What is the Made In China 2025 Plan

William Meller - What is the Made In China 2025 Plan
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.

Introduced in 2015, the grand plan seeks to transform China’s manufacturing base from being a low-end manufacturer to becoming a high-end, high-tech producer. 

Among these are information technology, telecommunication (5G), advanced robotics, artificial intelligence, and new energy vehicles. Other sectors include aerospace engineering, emerging biomedicine, and high-end rail infrastructure. 

Mirroring Germany’s Industry 4.0 development, these sectors are pivotal to the ‘4th industrial revolution’ which refers to the reconciliation of cloud computing, emerging technologies, and big data into manufacturing supply chains.

William Meller - What is the Made In China 2025 Plan
Image: Graphic Asia Briefing

This plan voices the imperative need for upgrading the Chinese economy by moving from assembly and lower-end production to higher value-added positions in the global supply chain, driven by innovation and ownership over core technologies. 

Increased scrutiny of high-tech acquisitions in Western countries bolsters the Chinese domestic argument of not relying on Western technology. To complement this effort, the State Council under Premier Li Keqiang has also proposed supplementary strategies such as “Internet Plus,” which “integrates the mobile Internet, cloud computing, big data, and the Internet of Things with modern manufacturing.”

In order to achieve the stated goals, a number of specific policies have been implemented, including:

 - High-tech companies are subject to reduced taxation rates.
 - Incentivization of mergers and acquisitions of foreign technology companies
 - Increased R&D funding by large manufacturing enterprises
 - Direct state funding of R&D
 - Roadmap stating specific targets for factors such as R&D and environmental protection

Even if key targets are not achieved, the initiative will improve China’s “overall economic governance’” and strengthen its financial, education, healthcare, and manufacturing sectors. The plan involves replacing China’s reliance on foreign technology imports with its own innovations and creating Chinese companies that can compete both domestically and globally. 

To better implement the plan, the Chinese Communist Party also implemented 5 strategic initiatives:

1. Building Research and Development Centers across China (40 to be built by 2025)
2. Development of High-End Projects across all the key industries
3. Sustainable production and worldwide leading green manufacturing practices
4. Smart Manufacturing, including robotics and digitalization
5. New materials production to be less dependent

William Meller - What is the Made In China 2025 Plan

China 2025 is intended to push the economy through this difficult transition and over the so-called middle-income trap, in which growth plateaus as wages start to rise, which has bedeviled many other developing countries.

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