Emerging Industries (Bi-Monthly Newsletter, Issue 10)

Date: Feb 2016
BeiDou Navigation Satellite System in urgent need of top-level planning
BeiDou (Compass) Navigation Satellite System is a global navigation satellite system independently developed by China and composed of three sections: space, ground and user. China’s navigation satellite industry has grown rapidly thanks to strong governmental support and initiatives to promote broader civil applications. The BeiDou system is expected to offer basic navigation positioning services to countries along the route of the “One Belt, One Road” initiative by 2018.
Despite rapid growth in China’s satellite navigation industry, there still remains room for improvement in the following areas:
Better coordination in regulating its civil applications. For greater efficiency, the central government should designate a governmental body for centralized management of the civil applications of the BeiDou system.
Access to core technologies (in which China owns all intellectual property rights).
A higher market share for BeiDou (Compass) navigation satellite system. At present, BeiDou system only accounts for just 5% market share in civil applications in China as its reliability has yet to be tested.
In this regard, industry experts suggest that in the future China will step up its efforts to:
Promote the full satellite navigation industrial chain, starting with technological breakthroughs in high-precision and high-performance system chips, universal navigation chips, navigation terminals, time service terminals and 3S software.
Promote extensive application of high-precision positioning technology in key industries and areas important for people’s livelihood.
Make the BeiDou system compatible with the space-based and ground-based augmentation services of other navigation systems, and provide ubiquitous positioning services.
Strive for synergies with big data, smart cities, cloud computation, the internet of things and mobile internet industries, and promote the BeiDou brand across the globe.
Level of technological advancement in China’s nuclear power industry
China entered into a definitive agreement with the U.K. government with respect to the Hinkley Point nuclear power project at the end of October 2015 when Chinese President Xi Jinping visited the U.K. Under the agreement, the Chinese consortium composed of CGNPC (China Guangdong Nuclear Power Holding Co., Ltd.) and CNNC (China National Nuclear Corporation) will invest £6b for a 33.5% interest in the project, bringing Hinkley Point under Chinese ownership. According to Chinese media reports, this is the first time Chinese companies have taken a lead role in the construction of a nuclear power project in a developed western country, a significant milestone as China begins to export its independently-developed nuclear technology.
Industry experts, however, contend that Chinese media has missed the point: China only lent financial support to the Hinkley Point project, and did not export its technology. Although China has made strong progress in its nuclear power industry in the past 30 years, and has now become one of the most important nuclear power equipment manufacturers in the world, there remains a large gap between China and the world’s other strong nuclear powers such as France, the U.S. and Russia. Thus far, China has relied mainly on the introduction of technological know-how and equipment from abroad to expand its nuclear power industry. Apart from a better-coordinated regime in China, one of the main reasons China has witnessed rapid growth in its nuclear industry in recent years is due to the fact that other nuclear countries such as France and Germany have curbed or given up nuclear power.
C919 ready for maiden flight: China adopts equally strict safety and manufacturing standards as its European and American counterparts
The ability to develop and manufacture large passenger aircrafts has long been viewed as an important measure of a country’s aviation technological advancement and an important indicator of a country’s national strength. The C919, China's first domestic large passenger aircraft, rolled off the assembly line on 2 November 2015 and is set to make its maiden flight in 2016. This marks a breakthrough for China in core technologies and independently developed medium-range trunk liners. In the words of Ji Dapeng, an Officer from the Policies and Regulations Department of the Civil Aviation Administration of China, only with core technologies can China beat its international rivals, Boeing and Airbus, in the medium-range aircraft sector, and accomplish its goal of growing into a strong manufacturer by 2025.
China is not afraid of competition in the field of civil aviation and has the confidence to carve out a slice in the market as friendly competition promotes growth, Ji added. To bolster its competitiveness in the civil aviation industry, China has adopted safety and manufacturing standards equally strict as those U.S. and Europe in manufacturing civil purpose aircrafts. In addition, China has stepped up its efforts to gain access to core technologies, particularly the technical know-how to manufacture high-performance engines.
New energy auto sector set to outpace traditional auto sector
China’s new energy auto sector witnessed a surge in 2015 due to the continuation of preferential policies, improvements in product manufacturing, and an accelerated market-oriented reshuffling. In the first half of 2015, China overtook the U.S. as the world’s largest new energy auto market. From January to October 2015, China manufactured a total of 206,900 new energy autos, a 3-fold increase over the same period in 2014. Competition has grown fiercer as non-auto companies, mainly internet companies, gained a foothold in the industry.
According to industry experts, unlike the traditional auto sector where China is inferior to its Western rivals in terms of internal combustion engine technology, the new energy auto industry provides a great chance for China to outpace other developed economies as this industry is a new concept worldwide. However, as Chinese technology remains inferior with regards to batteries, motors, and electric control device manufacturing and system integration technologies, and the country’s charging infrastructure is insufficient. Moving forward, China has a long way to go before it can catch up with and outpace developed countries in the new energy auto sector.
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