China bets on AI for smarter, more resilient supply chains
At the recent China International Supply Chain Expo, companies showcased how artificial intelligence is helping manufacturers and logistics firms adapt to geopolitical uncertainty and changing global trade.
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BEIJING: For decades, China's manufacturing success was built on low-cost production. Now, companies are betting that their next competitive edge will come from smarter supply chains powered by artificial intelligence.
That shift took centre stage at the fourth China International Supply Chain Expo, held in Beijing last week.
The event introduced a dedicated AI zone for the first time, with companies showcasing technologies designed to improve everything from warehouse operations to quality control.
Exhibitors said the goal is not simply to automate more tasks, but to build supply chains that are faster, more flexible and better able to respond to disruptions.
MOVING AI INTO THE PHYSICAL WORLD
Chinese AI company iFlytek, best known for its speech recognition technology and large language models, showcased AI-powered robotics for logistics and manufacturing at the expo.
"For AI to become more deeply integrated into our work and daily lives, it needs to move beyond the screen and into the physical world," said Dong Bin, the firm’s deputy general manager for brand marketing.
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He said iFlytek’s embodied AI technology combines data collection, training and inference in a single system, helping address one of robotics' biggest challenges: the shortage of training data.
The technology is already being deployed in logistics and intelligent manufacturing, carrying out tasks such as warehouse picking and cargo sorting, he added.
Other sorting robots on display at the expo include those that can identify products by their colour, size and shape.
Some robotic arms can move at speeds of up to 1.5 metres per second, helping factories boost productivity while reducing the need for manual work.
CONNECTING THE ENTIRE SUPPLY CHAIN
As companies automate more of their operations, experts say AI is increasingly being applied across the supply chain.
"From research and development to manufacturing, distribution and downstream applications, everything is becoming connected," said Hao Jianbin, a research fellow at Shanghai University of Finance and Economics’ Digital Frontiers Research Institute.
"(AI) makes supply chains smarter. Instead of being fixed and rigid, supply chains can better anticipate change and become much more flexible."
The growing focus on flexibility reflects a broader push by businesses to build more resilient supply chains amid geopolitical and trade uncertainties.
For many firms, this involves not only adopting AI, but also rethinking where they manufacture and operate.
Sorting equipment manufacturer Anhui Jiexun Optoelectronic Technology, for instance, plans to more than double its overseas offices to 20 from the current nine, which include locations in Vietnam and Australia.
"Our strategy is localisation," said Xu Jianwei, CEO of the company's Spanish subsidiary. "By localising our operations, we're continuously reducing political risks."
The firm produces intelligent sorting systems for food products such as rice, tea, salt, nuts and grains. Using cameras and AI, the machines can identify defects such as discoloured or damaged nuts within a batch, helping improve quality control.
Beyond food processing, the company is adapting the technology for other industries, including sorting used batteries for recycling.
BEYOND LOW-COST MANUFACTURING
The expo also attracted manufacturers, entrepreneurs and investors looking for new commercial uses for AI.
One visitor said she hoped to partner with Chinese distributors and connect their products and services with small and medium-sized businesses.
Another said he was looking for investment opportunities and practical applications for such technology.
Analysts say the interest reflects a broader shift in how Chinese companies compete globally.
"In the past, China's competitive advantage came from low manufacturing costs. But in the future, cost will only be one part of the equation," said Hao from the Digital Frontiers Research Institute.
He added that the ability to build secure, resilient and stable supply chains would become increasingly important.
"Companies will also need to respond more quickly to changes. And they must move beyond manufacturing alone to building global brands overseas."
At the same time, many Chinese manufacturers are also contending with weaker domestic demand and tougher competition at home.
Dan Wang, China director at political risk consultancy Eurasia Group, said some manufacturers are increasingly looking overseas for growth.
"They do have this survivalist mentality to get out, but for their onshore business, they will normally keep it at a reasonable scale to keep the cost down. The overseas business is where they can actually make a profit," she noted.
Still, China's industrial ecosystem continues to attract foreign companies.
Jens Eskelund, president of the European Chamber of Commerce in China, said many European companies are deepening their presence in China to leverage its competitive supply chains.
"The only way that you can compete on price and quality ... is if you yourself become a part of that Chinese supply chain," he said.
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