I just recently visited Shanghai, China. I was invited to speak at a die casting conference that was being held in conjunction with the 7th Biennial Die Casting Exhibition. Besides my presentation, I got a chance to walk the exhibit floor and to visit several die casting operations. I had some very informative discussions with many of the industry executives in China.

I was last in Shanghai in 2004, and the city has changed significantly since my last visit. The buildings and the architecture were as modern as any major city in the U.S. The chaos in the streets of people-powered carts was gone. Traffic flow was heavy, but very neatly organized. All the small first floor shops were clean and had windows. There was a large percentage of foreign-made cars amongst the Chinese-manufactured products. I actually saw more Porsche Cayene’s in Shanghai than I have seen in the Chicago area.

One of the more subtle changes that I noticed was the number of satellite dishes on various apartments. I estimate that one in every 50 apartments had dishes. This, to me, is one signal of the growing middle class. Not only can they afford the dishes, but are in need of more than the government-controlled information fed through the standard airwaves. When I discussed this with my interpreter, she said that there is a concern in the government about the ability to control the signals to these dishes, but they really don’t know how to handle it. As I discussed how the access to the Western world would influence the Chinese middle class, one of the other people I was traveling with mentioned the strike at the Honda plant by the workers. He said that the government was having a hard time controlling this issue. The workers were striking for higher wages.

In 2004, this type of protest would not have been tolerated in China. Over my four day trip, nearly every business owner I spoke with complained about energy costs/supply, rising labor costs and lack of proper job training for their workers. I thought I was back in the U.S.! They also expressed concern over the rising currency value and how they would potentially lose profits and even business.

Interestingly, the business owners during this trip talked about the development of their products for their domestic market. In prior trips, they always discussed their percentage of export. This trip was completely the opposite. They bragged about their percentage of domestic production. They also understood that they needed to improve in tooling design, complex casting production and metal handling. They did say that magnesium was still a huge focus for the automotive industry because the projections of new cars was so high and they needed lighter weight alternatives to make an impact on the CO2 emission levels. Their government is focusing on keeping emissions low. It reminded me of our government’s push in the late ‘70s.

This was a very informative trip that made me believe that with a growing middle class in China and the demands it will make on their manufacturers, things may be swinging the other way and we may see an increase in our export production of complex die castings and tooling. We need to stay ahead of the curve in technology, productivity and innovation in order to take advantage of this.