How much progress has China made towards achieving its 'Made in China 2025' goal?
'Made in China 2025' plan unveiled
China's State Council has unveiled a national plan, dubbed "Made in China 2025," focusing on promoting manufacturing, a notice said on Tuesday.
The plan was authorized by Premier Li Keqiang, according to the notice:
- "Made in China 2025" is the first 10-year action plan designed to transform China from a manufacturing giant into a world manufacturing power.
- The 10-year plan will be followed by another two plans in order to transform China into a leading manufacturing power by the year 2049, which will be the 100th anniversary of the founding of the People's Republic of China.
- Nine tasks have been identified as priorities: improving manufacturing innovation, integrating information technology and industry, strengthening the industrial base, fostering Chinese brands, enforcing green manufacturing, promoting breakthroughs in 10 key sectors, advancing restructuring of the manufacturing sector, promoting service-oriented manufacturing and manufacturing-related service industries, and internationalizing manufacturing.
- The 10 key sectors are new information technology, numerical control tools and robotics, aerospace equipment, ocean engineering equipment and high-tech ships, railway equipment, energy saving and new energy vehicles, power equipment, new materials, biological medicine and medical devices, and agricultural machinery.
- To fulfill the tasks, "Made in China 2025" will focus on five major projects, including establishing a manufacturing innovation center, said the notice.
- To shore up the plan, China will introduce a slew of policies to deepen institutional reforms and strengthen financial support.
The implementation of the "Made in China 2025" plan will be market-oriented, though guided by the government, according to the notice.
Made in China 2025: Leaping into the First Echelon
INTELLIGENT DESIGN: Workers test the mechanical arm of a robot in the plant of Shenyang-based Siasun Robot & Automation Co. Ltd. on October 14, 2014 (PAN YULONG)
China's manufacturing sector is in dire need of a makeover. With its economy entering the "new normal" phase, the country has to eliminate its outdated production capacity and upgrade the industrial sector. On the other hand, though dubbed a "world factory" for decades, the country is still faced with challenges from some industrial giants owing to its lack of core manufacturing technologies, low-end and low value-added industrial goods, as well as mounting production costs.
In early March, in his Government Work Report for 2015 Premier Li Keqiang disclosed China's intentions to implement the Made in China 2025 strategy, which calls for greener, more intelligent manufacturing, with a focus on quality and becoming increasingly integrated with the Internet. The move aims to lift China from its current position as a manufacturing powerhouse to a manufacturing industry world superpower.
The Made in China 2025 drive can empower the manufacturing sector and help the nation maintain economic growth at a medium-to-high level, said the State Council in a statement released after an executive meeting of the country's cabinet held on March 25.
MADE IN CHINA 2025”: CHINA'S ANSWER TO INDUSTRY 4.0
"Made in China 2025" is an initiative to comprehensively upgrade Chinese industry and it draws direct inspiration from Germany's "Industry 4.0" plan, which was first discussed in 2011 and later adopted in 2013. The heart of the "Industry 4.0" idea is intelligent manufacturing, i.e., applying the tools of information technology to production. In the German context, this primarily means using the Internet of Things to connect small and medium-sized companies more efficiently in global production and innovation networks so that they could not only more efficiently engage in mass production but just as easily and efficiently customize products.
As China enters into the midst of the 4th Industrial Revolution, Industry 4.0, Made in China 2025 and Internet Plus have become the key economic triggers of China’s long-term economic strategy. Economists believe that the combination of these initiatives will enable a new industrial revolution. With enormous potential to capitalize on the opportunities generated through transition towards a creative and high tech driven economy, China is evolving rapidy in pursuit of its goal.
China’s population of netizens will likely exceed over 700m, yet that is barely half of China’s total population. This illustrates clearly the mega potential of e-commerce, m-commerce and other Internet based services across a broad range of sectors to capitalize on Industry 4.0 and the development of an Internet of Things (IOT).
‘Made in China’ hi-tech plan risks pushing out foreign competitors, European businesses say
Beijing wants to improve industry’s technical prowess, but concerns raised that Chinese firms will be given advantage over competitors through support and greater market access
The European Union Chamber of Commerce in China has raised concerns about Beijing’s plans to develop the nation’s hi-tech prowess, arguing that Chinese firms will be given an unfair advantage through government support and their foreign competitors will be given limited or no access to mainland markets. The chamber’s report on the Made in China 2025 initiative was released on Tuesday and it analysed in detail 10 of the industries that Beijing hopes to boost.
The initiative was launched two years ago as part of China’s plans to become a technology superpower by 2025. The government sets out specific market share targets to be achieved by companies in key industries such as information technology and clean-energy vehicles.
Made in China 2025
"Made in China 2025" is an initiative to comprehensively upgrade Chinese industry. The initiative draws direct inspiration from Germany's "Industry 4.0" plan, which was first discussed in 2011 and later adopted in 2013. The heart of the "Industry 4.0" idea is intelligent manufacturing, i.e., applying the tools of information technology to production.
In the German context, this primarily means using the Internet of Things to connect small and medium-sized companies more efficiently in global production and innovation networks so that they could not only more efficiently engage in mass production but just as easily and efficiently customize products.
The Chinese effort is far broader, as the efficiency and quality of Chinese producers are highly uneven, and multiple challenges need to be overcome in a short amount of time if China is to avoid being squeezed by both newly emerging low-cost producers and more effectively cooperate and compete with advanced industrialized economies. The English translation of "中国制造2025" -- "Made in China 2025" -- does capture the goal of localization, but it misses the focus on the manufacturing qua manufacturing. The plan was drafted by the Ministry of Industry and Information Technology (MIIT) over two and a half years, with input from 150 experts from the China Academy of Engineering.
Joint efforts to implement Made in China 2025
“Made in China 2025” was first put forward by Premier Li Keqiang in his government work report in 2015, in which he urged accelerating the transformation of China from a manufacturing giant into a world manufacturing power.
The Premier has reiterated the plan on many occasions and promoted upgrades of China’s manufacturing industry. He said that China is still in the process of industrialization, which should include the manufacturing sector, but promote innovation and upgrades of the traditional manufacturing industry driven by the new economy.
The industrial innovation combined with Internet Plus, mass entrepreneurship and innovation, and “Made in China 2025” will foster a “new industrial revolution,” the Premier said.
‘Made in China 2025’ Initiative Gets New Boost
A car is assembled at the GM Shanghai Cadillac plant in Shanghai on Jan. 29, 2016. Photo: IC
(Beijing) – China is stepping up financial support for the manufacturing sector as it encourages companies to upgrade their technology and tries to channel more funding away from speculative activities into the real economy.
The People’s Bank of China (PBOC), the Ministry of Industry and Information Technology, and the three financial regulators who supervise banking, securities and insurance, pledged to give businesses better access to bank loans, initial public offerings, and bond issuance. They also called on insurance companies to mobilize their vast financial resources to invest in manufacturing companies, according to joint guidelines issued on Tuesday.
The co-ordinated efforts of the five government agencies to promote the Made in China 2025 strategy, an initiative launched in 2015 to upgrade Chinese industry, comes as authorities make a renewed push to boost investment in the real economy amid concerns that funds are being diverted into speculative activities that are leading to asset bubbles.
Navigating the ‘Made in China 2025’ Roadmap and China’s Market Share Goals
Chinese regulators unveiled in October more detailed plans for transforming the country into an advanced manufacturing powerhouse. Released by the Leading Group for Creating a Strong Manufacturing Country, identified by the US-China Business Council (USCBC) as a high-level interagency task force created by the State Council to implement the “Made in the China 2025” initiative, the announcement forms a “key technology roadmap” for the sectors in the plan.
This roadmap identifies key sectors, production localization targets, and specific products that China hopes to produce domestically by 2025, spanning a variety of industries ranging from information technology and materials, to new energy vehicles and advanced biomedical engineering. These targets include domestic and international market share goals that USCBC members flagged due to the lack of clarity on foreign company participation and competition concerns. Notably, the roadmap includes calls for “secure and controllable,” “secure and reliable,” and “indigenous and controllable” product development in several areas, including information and communications technology equipment, but also in aerospace, rail, and new energy vehicle sectors.
A helpful USCBC chart lists the specific sectors and their localization targets in 2020 and 2025 as identified by the roadmap. How this information will fit into various Made in China Action Plans sprouting at the local level—mirroring those at the provincial level in Jiangsu, Sichuan, Hubei, Gansu, and Liaoning, and those at the municipal level like Nanjing and Beijing—and whether foreign companies will have opportunities to leverage their technology, experience, and expertise remains to be seen.
The Made in China 2025 Initiative: Economic Implications for the United States
Introduced by China’s State Council (the highest Chinese executive organ of state power) in May 2015, the MIC 2025 initiative is the latest in a series of ambitious state-led programs introduced by the Chinese government that seek to modernize the Chinese economy, boost productivity, and make innovation a driver of economic growth.
One key Chinese motivation for MIC 2025 is to avoid hitting the socalled “middle-income trap,” a phenomenon that often occurs to low-income countries that initially experience rapid economic growth after implementing certain reforms. Many such countries are able to reach middle-income levels, but eventually the factors that produced that growth can no longer be sustained or the economic returns began to diminish. Without new sources of growth, much slower economic growth rates (or stagnation) can occur, preventing a country from transitioning to a high-income economy (hence the “trap”). While China is currently a high middle-income economy, it faces several economic challenges, including unbalanced economic growth, high corporate debt, severe pollution, and a declining working age population, which could sharply slow future growth.
Made in China 2025 – Everything You Need to Know
“Made in China 2025” is a strategic plan that was initiated in 2015 to reduce China’s dependence on foreign technology and promote Chinese technological manufacturers in the global marketplace. The goal is to reach this objective by the year 2025, a decade from the year when the plan first took root.
Developing innovation is a clear priority under the current Chinese administration and “Made in China 2025” is an integral part of achieving this priority. Below, we discuss the Made in China 2025 initiative and controversies that have surrounded it since its inception. The purpose of “Made in China 2025” is to change its perception as a low-end manufacturer to a high-end producer. The plan is only a small portion of a larger directive to develop innovation-driven technology and networks that the current administration is pushing as part of a comprehensive agenda.
By taking advantage of the opportunity to achieve new sources of growth, Chinese administrators hope to boost manufacturing capabilities to put them in line with other industrialized nations. By increasing the country’s technological capabilities, China will not be as dependent on other nations for advanced technology and can improve its trajectory in a manner commensurate with its overall objectives. The administration wants to take advantage of its large and powerful consumer base, as well as position itself as a value-added global source.
Made in China 2025
Made in China 2025 (MIC25, MIC 2025,[2] or MIC2025; Chinese: 中国制造2025; pinyin: Zhōngguózhìzào èrlíng'èrwǔ) is a national strategic plan and industrial policy of the Chinese Communist Party (CCP) to further develop the manufacturing sector of China, issued by CCP general secretary Xi Jinping and Chinese Premier Li Keqiang's cabinet in May 2015. As part of the thirteenth and fourteenth five-year plans, China aims to move away from being the "world's factory"—a producer of cheap low-tech goods facilitated by lower labour costs and supply chain advantages. The industrial policy aims to upgrade the manufacturing capabilities of Chinese industries, growing from labor-intensive workshops into a more technology-intensive powerhouse with more value added.
Made in China 2025's goals include increasing the Chinese-domestic content of core materials to 40 percent by 2020 and 70 percent by 2025. To help achieve independence from foreign suppliers, the initiative encourages increased production in high-tech products and services, with its semiconductor industry central to the industrial plan, partly because advances in chip technology may "lead to breakthroughs in other areas of technology, handing the advantage to whoever has the best chips – an advantage that currently is out of Beijing’s reach."
Since 2018, following a backlash from the United States, Europe, and elsewhere, the phrase "MIC 2025" has been de-emphasized in government and other official communications, while the program remains in place. The Chinese government continues to invest heavily in identified technologies. In 2018, the Chinese government committed to investing roughly US$300 billion into achieving the industrial plan. In the wake of the COVID-19 pandemic, at least an additional $1.4 trillion was also invested into MIC 2025 initiatives. Given China's current middle income country status, the practicality of its disproportionate expenditure on pioneering new technologies has been called into question.
‘Made in China’ Now ‘Made by China’
From ‘Made in China’ to innovated in China, from Chinese products to Chinese brands, the Made in China 2025 plan sets ambitious targets and timelines for China’s transformation from a big manufacturing country to a strong one. The State Council released the full text of the Made in China 2025 plan on May 19, laying out a 10-year blueprint to increase China’s manufacturing competitiveness and drive economic growth as the economy slows. Previous analysis from the US-China Business Council (USCBC) indicated concerns about how Made in China 2025 would impact the competitive landscape by favoring Chinese brands over foreign competitors. Although the full policy states numerous targets and timelines, the role of foreign companies in Made in China 2025 remains unclear.
Key objectives and goals for 2025 - In addition to reemphasizing the 10 priority sectors previously identified by Premier Li Keqiang, such as next-generation information technology, aerospace and aviation, agricultural machinery, new energy vehicles, and biomedicine and high-performance medical devices, the Made in China 2025 plan also calls for increasing China’s innovation capability, quality efficiency, integration of industrialization and information technology, and green development.
These targets include:
- Innovation Nearly doubling research and development (R&D) expenditures as percentages of overall business revenue to boost Chinese innovation, including an effort to increase the number of valid invention patents filed by companies.
- Quality efficiency Increasing the industrial value-added rate by four percent from the 2015 rate in an effort to enhance both quality efficiency of Chinese manufacturing, as well as the overall technological competitiveness of the Chinese economy.
- Smart manufacturing Increasing the broadband penetration rate—the percentage of Internet users who have access to high-speed or broadband Internet—from 50 percent in 2015 to 82 percent by 2025, with the goal of further harmonizing the information industry with the manufacturing sector.
- Green development Prioritizing green development by reducing energy consumption and carbon dioxide emissions. Made in China calls for industrial value-added energy consumption to be reduced by 34 percent; carbon dioxide emissions by 40 percent; and water consumption by 41 percent. The utilization rate of industrial solid waste is to be increased from 65 percent in 2015 to 79 percent by 2025.
