Various levels of government will continue to encourage manufacturers to employ information technology (IT) to accelerate their industrialization process and enhance competitiveness, State and city officials said.

"IT is the inevitable choice either for traditional industries to upgrade their technology and products, or for high-tech ventures to horn in on the competitive edge," Shanghai Deputy Mayor Yan Junqi said.

"This is the only way to release and realize Shanghai's manufacturing potential, making it an international first-class manufacturing city," Yan said.

Shanghai is one of the 47 key cities selected by the State to integrate IT into its manufacturing sector.

In 2002, several ministries, including those of Science and Technology, Information Industry and Commerce jointly set up an office to promote IT applications into the manufacturing sector.

"In the past two years, important progress has taken place," said Li Wuqiang, a deputy sector chief of Ministry of Science and Technology, citing over 2000 manufacturers who have been named as "IT experimental demonstration enterprises."

A 2003 survey covering 488 enterprises showed that most top managers hold a positive view on IT applications.

Li also noted that imbalanced development in IT applications is a major problem. Eastern areas have developed faster than the middle and western parts of the country. Big companies are proceeding faster than small and medium-sized enterprises (SMEs).

China's entry into the World Trade Organization is pushing domestic manufacturers to face global competition. The government has also cleared a strategy to make IT drive the development of the manufacturing sector. Moreover, the cost of IT construction within companies is declining rapidly, given the speedy development of the IT industry.

"All these factors provide strategic opportunities for the IT revolution among manufacturers," he said.

In the next phase, the government will create a more supportive policy environment to promote IT applications, he added.

In Shanghai, based on a public platform for IT applications for manufacturers, the government will build a technology service system and an application and demonstration system, said Yu Guosheng, deputy director of the Shanghai Science and Technology Commission.

By 2005, all big enterprises and 80 percent of SMEs are expected to integrate IT into management and product development procedures.

To achieve that goal, related government bodies will enhance partnerships and formulate incentive policies, Yu added.

More importantly, Shanghai will complete a service chain to provide enterprises with top IT products, services, training and consulting, he said.

(China Daily February 24, 2004)