American Journal of Industrial and Business Management, 2013, 3, 681-686
Published Online December 2013 (http://www.scirp.org/journal/ajibm)
http://dx.doi.org/10.4236/ajibm.2013.38077
Open Access AJIBM
681
The Experience and Enlightenment of American High-End
Equipment Manufacturing Industry to China*
Ying Chi, Jianming Zhang
School of Management, Shanghai University of Engineering Science, Shanghai, China.
Received October 26th, 2013; revised November 26th, 2013; accepted December 2nd, 2013
Copyright © 2013 Ying Chi, Jianming Zhang. This is an open access article distributed under the Creative Commons Attribution
License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
In accordance of the Creative Commons Attribution License all Copyrights © 2013 are reserved for SCIRP and the owner of the
intellectual property Ying Chi, Jianming Zhang. All Copyright © 2013 are guarded by law and by SCIRP as a guardian.
ABSTRACT
To get rid of the financial crisis happened in 2008, the United States, as the representative of developed countries, made
an achievement of the transformation from the “de-industrialization” to “re-industrialization”. The US government took
some effective measures through the combination of government, R & D and production, such as focusing on high-end
equipment manufacturing industry, increasing R & D investment, encouraging innovation actively, building competitive
markets, paying attention to the multinational indu strial reflux and vigoro usly supporting the SME, to develop high-en d
equipment manufacturing industry. Learning from the experience of the United States, China should take some effective
measures. Firstly, our country should increase the investment in scientific research, in particular by increasing funding
for basic research, and then by improving innovation capabilities. Secondly, our country should vigorously support the
SME and improve the employment situation. Finally, our country needs to further maintain and improve the socialist
market economic system.
Keywords: High-End Equipment Manufacturing Industry; Government; R & D; Product; Market
1. Introduction
High-end equipment manufacturing industry is the future
direction of global manufacturing. To get rid of the fi-
nancial crisis happened in 2008, the United States, as the
representative of developed countries, made an achieve-
ment of the transformation from the “de-industrialize-
tion” to “re-industrialization” and carried out a series of
policies including “AMP”(Advanced Manufacturing
Partnership) and “American Recovery and Reinvestment
Act”.
At present, China has become the largest equipment
manufacturing country in the world, but still “big not
strong.” It is the key breakthrough to achieve the trans-
formation from “Made in China” to “Created in China”
for developing the high-end equipment manufacturing.
But how can we realize it? The US experience in the de-
velopment of high-end equipment manufacturing in-
dustry must be a certain reference for our country. This
paper will focus on the US high-end equipment manu-
facturing industry, its developing experience and analy-
ses how China should develop high-end equipment
manufacturi ng i ndust ry .
2. Developing the High-End Equipment
Manufacturing Industry in the United
States and China
The United States is on e of the most developed countries
whose equipment manufacturing industry is well-devel-
oped. But since the 1970s, in order to solve the problem
of economic stagnation, the United States achieved eco-
nomic “de-industrialization” through international Indus-
trial transfer [1]. The US began to focus on the “FIRE”
industries, namely finance, insurance and real estate [2].
The implementation of “de-industrialization” solved the
employment problems of the American people to a cer-
tain extent. Because from 1980 to 2010, although the
numbers of manufacturing employees in the US drop-
*Fund: The research project of Shanghai soft science research base in
2013: Building competitiveness research framework of strategic
emerging industries—taking new energy automobile industry as an
example in Shanghai science and technology innovation and public
management re search center (13692180600).

The Experience and Enlightenment of American
High-End Equipment Manufacturing Industry to China
682
ped by nearly 9 million, the total number of employees
and employment rate were gradually rising. In 1982, the
US unemployment rate reached a peak of 9.708%. In
1997, the US unemployment rate fell to 4.942%, which
was the first time less than 5% since 1980. In the follow-
ing 10 years, this data has been maintained between 4%
to 6% stably. When the shortcomings of the virtual
economy exposed, the US unemployment rate suddenly
increased during the financial crisis. In 2008, the US
unemployment rate was 5.8%. And in 2009, it rose to
9.275%, rising by as much as 59.91% (As shown in
Figure 1).
The weakening of the real economy, represented by
manufacturing, is the main reason for high unemploy-
ment in America. In the past 15 years, the American
manufacturing output accounted for 20% of the world
(As shown in Figure 2). However, according to the
analysis of the growth proportion of manufacturing out-
put, the speed of development of American manufactur-
ing is similar with world average level (As shown in
Figure 3). What is more, the US manufacturing output as
a proportion of GDP is far b elow wor ld av erage lev el (A s
shown in Figure 4). It is obvious that the “de-Industri-
alization” should take responsibility for both financial
crisis and individual employment issues. Therefore, revi-
talizing the manufacturing is the top priority of the US
government. As a country with advantages of excellent
basic research and manufacturing technology, the United
States should focus on developing high-end areas of
manufacturing.
On November 2th, 2009, American President Barack
Obama issued a statement that the US economy would
turn to sustainable growth model. It was a signal that the
US economy would back to the real economy. Up to De-
cember, 2012, American manufacturing output has been
greatly improved and the unemployment rate has fallen
to 8.2% (As shown in Figure 1). According to the
achievement the US made after the release of “re-in-
Figure 1. The unemployment rate in the US [3].
Figure 2. The manufacturing output, China, the United States and the World [4].
Figure 3. The growth of the manufacturing output, China, the United States and the World [4].
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The Experience and Enlightenment of American
High-End Equipment Manufacturing Industry to China 683
Figure 4. The proportion of the manufacturing output in GDP, China, the United States and the World [4].
dustrialization” con cept, we have no reason to doubt that
“re-industrialization” in the United States is a long-term
strategy. However, it is noteworthy that the “re-industri-
alization” concept now is not the same as before. This
time, the aim of the release of “re-industrialization” con-
cept is to ensure their “engine” status of world economy
and to capture domestic competitive advantage in ad-
vanced manufacturing. America has the world’s most
advanced basic research laboratories, excellent technical
innovation and world-class schools and research institu-
tions, which are the basis of developing high-end equip-
ment manufacturing industry. What is more, the United
States has a lot of multinationals as strong support. And
there are 160 American companies in the Fortune 500
companies.
With the advantages of large population and cheap la-
bor, China has become the largest equipment manufac-
turing country in the wo rld. However, compared with the
United States, the most obvious characteristic of the
China’s manufacturing equipment manufacturing is “big
not strong”. So our country also should focus on devel-
oping high-end areas of manufacturing.
3. The Experience of American High-End
Equipment Manufacturing Industry
The United States has the strongest manufacturing com-
petitiveness in the world with the model of “R & D and
production-Export-Import” [5]. It keeps the first-class
level of scientific research and development in order to
make more competitive new products all the time. Wh en
the new products are sold in the domestic market, they
will soon be extended to the international market. Pro-
duction and sales in developing countries bring down the
cost, the United States can give up the production of such
products in favor of imports from abroad and turn to re-
search more high-end products. A new round circulation
is beginning, which is so called the international Indus-
trial transfer.
The market economic system in the United States is
sound relatively, but the lack of govern ment interv ention
will still lead to some prob lems. Therefore, in the process
of developing the high-end equipment manufacturing
industry, the United States doesn’t only rely on its mar-
ket, but also p ays attention to the ro le of the g overnment.
Basing on the market economic system, the United States
combines the government, basic research and production
to develop high-end equipment manufacturing industry
(As shown in Figure 5), the followings are some of the
specific measures.
First of all, paying attention to the high-end equipment
manufacturing industry. In 2009, in order to seize the
new round of the commanding heights of science and
technology and industrial competitiveness, the US gov-
ernment pu t for w ar d th e “r e - in du strialization ” con cep t, to
ensure their “engine” status of world economy and to
capture domestic competitive advantage in advanced
manufacturing. In the same year, the United States re-
leased “A Strategy for American Innovation: Driving
towards Sustainable Growth and Quality Jobs” [6]. The
report highlighted that the development of some key ar-
eas, such as advanced automotive manufacturing tech-
nology, also marks the return of the real economy. In
order to develop high-end equipment manufacturing in-
dustry, the United States has issued a series of policies,
including the “Advanced Manufacturing Partnership” [7]
and the “2009 American Recovery and Reinvestment
Act” [8]. The formation of new concepts is an important
symbol that indicates the US attach importance to manu-
facturing industry again, especially high-end equipment
manufacturing. And followed new policies are the im-
plementation of these concepts. Besides, a lot of capital
investment also indicates that the US government at-
taches great importance to high-end equipment manu-
facturing.
Secondly, increasing investment in R & D and actively
encouraging innovation. Depending on the development
model of traditional manufacturing of America, R & D is
the first element. R & D is the basis of technical innova-
tion and technological innovation is one of the purposes
of R & D. And they are often complementary and in-
separable. Over the past few years, the EU attaches great
importance to technological innovation, but the effect is
very general. It is mainly because of the lack of invest-
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The Experience and Enlightenment of American
High-End Equipment Manufacturing Industry to China
684
Figure 5. The experience of american hi gh-end equipment manufacturing industry.
ment in basic research. However, the US government do
not make such a mistake, they actively encourage inno-
vation on the basis of increasing investment in R & D
instead. In February, 2009, the 111th United States Con-
gress jointly developed a series of economic recovery
plan, which includes the “2009 American Recovery and
Reinvestment Act”. On February 17th, US President
Barack Obama signed it as the law. “2009 American
Recovery and Reinvestment Act” indicates that the total
cost of a series of economic recovery plan over the pe-
riod from 2009 to 2019 is about $787 billion, which in-
creased to $831 billion later. In addition, the US gov-
ernment intends to invest $7.6 billion directly into scien-
tific research, which includes $3 billion into the US Na-
tional Science Foundation, $2 billion to the US De-
partment of Energy and $1 billion to the US National
Aeronautics and Space Ad ministration. It is clear that the
US government attaches great importance to R & D. In
September, 2009, the United States released “A Strategy
for American Innovation: Driving Towards Sustainable
Growth and Quality Jobs”. And the report indicates that
the US is working on restoring the leading position in
basic research. Over the past 40 years, funds invested in
physics, mathematics and engineering by the federal
government in the percentage of GDP decreased by al-
most half, that is, from 0.25% down to 0.13%. To this
end, the US government plans to invest 3% of GDP for
research and development, and proposed to double the
budget of some key institutions, such as the National
Science Foundation, the Scientific Office of Department
of Energy and the like. These plans lay a solid foundation
for the development of new industries and creating jobs.
Thirdly, fostering the compet itive mark ets. America has
been adopted the market economy, but the blindness of
the market is also one of the reasons leading to the finan-
cial crisis. Therefore, some people believe that the gov-
ernment must play a leading role and protect some key
areas. However, this argument is not correct. Because
selecting winners entirely through the government-con-
trolled will lead to a waste of resources and the govern-
ment’s decision-making capacity is limited.” A Strategy
for American Innovation” emphasizes the importance of
a competitive market. And it also emphasizes that the
United States should support a competitive market,
which is not only open, but also able to allocate resources
to enterprises which have the innovative capability. The
United States recognizes not only the importance of pub-
lic support for developing high-end equipment manufac-
turing industry, but also the harm of excessive govern-
ment intervention.
Fourthly, the multinational industrial backflow and
vigorously supporting the SME. In 2011, the world-fa-
mous Boston Consulting Group released a report called
“Made in America again——why manufacturing Indus-
try will flow back to the US” The report presents two
trends of the future: the first one is that the high
value-added and high-tech equipment manufacturing
industry will return to the US native, the second is the
flow of labor-intensive manufacturing from China to
developing countries having lower cost. By the way, high
value-added and high-tech equipment manufacturing
industry is the high-end equipment manufacturing Indus-
try we discussed. It is clear that the United States is able
to develop high-end equipment manufacturing industry
only through the industrial backflow. A recent research
shows that 1/3 of manufacturing companies headquar-
tered in the United States intend to return production
from China to America. It is worth noting that most
companies’ annual sales are more than $1 billion. Al-
though a large-scale backflow has not yet formed, the
trend of backflow is very clear. In spite of the fact that
American the SME’ influence are far less than multina-
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The Experience and Enlightenment of American
High-End Equipment Manufacturing Industry to China 685
tional corporations’, American the SME still play their
own role as an important part of the industry chain and
have a large proportion (99.7% of total enterprises and
40% of total enterprise revenue). In March, 2009, the US
government used $730 million to address the lending
problem of small businesses. On December 11th, 2009,
the US government used the remaining funds of Trou-
bled Asset Relief Program to support small businesses.
Finally, paying attention to a combination of the gov-
ernment, basic R & D and production. In the general
background of market-oriented, the inevitable processes
of developing high-end equipment manufacturing include
forming new concepts, releasing policies supported by
government and funding, doing scientific research and
technological innovation, producing parts of the SME
and integrating multinationals. In short, the United States
has a perfect combination of the government, basic R&D
and production. “Advanced Manufacturing Partnership”
recently proposed by Obama is a program to invest and
promote the development of emerging technologies
which was jointly discussed by industry, universities and
the federal government.
4. The Enlightenment of American
High-End Equipment Manufacturing
Industry to Our Country
As a late-developing country, China has to face to a great
number of problems as weak economic foundation, poor
environment and few resources while developing the
high-end equ ipment manufactur ing industry. So it is hard
to copy the American model of “R & D and produc-
tion-Export-Import”. Under the background of market
economy system, the United States paid more attention to
the high-end equipment manufacturing industry, in-
creased R & D investment, encouraged innovation ac-
tively, increased the industry reflow and supported the
SME after the 2008 financial crisis. In order to well de-
velop the high-end equipment manufacturing industry, A
series of measures has been taken to achieve the combi-
nation of the government, R & D and production, which
is worth our reference.
Firstly, the government decides the direction of the
high-end equipment manufacturing industry development.
In the past 15 years, the manufacturing output of the
United States, as the representative of developed coun-
tries, went up steadily keeping pace with the world.
However, in 2008 and 2009, we could see significant
negative growth. Compared with developed countries,
China’s manufacturing output increased rapidly, and it
was not influenced greatly by the global financial crisis
in 2008. It has been proved that the concept of “paying
attention to manufacturing” make our country get away
from the financial crisis (As shown in Figures 2 and 3).
In the past 15 years, the world’s proportion of manufac-
turing output in GDP remained at 15% to 20%. However,
before 2008, under the guidance of the “de-industrialize-
tion”, the proportion of the United States was going
down slightly year by year. After 2008, with the new
idea of “re-industrialization” being recognized steadily,
the situation began to get well. In contrast, China’s pro-
portion of manufacturing output in GDP is much higher
than the average in the world(As shown in Figure 4).
Our government always pays high attention to the
equipment manufacturing industry. The State Council
promulgated the “twelfth 5 years plan in national strate-
gic emerging industry development” and the “twelfth 5
years plan in high-end equipment manufacturing industry
development” to accelerate the development of the high-
end equipment manufacturing industry.
Secondly, R & D is the basis for the development of
high-end equipment manufacturing industry. In the last
20 years, the R & D expenditures in China increased year
by year, so did its proportion in GDP. In 1993 , the R & D
expenditures in China was about 19.6 billion yuan ac-
counting for 0.62% of GDP; In 2011, it was up to 868.7
billion yuan accounting for 1.84% of GDP (As show in
Figure 6). The report of “Science and engineering indi-
cators 2012” implied that China’s inv estmen t in scientific
research had surpassed Japan, which was in the second
place after the United States. Nevertheless, It was still far
away from the United States’ target that the proportion of
R & D expenditures in GDP would be up to 3%, so it is
necessary for us to increase our investment in research.
In addition, the proportion of China’s basic research
funding in the total R & D expenditure was only 4.74%
in 2011, while the data of the United States was up to
20%. Besides, the innovation capability of the manufac-
turing industry is weak in China, there is a variety of fake
goods. Therefore, if China wants to develop high-end
equipment manufacturing industry, the first task is to
further increase investment in scientific research, espe-
cially for the basic research. Under this background, we
can increase our innovation capability and reduce fake
goods.
Thirdly, the production is another important part. As is
mentioned, in order to solve their own economic devel-
opment issues, there will be two measures be taken in the
United States. One is that the high value-added, high-
tech equipment manufacturing industry will return to the
mainland, and the second is that the labor-intensive
manufacturing will flow from China to lower cost de-
veloping countries. Both 2 measures will strike our
manufacturing industry. It means that China’s existing
high-end equipment manufacturing industry will not be
able to get the support of foreign advanced technology.
oupled with our weak scientific and technological in- C
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The Experience and Enlightenment of American
High-End Equipment Manufacturing Industry to China
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Figure 6. The proportion of China’s R & D expenditures in GDP [9].
5. Conclusion
novation, future developments in the field of high-end
equipment manufacturing industry are not optimistic. The
flow of labor-intensive manufacturing from China to
lower cost countries will weaken our advantage that
China has a large population . Therefore, the Government
should support the SME in some key areas to help them
achieve industrialization.
Compared with the development of the high-end equip-
ment manufacturing industry in the United States, there
are still many deficiencies in our country. We have some
suggestions to solve them: firstly, increasing investment
in scientific research, especially for the basic research;
secondly, being wary of the industry reflux crisis caused
by the developed countries and supporting the SME in
some key areas to help them achieve industrialization.
The most important thing is that China needs to further
improve the socialist market economy system and pay
more attention to the market itself, in order to develop the
high-end equipment manufacturing industry better.
Finally, the market is the core of the development of
high-end equipment manufacturing industry. The United
States caused the world financial crisis, and the govern-
ment has already taken a series of measures which in-
clude “heavily bailout”. Although some people think that
it is a great irony of the market economy, this argument is
obviously not correct. Because introduction of govern-
ment policy and capital investment does not affect the
nature of the market economic, and the US market still
has a high degree of freedom and competition. Because
the United States has a relatively complete market eco-
nomic system, it is more important for the government to
play a role in promoting. Compared with America, our
government has played a significant role, so paying at-
tention to market-oriented trend is more important for
developing high-end equipment manufacturing industry.
The report of the 18th CPC National Congress pointed
out that the core problem of economic reform is to deal
with the relationship between the government and the
market. Besides, it is necessary to respect the laws of the
market and make the government play a better role. To
make the market to play a fundamental role in the eco-
nomic system, strictly controlling excessive government
intervention to market economy is urgent. China should
unswervingly promote reform and adhere to market-ori-
ented economic system. Functions of the government
should proceed to create a fair competitive market rules
and institutions and to provide infrastructure and basic
research and development funds for the market. Only
through this method can a market-based economy which
has government involvement in macro economy be es-
tablished. And this economic system is able to create
good environment for developing high-end equipment
manufacturi ng i ndust ry .
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