In recent years, Chinese producers have faced growth bottlenecks including overcapacity and rising costs. Under the double squeeze of emerging Southeast Asian competition and US and European “re-industrialization”, China’s manufacturing sector needs significant upgrading. Many companies have set their sights on the automation-based manufacturing model represented by Industry 4.0. Navigating myths about Industry 4.0, this paper clarifies the corresponding concepts, explaining the nature of Industry 4.0 and how it can be best applied to the Chinese context.