Tuesday saw the unveiling, by the Chinese State Council, of “Made in China 2025.” Authorized by Premier Li Keqiang, the national campaign is a 10-year long action plan that aims to propel China as the world’s most dominant manufacturer.

The news comes at a time when PM Narendra Modi paid a visit to Chinese political leaders to discuss one another’s economic futures. “The potential lies in manufacturing, processing as well as in infrastructure,” said the Indian prime minister.

PM Modi returned to his country with a large number of MoUs worth $22 billion. The agreements show China’s strong interest in India’s industries, and they believe such a partnership will help their own economic cause.

“Made in China 2025” is an ambitious plan. However, China realizes the importance of competing against current superpowers and developing countries in the manufacturing sector Investing money to deserving areas, such as emerging technologies and renewable energy has become paramount.

The plan specifically lists 10 sectors as the focus for technological advancements.

1. New information technology
2. Numerical control tools and robotics
3. Aerospace equipment
4. Ocean engineering equipment and high-tech ships
5. Railway equipment
6. Energy saving and new energy vehicles
7. Power equipment
8. New materials
9. Medicine and medical devices
10. Agricultural machinery

It’s important for China to address these areas, given that the status quo isn’t exactly in favor of the economy. It has slowed down in part due to the struggles of domestic factories. Stagnant demand and operations well under capacity have left the manufacturing sector dormant. Rising labor costs are eliminating China’s traditional cost advantages.

Trends in manufacturing are now reflecting a new kind of industrialization that isn’t powered by human labor but by core technologies. Mass production techniques are aging and being replaced by customization.

Miao Wei, minister of industry and information technology (MITT), expects that “by 2025… China will basically realize industrialization nearly equal to the manufacturing abilities of Germany and Japan at their early stages of industrialization.”

Other officials in the MITT understand the importance of not simply implementing changes to a single industry. Reformation of policies and financial support have to be pervasive across the manufacturing sector, so that the country can stimulate true innovation and promote sustainability.

But where true innovation comes from is arguable. Li Yizhong, head of the China Federation of Industrial Economics (CFIE), suggested that the plan should incentivize Chinese companies to primarily focus on technology research.

“Technological breakthrough should be pioneered by market players. Companies should work together to focus on developing key technologies that will benefit an entire sector.”

With China accounting for 20% of the world’s manufacturing, “Made in China 2025” will be an imperative task moving forward.

Image via: flickr/Dennis Jarvis

Uncategorized