Made in China 2025
Made in China 2025 is a national strategic plan and industrial policy to further develop the manufacturing sector of the People's Republic of China, signed by Chinese Premier Li Keqiang 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 and Europe, 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.
In 2024, the majority of MIC 2025's goals were considered to be achieved, despite U.S. efforts to curb the program.
Background and stated goals
Since the 2010s, China has become an emerging superpower as the second largest economy and the largest one on a purchasing power parity basis. It faces manufacturing competition from countries with lower wages, like Vietnam, as well as from highly industrialized countries. In 2013, the Ministry of Industry and Information Technology convened a group of scholars and technical experts to prepare a report about how China could become a manufacturing superpower; this report later developed into Made in China 2025. To maintain economic growth, standards of living, and meet the demand of its increasingly educated workforce, China undertook stimulating the potential of its economic and technological competitiveness with MIC 2025, to become a "world-leading manufacturing power." Alan Wheatley of British think tank Chatham House indicated, in 2018, that a broad and growing Chinese middle class is necessary for the country's economic and political stability.China believes in its industrial policy programs, which it sees as key to its economic success. Its leaders hope that government investment in crucial technology sectors will lead to a strong position in the Fourth Industrial Revolution. The key objective of the Made in China 2025 program is, in a world which it views as increasingly dominated by U.S.-China competition, to identify key technologies, such as AI, 5G, aerospace, semiconductors, electric vehicles and biotech, indigenize those technologies with the help of national champions, secure market share domestically within China, and ultimately capture foreign markets globally.
The Center for Strategic and International Studies in Washington, D.C. described MIC 2025 as an "initiative to comprehensively upgrade Chinese industry", which is directly inspired by Germany's proposed Industry 4.0 strategy. It is a comprehensive undertaking to move China's manufacturing base higher up the value chain and become a major manufacturing power in direct competition with the United States.
Policies
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 spending share, productivity, digitization and environmental protection.
Strategic initiatives
The Chinese Communist Party also implemented 5 strategic initiatives:- Building research and development centers across China
- Development of high-end projects across all of the key industries
- Sustainable production and worldwide leading green manufacturing practices
- Smart manufacturing incl. robotics and digitalization
- New materials production to be less dependent
Key industries
MIC 2025 lists the following 10 key industries that the Chinese government targets for becoming a world leader.
| 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 talked 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.
Some companies that have been named as leaders of the key industries are:
Funding
The amount of state funding to support the MIC 2025 industries has not been publicized, but is estimated to be "in the order of hundreds of billions of dollars" of state funding, low interest loans, tax breaks and miscellaneous subsidies. This amount includes US$2.9 billion for the Advanced Manufacturing Fund and US$20.2 billion for the National Integrated Circuit Industry Investment Fund.China's investment in 5G is seen as part of the MIC 2025 program. As of early 2020, China had around 200,000 5G towers in use; by the end of the year, it aimed to have more than 500,000, with an ultimate goal of 5 million. In its 14th five-year plan, China's National People's Congress approved the spending of $1.4 trillion in 5 to 6 years to build 5G networks, "install cameras and sensors to create smart cities, and integrate this network with industry to accelerate progress in smart manufacturing."
Reactions
In 2021, Barry Naughton, a professor and China expert at the University of California, San Diego, questioned whether it is sensible for China, considering it is still a middle income country, to be taking "such a disproportionate part of the risky expenditure involved in pioneering new technologies". He commented that while it does not make sense from a purely economic perspective, Chinese policymakers have "other considerations" when implementing their industrial policy such as Made in China 2025.European Union
A European Commission published report calling for the European Union 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 policy. It recognizes MIC 2025 as being similar to the "German and Japanese approaches to innovation and economic development".The EU Chamber of Commerce in China said that MIC 2025 would increase Chinese protectionism favouring domestic companies. In a report they have written that the MIC 2025 initiative distorts the market, and that market-based innovation provides a better way to pass through middle-income status than industrial policies. Jörg Wuttke, president of the chamber, said: "Very often these major plans, with lots of money, where government bureaucrats decide who's the winner and who's the loser, end up in tears."