Made in China 2025

What is the Made in China 2025 (MIC25)?
Made in China 2025 is a long-term strategy to modernize and upgrade the economy of the People’s Republic of China. The country wants to move away from the image of being just the workbench of the world and thus aims to become a technology leader. The plan sets targets for ten key industries, some of which extend into 2049 – the centenary of the People’s Republic of China. By then, the country would like to be the world’s leading economy.

MIC25 aims for the People’s Republic to be the world’s leading manufacturer of materials in telecommunications, railways and power supply as early as 2025. In the sectors of robotics, high-end automation and vehicles with alternative drives(electromobility), the country would like to be at least in second or third place.
Made in China 2025: Goals
The Made in China 2025 plan identifies nine strategic tasks. These tasks apply to each individual sector. With these goals, MIC25 aims to upgrade the economy of the People’s Republic:

– Increase the innovation capacity of domestic industry

– Deepen the integration of informatization and industrialization

– Strengthening the industrial base

– Improving product quality and building own brands

– Comprehensive implementation of environmentally friendly production

– Advancing development breakthroughs in ten key industries

– Advance deep restructuring in the industrial sector

– Actively develop service-oriented production and product-oriented services

– Increase the internationalization level of the industrial sector
Made in China 2025 Key Industries
China wants to focus on sustainable growth. Innovations should lead the industry to the top of the world. Education, science and digitalization therefore play a major role. With this as a basis, a total of ten key industries have been defined in the MIC25 strategy:

– Agricultural and forestry machinery

– marine technology

– Energy saving and electromobility

– Information and communication technology

– Machine tool systems and robot technology

– Electricity generation

– Aerospace technology

– New materials and materials

– Rail vehicles

– Biomedicine and medical devices
China’s global trade: One Belt, One Road
Made in China 2025 aims above all to make the People’s Republic the world market leader in selected sectors. To achieve this, trade and exports must also be strengthened. To this end, the government has bundled measures under the name One Belt, One Road measures to expand the intercontinental trade network. The aim is to modernize old trade routes. A project that is supposed to be reminiscent of the former Silk Road.

A distinction is made between the more northerly overland routes (Silk Road Economic Belt) and the more southerly sea routes (Maritime Silk Road). To this end, the People’s Republic is expanding ports in several countries, setting up transport hubs and building new transport routes to provide greater access to the respective hinterland. The One Belt, One Road project affects around 60 percent of the world’s population. About 40 percent of world trade runs along the Silk Road.
China’s Master Plan: Five initiatives for 2025
Despite all the boosts to exports, the master plan behind MIC25 is, of course, to increase value creation at home. The People’s Republic is to become an innovative high-tech producer. Five initiatives under Made in China 2025 are designed to advance this goal. The first initiative provides for a total of forty new research and development centers to be established by 2025. Companies are to cooperate here with universities and research academies.

The second initiative concerns the development of innovative high-end products. Independent research and development centers are to provide relevant patents for key industries. Initiative three aims to reduce CO2 emissions by twenty percent. The focus is on environmentally friendly production and the establishment of so-called green companies.

Smart manufacturing is the core topic of initiative number four. It aims to reduce operating costs, production time and failure rates in key industries by 50 percent by 2025. The fifth initiative aims to accelerate the development of materials and components. It aims to increase self-sufficiency in core materials and components to 70 percent by 2025.
What does Made in China 2025 mean for Germany
Many sectors in which Germany is one of the world market leaders are also to be promoted in the MIC25 strategy. The People’s Republic, should the plan work out, would no longer just score points for low costs, but would mature into a competitor on a technical par. Chinese companies such as Tencent and Huawei have long been among the world leaders.

Germany is pursuing a similar plan. It’s called Industry 4.0, and it served as a template for the MIC25 plan. China, however, is investing much larger sums. For the development of smart manufacturing, the government is investing the equivalent of three billion euros. The semiconductor industry is being given twenty billion.
Made in China 2025 as an opportunity for Germany
Despite these investments, Germany naturally still has a big head start in the technologies mentioned. Companies could therefore benefit from China’s rise. After all, companies in the People’s Republic need trading partners and suppliers. Germany could thus become a partner in the MIC25 strategy.

But there is also criticism of Made in China 2025: China is already the leader in the field of facial recognition and artificial intelligence (AI) in 2021. The country has used high-tech innovations in this field to build a huge surveillance state.
Questionable business practices
In addition, the Chinese government has not shied away from business practices that tend to be viewed critically in Western countries. For one thing, Chinese companies have brought an enormous amount of know-how into the country through takeovers and investments. This pursues an aggressive takeover strategy.

On the other hand, there is no level playing field in the People’s Republic for companies from Germany, the USA or Europe. Contracts are awarded without competitive bidding and foreign companies are kept out of the market. Thanks to lavish subsidies, many Chinese companies – especially in the solar and wind power sectors – can offer their products at dumping prices on the world market.
Problems with Made in China 2025
From the Chinese government’s point of view, however, such measures are necessary. The reason for the enormous subsidies for the semiconductor industry is that Chinese suppliers are still seven to ten years behind in this area. Not everything is going according to plan in robotics either. Chinese manufacturers were supposed to be able to meet fifty percent of their own demand in 2020 (seventy percent in 2025). However, it was only 39 percent.

Not everything is going according to plan in 2021 when it comes to electric cars either: in the world’s largest car market, there are strict electric quotas and many partnerships with European manufacturers. The ambitious manufacturer Byton nevertheless had to lay off hundreds of employees and only narrowly escaped bankruptcy thanks to new investors.

Find out more about the development of the Made in China 2025 plans in the news and analyses of the China.Table editorial team.