How Will China Become Manufacturing Power―Focus on Made-in-China 2025 Plan

时间:2022-07-06 07:08:57

Currently, China still lags behind other global manufacturing giants like Germany and the US. As a study released by the Chinese Academy of Engineering has pointed out, the nation’s manufacturing sector is facing enormous challenges amid new evolv- ing technologies and industrial reforms across the world. Developed economies have their own edge, and emerging economies have to catch up. In fact, China’s manufacturing industry has three major issues: (1) lack of innovation; (2) weakness in core technologies; (3) and excessive energy consumption and severe pollution.

“China is being pressured from both sides,” an MIIT official who preferred to remain anonymous said earlier in May,“Advanced economies such as the United States, Germany and Japan have all formulated policies supporting further development of their own manufacturing. At the same time, emerging economies such as those of India and Brazil are also catching up with their own advantages.”

Chinese manufacturing accounts for about 20 percent of the world’s total, but it is “far from strong”. Chinese factories still struggle with decreasing demand, increasing competition from international competitors and a decreasing rate of eco-nomic growth.

In order to accelerate the transformation of China from a big manufacturing power to a strong manufacturing power, Premier Li Keqiang has advanced the “Made-in-China 2025”concept in his Government Work Report to the top legislature this year.

Early in March, Chinese Prime Minister Li Keqiang chaired an executive meeting of the State Council in order to accelerate the implementation of the “Made-in-China 2025 Plan”, which would help to upgrade the manufacturing industry. The council reviewed and approved the Outline, which is now hailed as“Chinese Industrie 4.0”.

The manufacturing industry is a main part of the national economy as well as a main battlefield of technological innovation. For a while, the “Made-in-China 2025 Plan” and “Chinese Industrie 4.0” had become prominent words in China.

According to the three-step action plan, China will rank among the world’s top manufacturing powers in the next decade. By 2045, the nation will become the leading manufacturing power, consolidating its might before the nation celebrates the 100th anniversary of the founding of the People’s Republic in 2049.

What is “Made- in-China 2025”?

“Made-in-China 2025” will be followed by two other plans in order to transform China into a leading manufacturing power by the year 2049. It is the guideline for the first decade and will lay a solid foundation for the next two stages.

Official say that the plan will span the whole manufacturing industry, applying advanced ideas not only from Germany and Japan, but also from the United States and Britain, among others.

This plan will focus on innovation drive, intellectual property and green development. The authorities will also provide preferential policies to promote the restructuring of the traditional manufacturing industry, and support enterprises’ mergers and reorganization as well as market competition. Industrialization and informatization will be deeply integrated to make breakthroughs in some key fields.

Nine tasks have been identified as priorities: (1) improving the national innovation capability of the manufacturing industry; (2) advancing the deep integration of informatization and industrialization; (3) strengthening industrial foundations; (4) ensuring quality and building up brands; (5) promoting green manufacturing; (6) making breakthroughs in key sectors; (7)advancing the restructuring of the manufacturing industry;(8) developing service-oriented manufacturing and producer services; (9) and propelling the internationalization of China’s manufacturing industry.

The strategy also introduced ten fields to be significantly developed and five key projects. The five key projects include the new-generation information and communications technology, high-tech numerically controlled machine tools and robot-ics, and biomedical industry.

Innovation is the Key

According to Industry and Information Technology (MIIT) Vice-Minister Su Bo, “Made-in-China 2025” will focus on the upgrading of the manufacturing sector to improve innovation ability, and integrate informatization and industrialization, through green manufacturing and manufacturing internationalization.

To shore up the plan, China will introduce a slew of policies to deepen institutional reforms and strengthen financial support.

According to the notice, the implementation of the “Madein-China 2025” plan will be market-oriented and guided by the government.

Li Beiguang, the deputy head of MIIT planning division, said, “There are many criteria to judge whether a country is a manufacturing power or not, including industrial scale, optimized industrial structure, sound quality and efficiency and sustainable development. The key, however, lies in innovation.”

Li also stated, “To promote manufacturing and national competitiveness, it is important to mobilize every conceivable element in order to stimulate innovation rather than simply support a single industry.”

Amid China’s “new normal” of economic development, featuring slower but higher quality growth, the government is attempting to steer the economy toward a more sustainable growth mode driven by domestic consumption, the service sector and, most importantly, innovation.

A focus on innovation has resulted in some domestic companies, such as telecommunications giant Huawei, climbing up the value chain. The Shenzhen-based company has spent more than 190 billion Yuan on R&D over the past decade. Of its 150,000 employees, more than 45 percent are in innovation and research and development positions.

In 2014, spending on R&D in China accounted for 2.1 percent of GDP, a record high. The proportion in some regions such as Shanghai was as high as 3.6 percent.

Thanks to these efforts, improvements can be seen. For example, industrial value has been added to the high-tech sector and equipment manufacturing, which increased by 11.4 percent and 7.7 percent respectively in the first quarter, has out-paced overall industrial growth.

Industrial output grew 6.4 percent in the January-March period, down from an 8.7-percent growth a year ago.

The Meaning of “Made-in-China 2025”

Minister of Industry and Information Technology Miao Wei said that the “Made-in-China 2025” strategy is of great significance to the development of China’s manufacturing industry. In 2010 China became the biggest manufacturing power in the world. However, China has yet to become a strong manufacturing power because the nation lacks enterprises and products that are internationally competitve. It is expected that the “Made-in-China 2025” plan will lift the country into the second tier of the global manufacturing industry by 2025.

The 18th CPC National Congress called for further integration of informatization and industrialization, as a way to boost manufacturing. That is precisely what “Made-in-China 2025” focuses on and aspires to achieve.

China’s manufacturing sector is facing headwinds, including structural adjustments, competition and a fading low-cost edge. Experts say that the use of Internet Technology will become a powerful engine in driving changes.

According to an insider, by 2025, the plan aims to shorten the lead time of products by 20 percent of the current average.

Under the “Made-in-China 2025” strategy, China will become the world’s largest manufacturer by 2025. That means the nation will have ten years to catch up with leading manufacturing powers like Germany and Japan.

“Made-in-China 2025” will set its sights on domestic and global economic development and industry evolvement trends. It will not only help upgrade traditional manufacturing sectors, but also focus on new technology and high-end innovations.

Commenting on the event, Miao Wei, the minister of Industry and Information Technology (MITT), said that the realization of the plan means that “by 2025 ... China will achieve industrialization that is nearly equal to the manufacturing abilities of Germany and Japan at their early stages of industrialization.”

Germany’s Industrie 4.0 vs China’s Industrie 4.0

Although comparisons have been made between the roadmap and Germany’s Industrie 4.0, Liu Baicheng, from the Chinese Academy of Engineering, has clearly stated that “Made-inChina 2025” is different.

According to media reports, Industrie 4.0 - the result of collaboration between the German government, research institutions and businesses - focuses on the development of fullyautomated “smart” factories. These factories would make products on the shop floor fully customizable.

“Made-in-China 2025,” on the other hand, will span the whole manufacturing industry, applying advanced ideas not only from Germany but also from the US and Britain, among others.

The initiative will not only push forward the transformation and upgrading of the manufacturing industry, but also push development.

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