|中国经济要长期保持中高速，必须迈向中高端，须加速推进“中国制造2025”。||In order to maintain a long term medium-to-high speed (growth) of the Chinese economy, China must move to the mid-to-high end (technology, sector), and it is necessary to accelerate the promotion of "Made in China 2025".|
Li Keqiang at J-Tech CNC Technology Co., Ltd. (嘉泰数控机械有限公司) in Quanzhou 泉州, Fujian, on April 23, 2015.
In March 2015, China's Premier Li Keqiang 李克强 (b. 1955) first launched the "Made in China 2025" initiative (Zhongguo zhizao 中国制造２０２５) during the 3rd session of the 12th National People's Congress (Di ershi jie Quanguo Renmin Daibiao dahui 第十二届全国人民代表大会) in Beijing. The strategy aims to sustainably improve the quality of the Chinese industry by 2025 and establish an advanced industry standard by 2035 and 2049, respectively. Reasons are fairly easy to analyze: For the past few decades, China has been the world's workbench that owed its international competitiveness to low wage levels. However, this has changed and China's industry is already suffering from lower competitiveness due to a rise in wage levels of over 60% since 2002 (Kunze & Windels 2018: 10). "Made in China 2025" was introduced to overcome this weakness and gain competitiveness through high added value in production.
The strategy aims at strengthening China's international competitiveness in high-tech industries such as robotics, aviation and new energy sources. The plan is to reduce China's dependence on foreign technology imports through its own innovations and catapult domestic companies to the forefront of the international economy. Special focus is therefore on the development of new technologies such as Huawei's (Huawei Jishu Gongsi 华为技术公司) 5G technology, combined with machine learning and smart manufacturing. If successful, China would move up the value chain, moving from a low-cost producer to a direct competitor of countries such as South Korea, Japan and Germany. From Beijing's perspective, this step is overdue, as otherwise there is a risk of getting stuck in the middle income trap.
|传统的“MADE IN CHINA”我们还要做，但“中国制造2025”的核心，应该是主打“中国装备”。||We still have to create what is traditionally known as "Made in China", but the core of the (new) MADE IN CHINA 2025 should mainly be Chinese equipment/technology.|
Li Keqiang at the Ministry of Industry and Information Technology Conference (工业和信息化部座谈会) on June 15, 2015.
Essentially, two main goals for "Made in China 2025" can be identified. First, Beijing intends to transform the People's Republic of China into a manufacturing superpower (zhizao qiangguo 制造强国), achieved through the promotion of domestic innovation and competitiveness as well as localization of large parts of global production. Second, it seeks to defend its status as the world's factory over emerging countries such as Vietnam. Wage increases have not yet caused a major off-shoring, but the Chinese government sees the relocation of factories to Southeast Asian neighbors as a threat in the long term. Beijing therefore wants to keep the production of e.g. textiles through the help of smart manufacturing competitively cheap.
|中国制造2025的核心就是实现制造业智能升级。||The core of "Made in China 2025" is to achieve smart manufacturing.|
Li Keqiang at Dalian Heavy Industry Crane Group Co., Ltd. (大连重工起重集团有限公司)
Ten key sectors (miaozhun shi da zhongdian lingyu 瞄准十大重点领域) were identified by the government, which together already account for nearly 40% of total industrial value added production. These are the following:
|1. Integrated circuits and new generation information technology (xinyidai xinxi jishu chanye, zhuoli tisheng jicheng dianlu sheji shuiping 新一代信息技术产业, 着力提升集成电路设计水平)|
|2. High-end manufacturing control equipment and robotics (gaodang shukong jichuang he jiqiren 高档数控机床和机器人)|
|3. Aviation and aerospace equipment (hangkong hangtian zhuangbei 航空航天装备)|
|4. Advanced marine equipment and high-tech vessels (haiyang gongcheng zhuangbei ji gao jishu chuanbo 海洋工程装备及高技术船舶)|
|5. Advanced rail and equipment (xianjin guidao jiaotong zhuangbei 先进轨道交通装备)|
|6. Low and new energy vehicles (jieneng yu xin nengyuan qiche 节能与新能源汽车)|
|7. Agricultural machinery and technology (nongji zhuangbei 农机装备)|
|8. Power equipment and technology (dianli zhuangbei 电力装备)|
|9. New and advanced materials (xin cailiao 新材料)|
|10. Biopharmaceuticals and high-end medical equipment (shengwu yiyao ji gao xingneng yiliao qixie 生物医药及高性能医疗器械)|
Sources: China-Britain Business Council, & UK Trade & Investment 2016: 9ff.; Guowuyuan 2015.
It is already becoming apparent that a highly competitive group of manufacturers and technology providers, so-called national champions (guanjun qiye 冠军企业) will emerge from "Made in China 2025". In the long term, it will also be important for medium and small businesses to modernize as well. For this "Made in China 2025" is already providing good incentives, but overall Beijing is hoping for a spill-over effect by the created national champions.
"Made in China 2025" is supported by Beijing through various political campaigns, e.g. integration into the 5-year plans. The strategy builds on the industrial policy of recent years, but is much larger, more resource-rich and one of Beijing's most ambitious long-term projects ever. "Made in China 2025" plans far ahead and outlines China's development until the 100th anniversary of the founding of the People's Republic in 2049, whereby the eponymous year 2025 actually represents only an intermediate step (Wübbeke & al. 2016: 17).
Step One: to be achieved by 2025
|- Comprehensively upgrade China's manufacturing sectors|
|- Strengthen China’s position as a major manufacturing nation|
|- Focus on quality manufacturing, internetization and smart manufacturing technologies|
|- Improve the efficiency of energy, labour and material consumption|
|- Make Chinese companies leaders in the manufacturing value chain|
|- Master key technologies in key industries|
Step Two: to be achieved by 2035
|- Raise China to the level of a mid-ranking manufacturing nation|
|- Increase innovation|
|- Increase intellectual property ownership|
|- Achieve globally innovative breakthroughs in key sectors|
Step Three: to be achieved by 2049
|- Become a global leader in key high-end manufacturing sectors|
|- Drive innovation and hold competitive advantages|
The implementation of "Made in China 2025" is being led by the Ministry of Industry and Information Technology (MIIT, Gongye he xinxihua bu 工业和信息化部) which already launched five major nationwide initiatives with the following objectives (China-Britain Business Council, & UK Trade & Investment. 2016: 8):
|到2020年，重点形成15家左右制造业创新中心（工业技术研究基地），力争到2025年形成40家左右制造业创新中心（工业技术研究基地）。||To establish 15 new innovation centers by 2020 and 40 centers by 2025|
|To establish four new national research bases|
|紧密围绕重点制造领域关键环节，开展新一代信息技术与制造装备融合的集成创新和工程应用。||To implement projects focusing on smart manufacturing|
|组织实施传统制造业能效提升、清洁生产、节水治污、循环利用等专项技术改造。||To implement projects focusing on green manufacturing|
|组织实施大型飞机、航空发动机及燃气轮机、民用航天、智能绿色列车、节能与新能源汽车、海洋工程装备及高技术船舶、智能电网成套装备、高档数控机床、核电装备、高端诊疗设备等一批创新和产业化专项、重大工程。||To prioritize high-end equipment manufacturing in key sectors|
Source: Guowuyuan 2015
In addition, various policies and goals have been established for companies. Including an increase in R&D expenditures from 0.95% to 1.68% of company sales, an increase in labor productivity by 7.5% by 2020 and a reduction of energy and water consumption by 35% by 2025 (Wübbeke & al. 2016: 19). Beijing also implemented various standardization laws as well as testing and certificate systems that aim at improving the quality of products to meet international benchmarks across all industries, e.g. in the Traditional Chinese Medicine industry (Institute for Security & Development Policy 2018: 5). Furthermore, they have also begun to expand overseas investments of Chinese companies. The government views international partnerships and acquisition of foreign intellectual property as an important tool for improving the domestic economy. In the long term however, these are to be reduced. Made in China 2025 after all serves the purpose of relocating production chains to China herself.
To achieve these goals, the government is providing huge funds for "Made in China 2025". Examples are the Advanced Manufacturing Fund (Guojia xianjin zhizao chanye touzi jijin 国家先进制造产业投资基金) amounting to 2.7 billion Euro and the National Integrated Circuit Fund (Guojia jicheng dianlu chanye touzi jijin 国家集成电路产业投资基金) even containing 19 billion Euro. These funds are complemented by a variety of provincial funding instruments. China's state-owned banks, for example, have already begun issuing low-interest loans and bonds, especially to small and medium-sized private enterprises, where bank loans used to be a rarity.
The only bottom line seems to be lending to purely domestic companies and tying the use of money to Chinese intellectual property. The financial resources provided are enormous. In comparison: the German federal government only provides a total of 200 million Euro in total for their development plan Industry 4.0, which can be understood as a role model for "Made in China 2025", although on a much smaller scale.