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A closer look at the “Made in China 2025” plan

On Behalf of | Jul 5, 2019 | Business Formation Planning

Made in China 2025 is a ten-year plan aimed at quickly updating China’s manufacturing base to more high-tech products. When it was introduced in 2015, it drew a lot of attention by global leaders – especially in the United States.

Some saw it as a veiled method of obtaining American intellectual property. In light of this criticism, the Chinese government began to downplay the importance of the plan. However, the country continues working towards a shift in manufacturing that will reduce its dependence on foreign technology.

A shift in manufacturing

One of the primary goals of China 2025 is to promote high-tech manufacturing. For decades, a large portion of China’s economy focused on mining, energy extraction, and manufacturing consumer goods like clothing and footwear. With Made in China 2025, the Chinese government aims to change that focus on expanding tech sectors, such as:

  • Energy-efficient cars
  • Next generation telecom equipment
  • Artificial intelligence
  • Robotics
  • Semiconductors

China 2025 provides direct subsidies to companies focused on next generation manufacturing, as well as encourages Chinese companies to invest in foreign firms making these products.

Reducing dependence on foreign tech

The manufacture of semiconductors is especially vital to the plan, as it is an area where China’s market demand far outstrips its supply. China’s economy accounts for 60% of global demand for semiconductors, but only 13% of the supply. Under the plan, China aims to be 70% self-sufficient in high-tech industries by 2025.

Other global economic powers have pursued similar plans in the past, such as Germany’s Industry 4.0 Plan. As trade talks continue between the United States and China, the program will likely evolve. The name might change, but China’s focus on revitalizing its manufacturing sector for new technologies seems to be here to stay.