Some foreign media have expressed concern that “Made in China 2025” aims to replace foreign technology with Chinese technology in high-end industries, to substitute Chinese manufacturing for foreign manufacturing, and to enhance the global competitiveness of China’s high-tech enterprises.

　　Why is it necessary to develop indigenous core technologies in high-end industries? Is the goal really to replace foreign technologies? To address these questions, reporters interviewed government officials and industry experts.

　　It is impossible to replace all foreign-made products.

　　“Some foreign media believe that ‘Made in China 2025’ is all about import substitution, but this is a misreading and a misunderstanding,” said Li Beiguang, Deputy Director of the Planning Department of the Ministry of Industry and Information Technology, in an interview with Economic Daily. He emphasized that China remains a developing country with substantial demand for advanced technologies and products. The formulation and implementation of “Made in China 2025” are aimed at accelerating the transformation and upgrading of China’s industrial sector; promoting independent innovation and developing high-end manufacturing are also intended to meet the needs of China’s economic development, improve people’s livelihoods, and safeguard national security.

　　In response to foreign media claims that “Chinese technology is set to replace foreign technology,” Xu Zhaoyuan, a researcher at the Industrial Economy Research Department of the Development Research Center of the State Council, analyzed that “Made in China 2025” primarily emphasizes the development of high-end manufacturing. Given that this strategic goal is benchmarked against developed countries such as the United States, Japan, and Germany—nations whose economies are dominated by high-value-added, high-end industries—it is not surprising that some foreign media assert that China aims to supplant foreign manufacturers in these very same high-end sectors.

　　“Some foreign media are overly concerned; no single country can monopolize or replace all high-tech industries,” said Xu Zhaoyuan. Drawing on the experience of the world’s major developed economies, he noted that latecomer countries generally follow a path of industrial upgrading and steadily increasing the share of high-end industries—yet this process has not had a significant impact on the global manufacturing landscape. For instance, during their catch-up and rise in manufacturing, Japan, South Korea, and Germany did not completely displace U.S. manufacturing.

　　In other words, the implementation of “Made in China 2025” will undoubtedly spur further technological breakthroughs in certain industries, enabling China to develop its own high-end technologies and thereby exert competitive pressure on the high-end sectors of other countries. However, given that each country has its own core industries, it is unlikely that any single nation’s manufacturing sector will completely replace foreign manufacturing.

　　Since the beginning of this year, several international organizations—including the Mercator Institute for China Studies in Germany, the European Union Chamber of Commerce in China, and the U.S. Chamber of Commerce—have released research reports on “Made in China 2025.” In response, Li Beiguang emphasized that the report’s references to domestic market share in relevant industries and other development indicators associated with “Made in China 2025” are all drawn from a research report prepared by the Strategic Advisory Committee for the Manufacturing Powerhouse Strategy. These indicators are predictive in nature and primarily serve as a guiding framework. Moreover, the Strategic Advisory Committee is a research and advisory body composed of experts, scholars, and corporate executives; when it published the roadmap, it explicitly stated that the aforementioned indicators are forward-looking, non-binding, and in no way constitute government action.

　　Will not lead to unfairness

　　Following the release of “Made in China 2025,” some have argued that China will increase investment in domestic enterprises, thereby creating unfairness for foreign-invested firms. In response, Li Beiguang stated frankly that, over the more than two years since the launch of “Made in China 2025,” the policy has consistently applied the same standards to both domestic and foreign-invested enterprises, treating them equally. In January 2017, the State Council issued a notice stipulating that the strategic policies and measures under “Made in China 2025” apply equally to both foreign-invested and domestic enterprises.

　　For example, in establishing manufacturing innovation centers, the National Power Battery Innovation Center has jointly set up a laboratory with the University of Western Ontario in Canada, and the National Additive Manufacturing Innovation Alliance now has three overseas member organizations. In the field of intelligent manufacturing, Nantong COSCO KHI Ship Engineering Co., Ltd.’s “Pilot Demonstration Project for an Intelligent Shipbuilding Workshop” has been designated as a pilot demonstration project for intelligent manufacturing.

　　Li Beiguang added that the C919 is a prime example of Sino-foreign cooperation: its engines, avionics, and flight-control systems are supplied by numerous joint ventures and wholly foreign-owned enterprises in Europe and North America, including such U.S. firms as General Electric and Honeywell. Among the Tier-1 suppliers alone, more than a dozen are international companies, while the number of Tier-2 and Tier-3 suppliers runs into the hundreds.

　　“The view that ‘only supporting domestic enterprises while putting pressure on foreign-invested firms’ is a misinterpretation, a subjective assumption, and a deliberate distortion,” said Qiao Biao, Director of the Planning Research Institute at the CCID Think Tank. “On the surface, this appears to be concern over China’s manufacturing development strategy; in reality, however, it is an attempt to leverage international discourse hegemony to exert pressure on China’s manufacturing sector, stoke dissatisfaction among foreign-invested enterprises, and undermine the attractiveness of China’s manufacturing investment environment.” Further analysis reveals that the primary source of skepticism from European and American countries regarding “Made in China 2025” is their apprehension that the rise of China’s high-end manufacturing will erode their share of the global market.

　　It should be noted that many high-tech technologies and products from developed countries are currently subject to strict restrictions or outright export embargoes against China. “Our reliance on others for core technologies is the fundamental reason why China’s manufacturing sector is large in scale but lacks strength,” Qiao Biao argues. He believes that unless this challenge is addressed, not only will the transformation and upgrading of traditional industries remain mere rhetoric, but the development of strategic emerging industries will also lack a solid foundation. The overarching objective of “Made in China 2025” is precisely to rely on independent innovation to remedy our developmental shortcomings and meet the ever-upgrading domestic market’s demand for high-quality products.

　　It will create enormous business opportunities for both domestic and international markets.

　　Qiao Biao candidly stated that it is entirely legitimate for any country to seek to enhance the quality and sophistication of its military equipment; however, pursuing such improvements behind closed doors—in the context of globalization—is tantamount to “building a car in isolation,” and will ultimately fail to achieve the desired objectives.

　　“Our country is actively advancing ‘Made in China 2025,’ which offers vast market opportunities and promising prospects for cooperation to enterprises from around the world,” said Li Beiguang. He added that, since the launch of “Made in China 2025,” China has engaged in proactive exchanges and cooperation with several countries. For instance, a cooperative mechanism has been established between “Made in China 2025” and Germany’s “Industry 4.0,” yielding positive results.

　　However, for reasons such as cost, the competitive advantages and priorities of developed countries in Europe and North America remain primarily in high-end manufacturing, and China’s manufacturing sector still has a way to go before it transitions from the mid- to low-end to the mid- to high-end. Li Beiguang noted that, over the coming period, China will continue to maintain a complementary relationship with manufacturing powerhouses such as the United States and Japan, and that the existing global industrial division of labor and competitive landscape are unlikely to undergo any disruptive changes in the short term.

　　What is certain is that, as the Chinese market continues to pursue higher product quality and advanced equipment, its own level of development will rise—and this, in turn, will inevitably drive the expansion of the global market. According to Qiao Biao’s analysis, on the one hand, the implementation of “Made in China 2025” will create enormous market opportunities for both domestic and foreign enterprises. To enhance the quality of their manufacturing, Chinese companies must upgrade their process technologies and equipment; in the course of this upgrading, they will need to collaborate with developed countries, which will also lead to greater penetration of foreign equipment and technology into the Chinese market.

　　On the other hand, with the implementation of “Made in China 2025,” more Chinese and foreign enterprises will strengthen cooperation in the field of equipment technology. China is the world’s largest consumer market and also the largest market for the application of advanced technologies; to enter the Chinese market, foreign equipment manufacturers must localize their products. For example, General Electric of the United States now holds a 17% market share in China, precisely because it has adapted its products to China’s road conditions, climate, and other local factors, thereby continuously expanding its market presence.

　　Li Beiguang stated that the launch and implementation of “Made in China 2025” by no means amounts to “boycotting foreign products” or “replacing foreign manufacturing.” On the contrary, throughout the process of advancing “Made in China 2025,” China will consistently uphold the principles of open development and win-win cooperation, deepen collaboration with more foreign enterprises, and create a favorable environment for pragmatic inter-firm partnerships. (Reporter: Ji Leilei)