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 due to lower labour costs) and move to producing higher-value products and services.[3] It is in essence a blueprint to upgrade the manufacturing capabilities of Chinese industries into a more technology-intensive powerhouse.[4]

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.[5] 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.[6]

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[7] and become a major manufacturing power in direct competition with the United States.[8][9] The Chinese government is committed to investing roughly US$300 billion to achieve this plan.[3]

BackgroundEdit

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,[10] and environmental degradation.[11] China is now also competing in the manufacturing space from newly industrial countries like Vietnam and highly industrialized countries.[3][11] 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.[11] Alan Wheatley from British Think Tank Chatham House indicated a broad and growing middle class is necessary for economic and political stability.[12]

Key industriesEdit

The plan lists 10 key industries on which Chinese government focused to become a world leader.[13]

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.[14]

Some companies that have been named as leaders of the key industries are:[15][16]

ReactionsEdit

United StatesEdit

The United States think tank Council on Foreign Relations stated in 2018 that it is a "real existential threat to U.S. technological leadership".[17] The Li Keqiang Government maintains that the plan is in line with the country's World Trade Organization obligations.[18] 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.[19]

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.[3]

European UnionEdit

A European Commission published report called 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".[20]

The European Chamber of Commerce feared that MIC 2025 would increase Chinese protectionism favouring domestic companies.[21]

See alsoEdit

Literature and documentariesEdit

  • 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 [22]

ReferencesEdit

  1. ^ a b Made in China 2025. CSIS, June 1, 2015.
  2. ^ “Made in China 2025” plan unveiled to boost manufacturing. China News Service, May 2015.
  3. ^ a b c d Fang, Jason; Walsh, Michael (2018-04-29). "What is Made in China 2025 and why is the world concerned about it?". ABC News. Retrieved 2019-01-10.
  4. ^ "China to invest big in 'Made in China 2025' strategy". english.gov.cn. Retrieved 2019-01-10.
  5. ^ Foreign Firms Wary Of 'Made In China 2025,' But It May Be China's Best Chance At Innovation forbes.com Sara Hsu, March 10, 2017.
  6. ^ China Prepares for Big Pharma. Zachary Torrey, thediplomat.com, March 2018.
  7. ^ Made In China 2025: A New Era For Chinese Manufacturing CKGSB, September 2, 2015
  8. ^ "What is 'Made in China 2025' — and why is it a threat to Trump's trade goals?".
  9. ^ "YouTube". www.youtube.com. Retrieved 12 May 2019.
  10. ^ "The question mark hanging over China's middle class". South China Morning Post. 2018-10-12. Retrieved 2019-01-10.
  11. ^ a b c "Made in China 2025 and US–China power competition". www.lowyinstitute.org. Retrieved 2019-01-10.
  12. ^ "The question mark hanging over China's middle class". South China Morning Post. 2018-10-12. Retrieved 2019-01-10.
  13. ^ China, McKinsey (2015-05-27). "China Is Betting Big on These 10 Industries". McKinsey Greater China. Retrieved 2019-01-10.
  14. ^ "Quality revolution needed for 'Made in China'". english.gov.cn. Retrieved 2019-01-11.
  15. ^ http://www.eiu.com/industry/article/695926453/cultivating-made-in-china-champions/2017-10-02
  16. ^ "Evolving Made In China 2025" (PDF). MERICS.
  17. ^ Why Does Everyone Hate Made in China 2025? CFR, March 28, 2018
  18. ^ China says "Made in China 2025" in line with WTO rules Xinhua, 2018-04-04, Zhou Xin
  19. ^ U.S. and China Expand Trade War as Beijing Matches Trump’s Tariffs NY Times, 15 June 2018
  20. ^ "China: Challenges and Prospects from an Industrial and Innovation Powerhouse". Publications Office of the European Union. 15 May 2019.
  21. ^ "European Business In China Position Paper 2019/2020". European Union Chamber of Commerce in China. 24 September 2019.
  22. ^ China: A New World Order, retrieved 2019-09-26

External linksEdit