Economy

Signature policy

China’s ballpoint pen hailed as breakthrough

Ballpen-w

Mightier than the sword

In 1958 a movie with the unpromising subject matter of pen manufacturing was released to Chinese audiences. The ideological inspiration for this propaganda flick was Shanghai Hero Pen, whose fountain pens were said to have “caught up” in quality with the international brand Parker after a mere nine months of research (see WiC336).

Last week writing implements were getting praise once more, although this time it was ballpoint pen technology that was generating the buzz as a symbol for advances in Chinese manufacturing.

After five years of research, state-owned Taiyuan Iron and Steel Co (TISCO) announced that it had finally mastered the alloy composition needed for the production of high-grade pens. Despite manufacturing close to 40 billion ballpoint pens a year, Chinese firms have lacked both the technology and the steel quality to produce all of the components themselves. According to China Daily, nearly 90% of the nibs used by Chinese factories are imported.

Caixin Weekly says the ball bearing is “easy to make” but the casing has been harder to produce at home, with the high-grade steel often imported from Germany or Japan.

The nib is made of ultra-hard, thin steel, which requires a precise combination of elements to be pliable but strong, and it can only be produced by high-precision machinery.

China’s slowness in satisfying these two requirements had brought great displeasure to Premier Li Keqiang. In June 2015 he derided domestic ballpoints on national television, belittling their performance as “rough”.

Later that month, state-broadcaster CCTV aired an hour-long show in which the bosses of three manufacturing firms joined Qiu Zhiming, CEO of Beifa Group, one of China’s largest pen producers, and promised to tackle the problem of shoddy performance.

Li didn’t let up. In December 2015 at a seminar that focused on the need to cut overcapacity and improve production, he complained once again that Chinese ballpoints weren’t up to scratch.

“That’s the real situation facing us,” he fumed. “We cannot make ballpoint pens with a smooth writing function.” What really bothered Li was that the key component had to be imported, meaning that China’s role in the manufacturing process was still lower-end.

Li’s fixation on this detail probably contributed to his promotion of a “craftsman spirit” campaign, a phrase which he first came up with when he penned his government work report in March last year.

The premier has encouraged manufacturers to adopt more of an artisan mindset, by specialising and innovating in their field. But TISCO’s work on the perfect nib began years before he became an advocate of better ballpoints. In 2011 China’s Ministry of Science and Technology initiated the ‘Research and Development and Industrialisation of Key Materials for the Pen Industry’ project, allocating $9 million in funding and appointing TISCO as its head developer.

Yet for Bloomberg columnist Adam Minter, TISCO’s success is less a triumph for Li’s persistence and more a symptom of China’s inclination to “[favour] inefficient but politically connected state-owned enterprises”. Minter says it made little sense for TISCO to take up the challenge (in 2015, it made more than 10 million tonnes of steel, but annual demand for stainless steel pen cases in China is about 1,000 tonnes) and he cites an admission from an official at the Chinese Pen Association that the project wasn’t very cost-efficient for TISCO to undertake.

Perhaps there will be long-term benefits for the steelmaker. Beifa Group has just ordered the first batch of Chinese nibs and it anticipates that they will replace foreign imports within two years. Five months after it perfected its production process, TISCO’s draft on an industry standard for ballpoints was approved. As things stand, that establishes a virtual monopoly for its locally-made offering.

Fans of Adam Smith might view that as a less-than-perfect market outcome, but patriots will be delighted that China has finally gone national with its nib technology. Next stop, Chinese-designed ultra-thin semiconductor chips, perhaps? Li Keqiang will be thumping the table in anticipation of that (see WiC270)…


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