we're headed toward in the manufacturing world?

    On a personal note, this reminded me of a visit I made to a Chinese plastics equipment manufacturer. Over lunch, some of their marketing staff told me about how a very high-ranking member of China's government at the time came to their factory on a study tour of innovative companies.

    The company put something on their website about the visit, but when they wanted to broadcast it wider and put it on China's version of Twitter, Weibo, mentions of that leader's name were blocked because of sensitivity about some other issue.

    Its marketing staff was trying hard to get some more positive attention from the visit. It's a small example but these limits were counterproductive and frustrating for that company.

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