Manufacturing around the world continues to be sluggish. According to global information provider IHS Markit, the initial value of the manufacturing PMI in the US and Eurozone was at 47.8 and 50.1 respectively, both of which were lower than projected.

China’s manufacturing was also under pressure. According to the National Bureau of Statistics of China, China’s manufacturing PMI in May was 49.4, which was also below expectations.

The road ahead for Sino-US trade relations remains unclear as China continues to maintain its “World Factory” status. Factors such as financing, policy support and changes in the industry are worth considering.

In the past, Chinese-made items were once seen as cheap and inferior, but those days are long behind us as Chinese enterprises made efforts by digitizing the manufacturing industry.

Li Junqi, the chairman of Foxconn, spoke at the 2019 China Innovation and Entrepreneurship Fair’s Industrial Internet Summit about the Industrial Internet, saying intelligent manufacturing is the direction the manufacturing industry should be looking at.

Looking back, it can be said that Foxconn’s transformation is the epitome of China’s manufacturing transformation.

According to Li, Foxconn’s “Fog Cerebellum” can link different factories, equipment and sensors. The AI in the “Fog” can make the whole production “flow” after data processing and analysis. The “Fog” platform integrates big data and professional experience on the internet, which can empower small and medium-sized enterprises.

While some may think China will lose its edge in manufacturing because of the Sino-US trade war, China’s manufacturing industry already attained a complete tech-based manufacturing module, which is still unattainable in cost-friendly Southeast Asian countries.

It is evident that manufacturing is important to any economy. Today, Western countries are facing the dilemma of incurring losses in manufacturing. In a Goldman Sachs report it was revealed that the United States will need at least five years to move mobile phone production from China back to the US, with the overall cost of phone production to increase by 37%.

As China faces the challenge of losing its cost advantage, China will have to upgrade and uphold the “Made in China” status via the industrial internet.

This article was first published on ATimesCN.com and translated by Kamaran Malik.