China‘s ambitious “Made in China 2025” initiative, introduced in 2015, aims to transform the nation into a global manufacturing powerhouse. This multi-decade strategy outlines a vision for the first ten years, targeting advancements in ten key sectors, including aerospace, robotics, and high-end manufacturing. The proposal has been met with widespread global condemnation. Many experts worry that its domestic preference provisions unjustly discriminate against foreign competitors, undermining global trade dynamics.
At this point, China deserves credit for concrete progress in certain areas and a failing grade in others. The country has crushed all their goals for the automotive sector, reminding everyone what it means to run away with production at home. It has largely failed to produce its intended results in aerospace and high-end robotics. Second, it has already underperformed its aspirational growth rate goal for manufacturing value-added products.
Manufacturing value-added growth dropped to 6.1% in 2024, well below the 7% growth rate that was realized in 2015. Still, this growth rate — 6% — is a little more than halfway to the goal of 11%. Additionally, China has a long history of making great leaps in industrial automation. Yet specialists emphasize that a lot of this development is contingent on foreign technology, rather than domestic innovation.
In the dynamic field of aerospace, this dependence is again manifested in China’s self-developed aircraft, the C919. The C919 is a splashy, significant achievement for the country’s fast-developing aviation sector. For all its innovation, it’s supremely reliant on parts produced by U.S. and European manufacturers. This overreliance further complicates and calls into question China’s goal of achieving high-tech self-sufficiency.
China’s pushing, though, and domestic technology development is the current favorite vehicle for a response. This impetus has been exacerbated by the increasing limitations from the United States. These measures iterate on the stated goal of limiting China’s access to advanced, cutting-edge technologies. Simultaneously, they push American manufacturing companies to establish plants in the United States. In light of these challenges, China has doubled down on its efforts to move up the manufacturing value chain. The country is increasingly moving its industrial base from producing low-end goods, such as Christmas ornaments, to producing high-end equipment.
Even as these ambitions have raised hopes across the global south, they have raised security alarms about risks posed by China’s manufacturing plans. Analysts cautioned that China’s top-down, heavy-handed pursuit of technological superiority may trigger involution. This particular economic phenomenon can happen any time internal rot prevents growth from developing.
Jens Eskelund, president of the European Union Chamber of Commerce in China, praised China’s progress but conveyed a pessimistic overall assessment. He conceded that although China failed to fulfil any of its targeted levels of manufacturing growth, it nonetheless achieved magnificent results considering the circumstances.
“They didn’t fulfill their own target, but I actually think they did astoundingly well.” – Jens Eskelund
Eskelund was quick to add that the price tag for China’s recent development has brought heavy costs and challenges.
“We also need to realize [China’s] success has not come without problems.” – Jens Eskelund
The long-simmering geopolitical tensions between China and the West have left the landscape poised on a knife’s edge. According to analysts at the Center for Strategic and International Studies in Washington, D.C., freshly announced U.S. chip export controls have made it harder for China to realize its goals of semiconductor self-sufficiency. These measures have created burdens on U.S. and allied companies.
“Western chip export controls have had some success in that they briefly set back China’s developmental efforts in semiconductors.” – Analysts at the Center for Strategic and International Studies
The competition is really starting to heat up! As it does, concerns grow over China’s technology goals and the downstream effects for international markets. Eskelund said global stakeholders should count themselves lucky that China didn’t hit its manufacturing goals.
“Everyone should consider themselves lucky that China missed its manufacturing growth target.” – Jens Eskelund
The challenges faced by the “Made in China 2025” initiative underline the complexities of transitioning to a high-tech economy while navigating a rapidly changing international landscape. The strategy’s most valuable contribution has been to elucidate China’s ambitions and the challenges it needs to address to realize them.