‘Made in China 2025’ good for firms
Many wonder if 2019 will see an end to the “Made in China 2025” initiative.
One big reason for the ongoing trade dispute is US concern over the “Made in China 2025” strategy, which aims to boost technological upgrades and modernize the nation’s strategic industries. Some people believe bilateral trade talks will put pressure on China to reform its intellectual property rights (IPR) rules and abandon its “Made in China 2025” plan.
Under the plan, China hopes to transform itself from being a “world factory” to an advanced industrialized nation by fostering strategic emerging industries such as the 5G telecommunications sector. Although China’s research and development investment has grown markedly over the past decade, China still lags behind the US when it comes to innovation. The country spends almost twice as much on importing integrated circuits than on crude oil. This means Beijing urgently needs to boost its coretechnology innovation in the manufacturing sector to strengthen its competitiveness.
Advanced technology development is one of China’s core interests. China has a strong desire to sign a deal with the US to end the trade war, but it will defend the core interests of the Chinese economy.
China’s determination to push forward its technological upgrading does not mean the two countries have no chance to make a deal on trade. Enhancing IPR protection is a prerequisite for China to promote advanced technology development. As long as what the US wants is to improve the investment climate instead of cracking down on China’s technological rise, the two countries have an opportunity to find common ground.
Miao Wei, the minister of industry and information technology, said in 2017 that domestic and foreign firms will be treated equally under the “Made in China 2025” initiative. The plan won’t hurt the interests of overseas companies. Instead, it will offer them new opportunities as China moves to further open up its advanced industries to bring new momentum.
For example, China is gradually opening up its electric vehicle markets as the country vigorously develops this sector to focus more on high-technology segments. To some extent, US electric carmaker Tesla is a beneficiary of China’s efforts to push forward the “Made in China 2025” initiative.
China will continue to pursue its “Made in China 2025” plan, no matter what the result of the ongoing trade talks, but it will create abundant opportunities for foreign companies in the nation’s market to reach win-win cooperation under the plan.