What ‘Made in China 2025’ can teach Trump’s America about reviving industry

Richard Kozul-Wright and Daniel Poon say China’s 10-year road map aims for policy and financial support for technological innovation, and institutional foundations for new sources of growth, offering valuable lessons for a US tackling an eroding manufacturing base

4-MIN READ4-MIN

Chinese students work on a humanoid robot designed by them with funding from a Shanghai investment company, at the World Robot Conference in Beijing, last October 21. Photo: AP

Published: 4:15pm, 1 May 2017Updated: 11:31am, 5 Sep 2018

While the world watches anxiously for signs of US President Donald Trump’s next move vis-à-vis China, Chinese leaders remain focused on the next stage of their country’s ongoing economic transformation. What they do should interest everyone – especially US policymakers.

China’s industrialisation process, like that of other successful East Asian economies, has combined profit-led investment, active industrial policy and export discipline. But that approach has its limits, exemplified in the numerous developing countries that have attempted to climb the same development ladder, only to become stuck on the middle rungs or even fall back, owing to what Harvard University economist Dani Rodrik has called “premature de-industrialisation”.

China hopes to avoid this fate, with the help of “China Manufacturing 2025” or “Made in China 2025” – a road map released by Premier Li Keqiang (李克強) in 2015 to guide the country’s industrial modernisation. The strategy focuses on developing advanced manufacturing sectors, but also considers how producer services, service-oriented manufacturing and green technology can complement that process.

Made in China 2025: How Beijing is revamping its manufacturing sector

As part of the strategy, policy and financial support will be provided to spur technological breakthroughs in 10 key areas, including next-generation information technology; high-end computer-controlled machine tools and robotics; space and aviation equipment; alternative-energy vehicles; and biomedicine and high-performance medical devices.