The Made in China 2025 (MIC 2025) strategic plan, announced in 2015 by the Chinese government, is about to run its course. In September 2024, just months away from its deadline, this ambitious project aims to consolidate China as a manufacturing superpower, with an emphasis on high-tech sectors such as artificial intelligence, electric cars, and advanced telecommunications. As we approach 2025, it is important to understand the implications of this plan both for companies importing from China and for the global market in general.
What is ‘Made in China 2025’?
Made in China 2025 is a roadmap created to transform the country into a world leader in high-tech sectors. This plan is inspired by Germany’s ‘Industry 4.0’ model, which aims to digitise and automate industrial production. However, China is aiming far beyond simple modernisation. MIC 2025 aims to reduce dependence on foreign components and achieve 70% self-sufficiency in strategic sectors such as semiconductors, advanced machinery and electric vehicles.
Unlike previous strategies that focused on labour-intensive manufacturing, MIC 2025 aims to raise the quality of Chinese products. The plan focuses on ten key sectors, including advanced information technology, robotics, aerospace equipment, electric vehicles and biotechnology. Through subsidies, tax incentives and structural reforms, the Chinese government is mobilising both state-owned and private enterprises to meet these goals.
Achievements
With 86% of targets already met, China has made significant progress in areas such as renewable energy production, electric vehicles and communication technologies. For example, in the automotive sector, China has exceeded expectations, selling nearly 10 million electric vehicles by 2023, three times more than initially projected. These vehicles not only compete on price, but also lead in technology, thanks to advanced autonomous driving systems and connectivity.
On the manufacturing side, China has advanced in the production of key components such as servers, industrial operating systems and data processing units. These products have captured a considerable share of the market, challenging the supremacy of Western companies. However, significant challenges remain, especially in the development of technologies such as extreme ultraviolet (EUV) lithography, which is essential for the manufacture of advanced chips.
Challenges and criticisms
Despite its successes, MIC 2025 has generated global tensions. China’s self-sufficiency policies have been seen by other countries as a threat to international trade rules. Technology sectors in Europe and the United States, which depend on exports of high-tech components, have been particularly affected. Indeed, trade tensions between China and the US have intensified, with sanctions limiting China’s access to critical technologies such as semiconductors.
Moreover, some MIC 2025 targets have proved overly optimistic. For example, the plan called for vehicle batteries with an energy density of 400 Wh/kg, but current batteries only reach 200 Wh/kg. Also, while progress in autonomous driving has been impressive, China’s reliance on foreign chips, such as those from NVIDIA, is an obstacle that has not yet been fully overcome.
What does Made in China 2025 mean for importing companies?
For companies that rely on imports of Chinese products, Made in China 2025 presents both opportunities and challenges. On the one hand, Chinese technology products are becoming more competitive in terms of quality and cost. Sectors such as automotive, consumer electronics and renewable energy are leading innovation globally, offering lucrative opportunities for importers.
On the other hand, trade tensions and technological constraints could affect supply chains. Companies around the world have witnessed how US sanctions have limited China’s access to key components. This could slow down production in some areas and affect the availability of certain products in the market.
The future of Made in China 2025
With the 2025 deadline just around the corner, China is focused on meeting the remaining targets. However, there is already talk of a possible extension or evolution of this plan towards a new strategic horizon. MIC 2025 is only the first step in a long-term strategy to make China a technology leader by 2049, coinciding with the centenary of the People’s Republic.
For companies importing products from China, it is essential to be aware of these changes, as they will have a direct impact on competitiveness, pricing and product availability. The key will be to adapt quickly to an ever-changing global environment, where China is playing an increasingly central role in the high-tech economy.
In short, Made in China 2025 represents a radical transformation of Chinese industry that is already reshaping the rules of international trade. With its successes and challenges, the plan not only propels China into the future, but also redefines how global companies interact with the Asian giant.