What is “Made in China 2025”?
Since China became the “world’s factory” upon its entry into the WTO in 2001, economic growth in the country has amazed the world. Since 2010, China has risen to become one of the world’s biggest economies, and according to some speculators, it could overtake the US by the 2030s.
However, as China’s education level rises alongside manufacturing competition from other countries such as Vietnam or India, the government has begun to make moves to attempt to transition the economy into more high-tech and innovative fields.
Premier Li Keqiang first issued the Made in China 2025 initiative in 2015. At its heart, the plan is to upgrade the level of technical-oriented manufacturing capabilities of the country by highlighting and promoting 10 specific sectors. These are fields that the plan creators see as key to China’s economic future.
The plan has been controversial for many reasons, and from 2018 it has been de-emphasized in official government announcements to allay international concern. While now less obvious in official media, experts believe the MIC2025 plan to be still in effect and driving a lot of the current government spending plans. While official figures on funding have not been released, it is believed that current spending is in the hundreds of billions of dollars.
Made in China 2025 – 10 sectors
These 10 sectors represent fields that represent the future of technology as China seeks to close the gap in terms of innovation and change the general perspective on the quality and overall level of Chinese manufacturing capabilities.
What is the goal of Made in China 2025?
MIC2025 was announced with the specific goals of raising the domestic content of core components and materials to 40% by 2020 and 70% by 2025.
Alongside this, there are also calls to reduce China’s consumption of energy and materials, build new centers of innovation, and strengthen intellectual property rights.
Whether goals have been reached so far remains to be seen due to the pivot away from public announcements on the plan and the effects of COVID-19. However, legislation introduced in 2020 and 2021 has made some effort to simplify foreign investment and tighten copyright laws to encourage further foreign ventures.
Since the announcement of the plan, Chinese technology has spread worldwide. Chinese brands are now well-known in everyday spaces such as mobile phones or computers. The country has also made efforts to market its goods and technology during the COVID-19 pandemic, such as the attempts at Vaccine diplomacy and USD1.4 trillion spent to spread 5G technology worldwide.
China’s Foreign Investment Law of 2021 has been touted as an attempt to simplify the procedure for foreign companies opening branches in China. You can read INS Global’s article on the changes this has made to WFOEs (Wholly Foreign Owned Enterprises) and new FIEs (Foreign Investment Enterprises) here.
Should China follow through with the changes to copyright law enacted in 2021, this may calm fears of intellectual property theft.
When these changes are combined with the core principles of MIC2025, it suggests an overall desire to increase foreign investment in the country to aid domestic funding and innovation.
Establish your presence in China
While the final likelihood of the success of MIC2025 has been called into question for many reasons, a vast amount of investment into future technology has already been made. The plans to make it easier for foreign firms to invest in China may also mean that foreign companies could see new ways to make their mark in China.
Whatever the result of MIS2025, these changes should persuade foreign investors that there are still opportunities in China.
INS Global has a range of HR outsourcing services available to aid your entry into the Chinese market, from PEO and global Employer of Record solutions to company incorporation support, payroll outsourcing, and contractor management.
Whatever your requirements, INS Global can help you achieve your expansion goals. To learn more, speak to our team of experts today.