Made in China 2025
Made in China 2025 is a blueprint for transforming the country from being a low-end, labor-intensive economy that makes toys and clothes to becoming a high-end producer of goods that engineers advanced products like robots and electric cars. The plan funnels billions into 10 industries, everything from bio-pharmaceuticals to aerospace and telecom devices. It calls for 70% of related materials and parts to be made domestically within a decade. The goal is to tap into China’s increasingly wealthy home consumer base as well as the value-added global sourcing segment.
The program aims to increase the domestic content of core materials to 40% by 2020 and 70% by 2025. At present, domestic content is relatively low for high-tech goods, with foreign content comprising more than 50% in these products on average. In some categories, such high-level digital control systems and high-level hydraulic components, China is almost entirely dependent on foreign production. To lessen its reliance, China is focused on creating innovation centers, which will build a foundation for industrial development and generate a greater variety of high-end equipment. Innovation centers, which are to number 15 by 2020 and 40 by 2025, will assist the development of technology, smart manufacturing and creation of new materials. These centers make use of both public and private funds. Innovation centers are to focus on domestically-created, as opposed to foreign-created, technologies for security reasons, although it has been noted that this may restrict the technologies that can be applied.
One of the aims of "Made in China 2025": increase research and development spending to 1.68% of operating revenue by 2025, from less than 1% in 2015 and 1.26% in 2020.
Criticisms
The European Union Chamber of Commerce in China recently released a report, "China Manufacturing 2025: Putting Industrial Policy Ahead of Market Forces," criticizing the government subsidies that are provided to high tech industries in China, noting that these firms will be able to compete unfairly with foreign firms that have no government funding.
A paper put out by the Mercator Institute for China Studies in December 2016 underscores this idea. It noted that “while Chinese high-tech companies enjoy massive state backing, their foreign competitors in China face a whole set of barriers to market access and obstacles to their business activities: the closing of the market for information technology, the exclusion from local subsidy schemes, the low level of data security and the intensive collection of digital data by the Chinese state.”
Officials fear these techniques will make it impossible for U.S. companies to compete in the world's most critical fields. They also worry massive Chinese government subsidies will lead to a global glut of products that push down prices and hurt U.S. businesses. "There are things China listed and said, 'We're going to take technology, spend several hundred billion dollars, and dominate the world,'" U.S. Trade Representative Robert Lighthizer told senators at a March hearing. "And these are things that if China dominates the world, it's bad for America."
Opportunity
Technical and management consultancy services to improve productivity, quality and efficiency and to minimize risks through process design and optimization, and operation and project management;
Standards, testing, compliance and certification to support Chinese companies to comply with and influence international standards and achieve international certifications;
Joint R&D and joint bidding (in China and globally) as a channel for EU companies to build early-stage partnerships with new and growing Chinese enterprises;
Outbound investment to work with Chinese partners on third-country projects and EU-based R&D centers;
Financial and professional services, including accounting, auditing, consulting and HR, where Chinese projects have an overseas element;
Industrial and architectural design, virtual reality modelling, prototyping and testing to build better infrastructure and to increase output quality and efficiency;
Education services to build vocational skills and expertise in standards, management and software.
10 key sectors for development
Integrated circuits and professional equipment
High-end numerical-control machine tools and robotics
Aviation and aerospace equipment
Marine engineering equipment and high-tech ships
Advanced rail transit equipment
Low-energy and new-energy cars
Electronic equipment
Agricultural machinery
New materials
Bio-pharmaceuticals and high-performance medical equipment
5 key projects
Manufacturing innovation centers (industrial technology research bases)
By 2020, China will establish around 15 such centers to boost technological breakthroughs and innovation in key fields, chief among which are new-generation IT, smart manufacturing, additive manufacturing, materials manufacturing, new materials and bio-pharmaceuticals.
Smart manufacturing projects
Outstanding companies will be involved in setting up smart projects or digital factories to promote smart techniques in key industrial processes, to robotize key posts, to oversee the optimal use of smart techniques in the production process, and to optimize the supply chain.
Strong industrial bases
Research centers known as the “Four Bases” are being mapped out and established to overcome bottlenecks in developing core infrastructural components, techniques and materials, and production technology.
Green manufacturing projects
Green projects will be set up, as well as key model projects in the fields of energy efficiency and environmental protection, comprehensive use of resources, re-manufacturing and the industrial adoption of low-carbon technology. A thousand model green factories and a hundred model green industrial parks will be established by 2020.
High-end equipment manufacturing projects