Made in China 2025

Made in China 2025 (Chinese: 中国制造2025; pinyin: Zhōngguó zhìzào èrlíng'èrwǔ)[1] is a strategic plan of the People's Republic of China issued by Premier Li Keqiang and his cabinet in May 2015.[2] With it, China aims to move away from being the "world's factory", producing cheap, low-quality goods facilitated by lower labour costs and supply chain advantages. The initiative encourages production of high value products and services, like aerospace and semiconductors, to help achieve independence from foreign suppliers.[3][4][5][6][7] It is in essence a blueprint to upgrade the manufacturing capabilities of Chinese industries into a more technology-intensive power.[8]

The goals of Made in China 2025 include increasing the Chinese-domestic content of core materials to 40 percent by 2020 and 70 percent by 2025.[9] The plan focuses on high-tech fields including the pharmaceutical industry, automotive industry, aerospace industry, semiconductors, IT and robotics etc, which are presently the purview of foreign companies.[10]

The Center for Strategic and International Studies describes it as an "initiative to comprehensively upgrade Chinese industry" directly inspired by the German Industry 4.0.[1] It is an attempt to move the country's manufacturing up the value chain[11] and become a major manufacturing power in direct competition with the United States.[12][13][14] The Chinese government is committed to investing roughly US$300 billion to achieve this plan.[7]

Background

China faces many internal issues such as a slowing economy, higher wages, increasing costs of an aging population, a shrinking workforce, wealth inequality, an underdeveloped social welfare system,[15] and environmental degradation.[16] China is now also competing in the manufacturing space from newly industrial countries like Vietnam and highly industrialized countries.[7][16] In order to maintain economic growth, standards of living, and meeting the demand of its increasingly educated workforce, it needs to stimulate the potential of its economic and technological competitiveness.[16] Alan Wheatley from British Think Tank Chatham House indicated a broad and growing middle class is necessary for economic and political stability.[17]

Key industries

The plan lists 10 key industries on which Chinese government focused to become a world leader.[18]

Key Industries of the Made in China 2025
Industry sector Description
Information Technology AI, IoT, smart appliances
Robotics AI, machine learning
Green energy and green vehicles energy efficiency, electric vehicles
Aerospace equipment
Ocean engineering and high tech ships
Railway equipment
Power equipment
New materials
Medicine and medical devices
Agriculture machinery

Premier Li has indicated advanced standards in industries are absolutely essential to foster innovation and eliminate bottlenecks in industrial development. China has a growing middle class who are demanding higher quality goods and services. Compared with overseas competition, the quality and innovation of Chinese goods have not caught up. Premier Li talks about the quality revolution. This revolves around entrepreneurship and craftsmanship. It will involve embracing a culture of continuous innovations and refinement in quality of goods produced.[19]

Some companies that have been named as leaders of the key industries are:[20][21]

Reactions

United States

The United States think tank Council on Foreign Relations stated in 2018 that it is a "real existential threat to U.S. technological leadership".[22] The Li Keqiang Government maintains that the plan is in line with the country's World Trade Organization obligations.[23] On 15 June 2018, the Trump administration imposed higher tariffs on Chinese goods, escalating the trade tensions between China and the U.S. The tariff list mainly focuses on products included in the Made In China 2025 plan, including IT and robotics-related products.[24]

It has also been suggested by the United States that some aspects of the policy may violate World Trade Organization rules, such as the self-sufficiency quotas for several high-tech components.[7]

European Union

A European Commission published report calling for the EU to increase its industrial and research performance and to "develop a trade policy that can ensure a level playing field for EU companies in China and for Chinese companies in the EU", in response to the Made in China 2025 (MIC 2025) policy. It recognizes MIC 2025 as being similar to the "German and Japanese approaches to innovation and economic development".[25]

The European Chamber of Commerce feared that MIC 2025 would increase Chinese protectionism favouring domestic companies.[26]

Japan

Japanese commentators note that MIC 2025 has led to growing exports of Japanese high-value goods such as semiconductor manufacturing equipment and production line robotization equipment and see it as a business opportunity, but fear that China may become a strong competitor in the long run.[27][28]

See also

Literature and documentaries
  • Boris Lee (2019). Assessing Made in China 2025: The US - China Trade War and Ways Going Forward. Claremont Colleges Library.
  • Edward Alden, Nicholas Burns, Ash Carter, Jack Clark (2019). Technology and National Security: Maintaining America's Edge. The Aspen Institute. ISBN 978-0578427959.CS1 maint: multiple names: authors list (link)
  • BBC (2019) China: A New World Order [29]
  • Shaun Rein (2012). The End of Cheap China: Economic and Cultural Trends That Will Disrupt the World. John Wiley & Sons.

References
  1. Made in China 2025 Archived 2018-12-29 at the Wayback Machine. CSIS, June 1, 2015.
  2. “Made in China 2025” plan unveiled to boost manufacturing Archived 2018-07-25 at the Wayback Machine. China News Service, May 2015.
  3. "Is China ready for a memory chip fab?". February 7, 2017.
  4. "China memory chip output zooms from zero to 5% of world total". Nikkei Asian Review. Archived from the original on 2020-03-29. Retrieved 2020-04-13.
  5. "Taiwan loses 3,000 chip engineers to 'Made in China 2025'". Nikkei Asian Review. Archived from the original on 2020-03-28. Retrieved 2020-04-13.
  6. "Archived copy". Archived from the original on 2019-10-06. Retrieved 2020-04-13.CS1 maint: archived copy as title (link)
  7. Fang, Jason; Walsh, Michael (2018-04-29). "What is Made in China 2025 and why is the world concerned about it?". ABC News. Archived from the original on 2019-01-10. Retrieved 2019-01-10.
  8. "China to invest big in 'Made in China 2025' strategy". english.gov.cn. Archived from the original on 2019-01-11. Retrieved 2019-01-10.
  9. Foreign Firms Wary Of 'Made In China 2025,' But It May Be China's Best Chance At Innovation Archived 2018-07-25 at the Wayback Machine forbes.com Sara Hsu, March 10, 2017.
  10. China Prepares for Big Pharma Archived 2018-07-25 at the Wayback Machine. Zachary Torrey, thediplomat.com, March 2018.
  11. Made In China 2025: A New Era For Chinese Manufacturing Archived 2018-09-10 at the Wayback Machine CKGSB, September 2, 2015
  12. "What is 'Made in China 2025' — and why is it a threat to Trump's trade goals?". Archived from the original on 2018-07-31. Retrieved 2018-08-11.
  13. "YouTube". www.youtube.com. Archived from the original on 22 October 2018. Retrieved 12 May 2019.
  14. U.S.-China competition for global influence. National Bureau of Asian Research. 2020. ISBN 978-1-939131-59-1. OCLC 1134423136.
  15. "The question mark hanging over China's middle class". South China Morning Post. 2018-10-12. Archived from the original on 2019-01-11. Retrieved 2019-01-10.
  16. "Made in China 2025 and US–China power competition". www.lowyinstitute.org. Archived from the original on 2019-01-10. Retrieved 2019-01-10.
  17. "The question mark hanging over China's middle class". South China Morning Post. 2018-10-12. Archived from the original on 2019-01-11. Retrieved 2019-01-10.
  18. China, McKinsey (2015-05-27). "China Is Betting Big on These 10 Industries". McKinsey Greater China. Archived from the original on 2018-09-15. Retrieved 2019-01-10.
  19. "Quality revolution needed for 'Made in China'". english.gov.cn. Archived from the original on 2019-01-11. Retrieved 2019-01-11.
  20. "Cultivating "Made in China" champions". www.eiu.com. Archived from the original on 2020-04-12. Retrieved 2020-01-06.
  21. "Evolving Made In China 2025" (PDF). MERICS. Archived (PDF) from the original on 2019-11-05. Retrieved 2020-01-06.
  22. Why Does Everyone Hate Made in China 2025? Archived 2018-12-29 at the Wayback Machine CFR, March 28, 2018
  23. China says "Made in China 2025" in line with WTO rules Archived 2018-07-25 at the Wayback Machine Xinhua, 2018-04-04, Zhou Xin
  24. U.S. and China Expand Trade War as Beijing Matches Trump’s Tariffs Archived 2018-06-18 at the Wayback Machine NY Times, 15 June 2018
  25. "China: Challenges and Prospects from an Industrial and Innovation Powerhouse". Publications Office of the European Union. 15 May 2019. Archived from the original on 28 March 2020. Retrieved 28 March 2020.
  26. "European Business In China Position Paper 2019/2020". European Union Chamber of Commerce in China. 24 September 2019. Archived from the original on 28 March 2020. Retrieved 28 March 2020.
  27. "【インサイト】中国製造2025、日本にとって脅威よりもチャンス". Bloomberg.com.
  28. ""中国製造2025"と日本企業". ニッセイ基礎研究所.
  29. China: A New World Order, archived from the original on 2019-09-26, retrieved 2019-09-26
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