Made in China 2025

In May 2015, Chinese Premier Li Keqiang and his cabinet issued a strategic industrial plan; its title translates to “Made in China 2025.” The plan took more than two and a half years to draft and included the input of 150 experts from the China Academy of Engineering. Made in China 2025 was described as an “initiative to comprehensively upgrade Chinese industry” by the Center for Strategic and International Studies (CSIS), an American think tank based in Washington, D.C.

What’s it all about?

A State Council document summarizes Made in China 2025, explains Scott Kennedy, director of the Project on Chinese Business and Political Economy at CSIS. “There are clear and specific measures for innovation, quality, intelligent manufacturing, and green production, and goals set for 2020 and 2025. Its guiding principles are to have manufacturing be innovation-driven, emphasize quality over quantity, achieve green development, optimize the structure of Chinese industry, and nurture human talent.... It promotes the development of not only advanced industries, but traditional industries and modern services.” 

I’ve got to say this sounds a lot different than the dialogue behind the U.S. tariffs currently contemplated for China. Why all the friction, the demands, the taking us to the brink of a trade war? Every time I heard “Made in China 2025” a song came to mind, especially its third verse: “Anything you can be, I can be greater. Sooner or later, I’m greater than you,” from “Anything You Can Do” by Irving Berlin in the 1946 Broadway musical Annie Get Your Gun.

In a report released March 22, 2018, a U.S. trade representative described Made in China 2025 as discriminatory toward U.S. firms and a threat to U.S. trade. As heard on NPR’s All Things Considered, “The Trump administration sees the policy as another effort to steal U.S. technology and push American firms out of the Chinese market.”

“You can’t just tell China that, ‘No, you’re not allowed to continue your technological development,’” says Douglas Fuller, an expert on China’s technology policies at Zhejiang University in Hangzhou. Fuller suggests that the United States would do better to come up with its own industrial policy and put more money into cutting-edge scientific research. “The U.S. really has to look at itself, and decide where its priorities are to stay competitive.”

High hopes

From “Factbox: Made in China 2025: Beijing’s big ambitions from robots to chips” (Reuters, April 20, 2018), here are the targets China has set in high-end technology.

1. Chips, computers, and cloud: China wants home-made chips used in smartphones to make up 40 percent of the local market by 2025. China wants domestic firms to have 60 percent of the market in industrial sensors.
2. Robotics: Chinese firms making industrial robots should make up half of the market by 2020 and 70 percent by 2025
3. Aerospace: Chinese airlines should hit 100 billion yuan ($15.90 billion) in revenue by 2020 and double that by 2025. In the space race, China wants 80 percent of civil space industry equipment to be domestically sourced by 2025.
4. High-end shipping: China should become a world leader in latest-generation ships and out-at-sea engineering equipment, with critical systems and equipment capturing 80 percent of the high-tech ships market by 2025.
5. Railways: By 2020, train makers should make 30 percent of their sales abroad, raising this to 40 percent by 2025.
6. New energy vehicles: Amid a major push toward fully electric and plug-in hybrid vehicles, China wants its own firms to take 80 percent of the fast-growing global market by 2025, with two local champions among the world’s leading new-energy vehicle companies.
7. Renewables: Chinese companies making renewable energy equipment and energy saving equipment should dominate the market with a more than 80 percent share by 2025, and three home-grown firms should have enough scale to compete globally.
8. Agricultural machinery: Already strong in agricultural tech, China is aiming to produce 90 percent of its own farming equipment by 2020, with high-end machines like tractors holding about one-third share of their global segments. This should rise to 95 percent and 60 percent, respectively by 2025.
9. High-tech materials: Advanced basic materials, such as for construction or textiles, and essential strategic materials including rare earth and special alloys, should hold a 90-percent and 85-percent share of the domestic market, respectively, by 2025.
10. Drugs and devices: China wants homegrown drug firms to be up to international standards by 2025, with 5 to 10 locally-developed drugs having won approval by then in the United States or Europe. In medical devices, Beijing wants its own companies to capture 70 percent of the market for middle and high-end medical equipment at county-level hospitals.

For more information, visit the Made in China 2025 web page here.

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