BIStel, a South Korean-headquartered provider of smart manufacturing solutions, said it will expand investments in China to catch business opportunities from the country’s plans for industrial modernisation and upgrading.
“One of China’s goals is to upgrade its manufacturing ability under [the national strategy of ] Made in China 2025 … We have to invest in manpower and technology to obtain the business opportunities,” said Sunny Lee, general manager of BIStel China in Shenzhen on Friday. “Without these kinds of approaches, it will be difficult to do business in China.”
The amount of investment BIStel intends to make was not disclosed, although Lee indicated some of the areas for intended investment. “From now on, we will expand our business into other industries in China such as chemicals, auto-mobility and rechargeable batteries,” said Lee.
BIStel’s current business in China mainly focuses on providing smart manufacturing solutions to an array of industries, including semiconductors. It specialises in optimising production processes by enabling real-time monitoring, detection, and analysis of data in plants, to enable engineers and operators to predict outcomes and adapt in real-time to changing conditions.
BIStel’s decision to increase investment in China comes at the time when some China-based manufacturers are moving to lower-cost Southeast Asia countries amid rising labour costs and a squeeze from US tariffs linked to the US-China trade war. BIStel is basically a software provider though without any factories, compared with a manufacturing giant such as Foxconn, which has thousands of manual labourers on staff.
“We treat China as our biggest target market … We are making the investment based on the demand we see,” said Jason Kim, a director of BIStel. “We have an office and operations in Singapore, but we do not have similar plans to increase investment in Southeast Asia.”
Nevertheless, BIStel acknowledged it has felt the impact of the trade war, which is partly a result of Washington’s objections to the Made in China industrial modernisation plan, which it sees as an example of unfair state intervention in the economy. Like the European Union, the US has complained to the WTO about Chinese policies on technology transfer and intellectual property rights, but also imposed tariffs on Chinese imports in an effort to force change.
Beijing has said such transfers are voluntary, not forced, and that many foreign companies have benefited from the work on new technologies by research and development centres in China.
“We have felt the negative impact from [the US-China tensions] as some of our customers have delayed their investments and operations … They want to see what will happen and that is the challenge,” said Lee. “China-US tensions are there but eventually they will go away, I think.”
Some of the main sectors hit by the current trade war and related tensions include machinery and electronics as well as information and communications technology, according to a recent analysis of the tariffs by insurance company Credendo.
BIStel said one the biggest challenges in China is protecting its intellectual property and talent in a country where a lot of new technology companies are emerging and competing to hire the best people.
“Many [of China’s ] young people are pursuing big companies or the internet companies, so recruiting young people is not easy,” said Lee.
On the issue of data privacy, Lee said at the moment it was not under any additional scrutiny from Beijing as it deals with production data and not financial data. “But the government will be very protective when it realises the value of manufacturing-related data,” said Lee.