One problem is that production cost, including labor cost, in China is growing at a faster pace than the improvement of manufacturing capability and product quality, which results in diminishing competitiveness and shrinking profit margin for Chinese manufacturers in the global markets.

Xiao and many other Chinese manufacturers were certainly well aware that one of the alternative solutions lies in automating and upgrading the production process with efficient and sophisticated machines.

But they have been reluctant to do so because it is far too costly to replace workers with machines although they can dramatically improve efficiency and productivity.

"The imported machines often cost hundreds of millions of yuan and the depreciation rate of the equipment is very high," Xiao said. "On the other hand, domestic equipment often fails to meet our standards."

While we talk about transforming the image of "Made in China" products that often associate with the impression of cheap price and poor quality, we need to first think about whether our manufacturers are equipped with the advanced machines that are the prerequisite to produce superb goods.

A recent study by the International Federation of Robotics showed that China has only 30 industrial robots per 10,000 employees in manufacturing industries, while the robotic density of the US is five times larger, Germany 10 times larger and Japan 11 times more.

So, it is not surprising that Chinese leaders have called for substantial investment in robotic research and greater effort to upgrade the country's high-end equipment manufacturing sector that is considered the basis and the touchstone of any country's industrial power.

In Western economies, trade unions have been protesting against the rise of automation as it results in job losses. But we need to be aware that while they are eliminating some bad jobs, they are also expanding and empowering many good jobs.

China is already the world's largest manufacturing power, accounting for one-fifth of global output. But Chinese consumers would still rush to Japan or Europe to buy some of the most basic products in life such as milk powder, toothbrushes and toilet seats.

There is still a long path ahead of China toward becoming a genuine industrial power.