China 2025

DW:

Chinese economic policy still reverts to a planned model. The meticulous planning extends to China’s own economic expansion aims, something in evidence in the “Made in China 2025″ strategy paper. Presented in 2015, that document lists 10 key areas in which China intends to become a world leader by 2025. The scope of ambition is huge; aerospace, industrial robots and software, high-speed trains, electromobility, the modernization of power grids, medical tech, semi-conductors — it’s all in there.

Many of these industries are ones in which the Germans have led for years. Beijing is working hard on building an Industry 4.0 vision to rival Germany’s. But unlike in Europe’s economic powerhouse, China’s digitization drive is being led by the state rather than coming organically. And every two years, the decisions of the Chinese leaders are put to the test and re-adjusted if necessary.

In several sectors — telecommunications, high-speed trains, power generation — China is already well on the way to achieving its 2025 goals. “China is well on the way to becoming one of the world’s leading manufacturers of robotics and alternative powertrain vehicles,” says Jaqueline Ives from the Mercator Institute for China Studies (MERICS) in Berlin. “The problem areas are industrial software and the semiconductor industry.”

Many of these industries are ones in which the Germans have led for years. Beijing is working hard on building an Industry 4.0 vision to rival Germany’s. But unlike in Europe’s economic powerhouse, China’s digitization drive is being led by the state rather than coming organically. And every two years, the decisions of the Chinese leaders are put to the test and re-adjusted if necessary.

In their attempts to establish a world-leading semiconductor industry, the Chinese are experiencing strong resistance from the US, particularly with regard to planned acquisitions of American chip companies. In April, the US imposed a seven-year ban on US companies supplying components to Chinese telecommunications firm ZTE.

In addition, recent takeover attempts have failed, such as the $146-billion (€122-billion) bid from Singapore-controlled Broadcom to take over US chip giant Qualcomm. US President Donald Trump banned the sale himself, saying US national security interests were threatened by such a large scale technology transfer to Asia. Meanwhile, Broadcom’s corporate headquarters have relocated back to the USA.

The semiconductors example illustrates just how carefully China is planning things. Via the state-controlled “China Integrated Circuit Industry Investment Fund,” the government hopes to provide an additional €25 billion in 2018 to help Chinese companies buy high-tech chip companies around the world, according to Bloomberg.

Re ZTE via NYT: President Trump tweeted on Sunday that he was working with his Chinese counterpart, Xi Jinping, to prevent the collapse of the Chinese electronics giant ZTE, which shut down major operations after being sanctioned by the United States Department of Commerce last month. “Too many jobs in China lost,” Mr. Trump wrote. “Commerce Department has been instructed to get it done!”

2 Responses to “China 2025”

  1. feeblemind Says:

    It must be a result of those really smart people Spengler says run the bureaucracy. Leftists have always said top down planning was superior if you just had smarter people running things. So there you are.

  2. feeblemind Says:

    The Trump ZTE thing has me scratching my head. There must be wheels within wheels here that I just don’t see.

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