There Was A Long Dark Night Before Dawn of China’s Industry

Part 1

I completed my undergraduate studies in Mechanical Engineering at Tsinghua University. Like most students in the mid-1990s, I had hardly ever left my hometown in the border province of Guangxi before entering university. Through the college entrance examination, I gained admission to a prestigious university, becoming one of the 120 freshmen in the department that year. We began comprehensive and rigorous academic training. For instance, 3D printing, which became a craze a few years ago, was something we were already exposed to in the 1990s. At that time, it was referred to as “additive manufacturing” or “laser rapid prototyping.”

However, the bleak employment prospects for engineering students at that time were out of proportion to the intense and rigorous training we received. “Trading markets for technology” was prevalent in China then, and there was little demand for developing a complex industrial sector and the technologies it needed.

To put it bluntly, that period might have been a long, dark night for China’s engineering talents.

Although we were informed early on by the department that the graduate-to-employer ratio in the job market was 1:14, meaning each graduate would have 14 employers waiting for them on average, the reality was less promising. The potential employers were either state-owned enterprises and research institutions struggling for survival or the offices of joint ventures and multinational companies in China.

The latter could usually offer salaries higher than the national average at the time, but their career prospects were often limited to factory management, quality control engineering, after-sales management, trade representation, or public relations management. They were more interested in our university’s reputation than the specialized knowledge we gained through four years of study.

The plight of this “long night” was dramatically reflected in the career paths of graduates. On the one hand, some graduates chose to study abroad and eventually secured positions as engineers or distinguished scientists in developed countries, realizing the value of their knowledge. On the other hand, in domestic industries, the knowledge we had worked hard to acquire seemed of little use.

In 2020, I conducted a simple survey and found that only 10% to 15% of my 120 classmates pursued careers in mechanical engineering. More of them chose to leave the engineering field and become managers of multinational companies, financiers, consultants, software developers, internet entrepreneurs, government officials, and more, each finding their value in their respective fields.

Part 2

Although I had secured admission to the newly established School of Public Management at Tsinghua University, it was an internship experience at a factory during the winter of my senior year that completely changed my aspirations.

I, along with four classmates, went to a foundry in the suburbs of Foshan, Guangdong Province, near a highway. The factory employed about 2,000 workers, mostly middle-aged women from Hunan, Jiangxi, Guangxi, and Guizhou. The factory primarily produced metal components for drainage systems, particularly T-pipes. The manager told us their products were renowned worldwide, with their T-pipes even being used in the sewers of Times Square, New York.

The production process was harsh. Most of the work, including iron smelting, casting, forging, turning, and painting, was done manually by the workers. These female workers were almost the best workers in the world; whether they were handling molten iron or operating machines to forge iron blocks, they never complained, even though their income for completing the entire process, from casting to painting, was only 0.2 yuan (or 3 cents) per piece for the whole team.

The living conditions provided by the factory were extremely poor. Lunch consisted only of coarse rice, pickles, and pigskin, which led one of our classmates to walk 40 minutes downhill each day to the only restaurant at the highway junction for meals. The rest of us occasionally joined him. Despite these harsh conditions, the female workers maintained a high level of enthusiasm for their work. To earn more, they would arrive at the factory by 6:30 AM, hoping the manager would open the workshop early so they could start work, even though the factory officially opened at 7:00 AM.

The internship was dull for us, as our knowledge was of no use to the factory or the workers. In fact, we consciously tried not to create any trouble for the workers. The only person who seemed excited was the manager, who was one of the few people in the factory wearing a suit. He was keen on chatting with us and imparting his wisdom on how to succeed in life and business after graduation.

What finally “broke” me was my decision to say goodbye to the workers at the end of the internship. When I finally spoke to them, I was surprised to find that most of the “middle-aged women” were between 16 and 22 years old, with few over 25. Yet their faces were already etched with the marks of hard labor, though they didn’t even think to complain.

Realizing these people were almost my age made me feel deeply frustrated. In another context, we might have been friends or classmates, but the stark contrast in our realities left me at a loss. The strong contrast between “a possible me” (the factory manager) and “2,000 possible me’s” (the migrant workers) had a profound impact on my values.

I finally began to face the fact that even becoming an engineer would not fundamentally change the lives of these “2,000 possible me’s” (or even more). So, I completely abandoned mechanical engineering, turned to studying public policy, and sought opportunities to participate in changing the status quo. Later, when I received an invitation from Professor Lu Feng in 2003 to research China’s industry and industrial policy, I immediately realized that this was what I wanted to do and should do.

Part 3

Participating in industrial sector research and policy is my way of engaging with China’s industrialization and a form of self-fulfillment. This experience has given me a deeper understanding of how the rise of indigenous innovative enterprises could bring about changes in China’s economy and society. Only by continuously upgrading domestic industries can more people be provided with decent jobs.

In fact, many multinational companies that entered China early on only established R&D institutions in China after 2005, which underscores this point. Before that, they mainly viewed China as a source of cheap manufacturing resources and a large consumer market. It was only after the rise of indigenous innovative enterprises like Huawei, ZTE, Chery, Geely, and BYD that they began to re-evaluate China’s engineering talent and leverage the “population dividend” of Chinese engineers. This shift was driven by the organizational models and competitive pressure from these innovative indigenous enterprises.

Of course, being a public policy researcher does not directly change the landscape of Chinese industry. My work mainly involves translating their struggles into policy analysis language. In this sense, the history discussed in this book was collectively shaped by countless entrepreneurs, engineers, and policymakers who embody the spirit of “fearlessness and resilience.”

This book is based on more than 500 personal interviews I conducted over 20 years, beginning in 2003. The interviewees were mainly engineers, business managers, workers, scholars, and government officials.

In fact, I hope to write a book about the personal stories of those involved in indigenous innovation in the future. Throughout my work, I have encountered countless inspiring, moving, or heart-wrenching stories:

We met with an old state-owned enterprise in Northeast China that, when facing enormous difficulties, convened a factory-wide meeting where all employees unanimously agreed to volunteer their time to help build a new factory;

The scientist who developed China’s first ten-thousand-line telephone switch would take a green-skinned, slow train to Shenzhen multiple times to procure electronic components from a second-hand market, even being mistaken for a “vagabond” on the train at one point;

In 1992, a telecom equipment company owner in Shenzhen stood on the roof of his company building, trying to convince himself not to jump off, and ultimately mustered the courage to return to the company to face the difficulties;

In 1997, an entrepreneur participated in the design of his company’s first vehicle model, but the only “design tool” he had at the time was a vernier caliper;

Also in 1997, a key early entrepreneur at Chery, inspired by the “dream of making cars,” decided to leave his wife, children, and stable job in Northern China and move south, but suddenly burst into tears after the train left the station;

In 1999, when an earthquake struck Taiwan, a retired engineer from a state-owned car manufacturer immediately threw himself onto the molds that he was supervising for Chery, using his body to protect the hope of “self-developing vehicle models” for the company;

In 2001, engineers from Datang Xinwei built a base station in Daqing Oilfield at -40℃. The mainstream market was already dominated by multinational companies, leaving them only the harshest environments to deploy their SCDMA network equipment;

In 2003, a group of Huawei engineers slept on the floor in the equipment room of SUNDAY Telecom Company in Hong Kong, waiting for the late-night hours to test the first batch of 3G equipment Huawei had sold;

And so on.

The countless practitioners who fearlessly pursued indigenous innovation in China are the true authors of this book.

Part 4

In policy debates, I am often labeled as a radical “statist” or as being overly optimistic about the prospects of China’s industrial innovation. This perception is inaccurate. As I mentioned earlier, my journey began in a state of personal confusion and uncertainty. Through my interactions with numerous practitioners in China’s industrial sector, and after understanding the struggles and growth of the companies they work for, I have come to realize that the rise of indigenous innovation is a long, difficult process, filled with hardships and failures.

It can be said that my optimism stems from my confidence in the national spirit and from what I have witnessed over the past 20 years of industrial research—the resilience of the Chinese industry and its people. Before reaching the desired outcome, they have endured great hardships and immense patience, surmounting the towering mountains of time.

Whether it takes 10 years or 25 years, we have every reason to remain optimistic about the prospects of China’s industry and its capacity for innovation over a longer time scale.

Just as in the midst of prolonged adversity, there has always been a voice that transcends a century, providing countless people with courage:

“Life does not fear death; in the face of death, they smile, dance, and march forward, surpassing extinction.”