What a ball pen tells us about China’s manufacturing weakness

Premier Li Keqiang recently made a shocking revelation about the industrial capabilities of China on national television: despite the fact that the country is widely known as the “world's factory” and produces everything from iPhones, aircraft carriers, high-speed railways to spacecraft, until now there is not a single manufacturer in China that is able to produce the tiny rotating ball fitted to the tip of a ball pen that disperses ink as you write.

Each of these tiny metal balls has to be imported by Chinese pen manufacturers from overseas suppliers.

Many TV viewers in the mainland were deeply shocked and saddened by this revelation, as they had all been under the impression that China is already a world-class industrial power.

The harsh fact is that, even though China produces 38 billion ball pens every year, it is still unable to manufacture the key component, the rotating ball point.

How could a tiny component of an object so commonplace that goes for less than one US dollar prove to be an insuperable hurdle for the entire Chinese industrial complex?

Qiu Zhiming, chief executive of Beifa Group Co. Ltd., China’s leading stationery manufacturer, said the reason it is so difficult to produce that component is that the ball -- which is usually made of brass, steel or tungsten carbide and kept in place by a socket at the tip of the ball pen -- is so tiny (usually not more than 0.1 millimeter in diameter) that it requires state-of-the-art machinery and cutting-edge computerized measurement equipment with pinpoint precision to produce, not to mention the ability to produce the high-quality steel material of which it is made. The margin for inaccuracy in the production process of this tiny ball point is basically zero, or else it won't be able to be fitted into the socket perfectly and rotate freely in order to deliver ink.

Unfortunately, all these key technologies remain the weakest links in China’s manufacturing industry even to this day.

As a result, all the rotating metal balls fitted to made-in-China ball pens have to be imported from Germany, Switzerland or Japan.

The root cause of China’s backwardness in some of the key industrial technologies lies in the fact that state-run and private manufacturers are unwilling to invest in research and development because, in most cases, it won’t bring profits and extra market share, owing to the lack of protection for intellectual property and rampant plagiarism by other competitors.

Besides, the overall quality and professionalism of technicians in China’s manufacturing industry still lag far behind those in other major industrial countries.

Even if you have the best machinery, you still can’t roll out the best products if you don’t have the best people to operate it.

There is also the problem of China's inability to produce the best kind of steel materials.

Today the country still relies heavily on specially made and high-quality steel alloy imported from Germany, Japan, Russia and the United States to build its high-speed railways, bridges and even aircraft carriers and submarines.

The State Council launched a RMB$60 million program four years ago to facilitate the research and development of strategic industrial materials such as high-quality steel so as to reduce the country's reliance on foreign imports, because it is not only an industrial issue but also a national security concern.

However, four years have passed, and the program seems to have achieved nothing.

The reason Premier Li raised the issue even at the risk of "hurting Chinese people's feelings" is apparent: as China is undergoing a downturn in economic growth, his words serve as a timely reminder for manufacturers that they should have a sense of crisis, and unless they are able to achieve technological breakthroughs and step up investment in high value-added production rather than continuing to play safe and rely on labor-intensive manufacturing, it won't be long before the country completely loses its growth momentum.

The day China can produce a 100 percent homemade ball pen will be the day it truly qualifies as a first-class industrial power.

This article appeared in the Hong Kong Economic Journal on Jan. 21.

Translation by Alan Lee

[Chinese version 中文版]

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