In the industrial heartland of Liaoning, a quiet revolution is unfolding. The phrase “smart transformation and digital upgrading” captures a profound shift underway across China’s manufacturing sector, where networked equipment, semi-autonomous factories, and remote-controlled operations are replacing traditional reliance on manpower and intuition. This transition is redefining the rules of production, moving from sheer scale towards data-driven intelligence.
With its dense concentration of heavy industry, Liaoning provides a vivid case study in how this change is taking shape. Here, mass production is becoming more cost-effective, customised orders are being fulfilled with ease, and supply chains are operating in seamless coordination. These are the tangible results of embracing digital tools, offering a glimpse into a new paradigm for global manufacturing.
At the Angang Group Guobaoshan Mining Co., the once-bustling plant floor is now largely deserted. A network of sensors and robotic inspectors, making rounds every five minutes, monitors the flow of iron ore through crushers, mills, and concentrators. This is a “dark factory” of high intelligence. Zhang Wenhui, a chief engineer, explains that traditional ore dressing relied on the senses and hard-won experience of workers, a skill set that took nearly a decade to master. Since 2020, digital upgrades have enabled remote control and real-time adjustments, slashing the workforce from 80 to just a handful of specialists. Output has increased, product quality has improved, and labour productivity now stands 90% above the industry average.
This shift from manual oversight to digital control is a defining feature of Liaoning’s manufacturing revival. In Shenyang, Jinbei Lear Automotive Seats uses AI-powered vision systems on robotic arms to inspect seat quality, identifying defects with 99.9% accuracy and tripling inspection speed. At Hengli Heavy Industry’s “future factory” in Dalian, thousands of data terminals across the shipyard enable precise control over every element of production. This system recently allowed three ultra-large crude carriers and one very large ore carrier to be launched from the same dock in just 88 days—a new global record for concurrent super-ship construction.
The results are evident across the province. Digital design tool penetration has reached 86.7% and numerical control of key processes stands at 69.9%, both above national averages. A new three-year plan, launched in April, aims for full coverage of smart transformation in large industrial enterprises by 2028. A network of 13 selected service providers has already conducted diagnostic assessments for over 75% of these firms. For decades, China’s manufacturing model was built on producing vast quantities of standardised goods to drive down costs, but human intervention and experience-based decisions created bottlenecks in efficiency. Digitalisation is breaking through that ceiling. Nationally, leading smart factories report R&D cycles shortened by 38% and defect rates cut by nearly half, demonstrating the power of this systematic overhaul.
Beyond scale, flexibility is becoming a new strength. At Dayang Group’s custom garment factory in Dalian, an intelligent overhead conveyor system moves fabric to automated cutters guided by digital patterns. Each suit is made to a single customer’s unique measurements, tracked through a self-developed industrial internet platform that integrates 36 system modules. This is mass customisation in action. Similarly, General Technology Shenyang Machine Tool has built five unmanned flexible production lines and three “dark factories” using 5G technology. Data stays secure within the campus, while AI manages logistics, safety, and energy use. As consumer demand shifts from uniformity to personalisation, manufacturers must adapt their rigid systems to handle variety and small batches without sacrificing efficiency.
An important frontier is capturing tacit knowledge—the hard-won expertise of veteran workers. Shengu Group, for instance, has transformed decades of experiential knowledge into a proprietary AI model, slashing development time for first-of-a-kind products by 30%. Dalian Bingshan has codified 90 years of refrigeration know-how into a cloud platform that engineers can query to generate bespoke cooling solutions instantly, from ultra-low-temperature systems for petrochemicals to CO₂-based climate control for ice rinks.
The final piece of the puzzle is ecosystem collaboration. Competition is no longer just between companies but between supply chains. Leading firms are building platforms that connect suppliers, manufacturers, and distributors. Sailun (Shenyang) Tire has developed “Rubber Cloud,” the industry’s first such platform, integrating 150 system interfaces and linking 3,200 suppliers and 60,000 retail stores. AI and national identification codes ensure quality and traceability. This “chain-owner leading, platform-empowering” model turns a company’s internal capabilities into shared infrastructure for the entire value chain. Shengu similarly licenses lightweight software to over 40 SME partners, breaking down the “information silos” that once hindered progress.
China currently hosts 103 lighthouse factories, over 43% of the global total. These facilities, powered by AI and digital twins, are pioneering both efficiency and flexibility. By blending scale with customisation and competition with collaboration, Liaoning’s experience offers a compelling template for how the world’s factory can transform itself into a hub of intelligent, adaptive, and interconnected manufacturing.