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Beijing accelerates its change in economic strategy as Germany tries to reinvent itself as a manufacturing powerhouse with its 'Industry 4.0'

From being the great factory of the lowest products in the world price chain to becoming a manufacturing powerhouse appreciated by the added value that China can contribute to its production. The 'Made in China 2025' plan is underway with the purpose to operate change in a few decades. The Chinese push is intended to be countered by Germany with its 'Industry 4.0', in order to preserve international recognition of what is produced by German industry.

Huawei's booth at Mobile World Congress 2017

▲ Huawei Booth at Mobile World Congress 2017 [Huawei]

article / Jimena Puga

"Made in China 2025" is a political-economic plan presented by Chinese Premier Li Keqiang in May 2015. The main goal of this initiative is the growth of Chinese industry, and in turn to foster the development in China's poorest areas in the interior of the country, such as Qinghai, Xinjiang and Tibet provinces. One of the goals is to increase the domestic content of basic materials to 40% by 2020 and 70% by 2025.

But what does the People's Republic want to achieve with this initiative? As Mu Ronping announced, director of the Innovation Center and development According to the Chinese Academy of Science, "I don't think the Made in China 2025 plan and other industry-related plans pose a threat to the Economics and innovation. These industrial policies derive from traditional Chinese culture. In China, whenever we set a new political or economic measure, we have high expectations. So, if we get only half of it, we will be satisfied. This view has led China to change and, to some extent, innovation."

China's economic developments

In 1978 Deng Xiaoping came to power and changed all the Structures Maoists. Thus, from an economic perspective, law has become a decisive element in resolving conflicts and maintaining social order in China. Deng tried to establish a socialist system, but with "Chinese characteristics." In this way, a Economics and, consequently, the obligation to develop new rules and Structures. In addition, the president introduced the concept of democracy as a necessary instrument for the new socialist China. The most important legal reform was the possibility of creating private businesses. In 1992, the expression "Economics of the socialist market", a label to hide a real capitalism (1).

The current president of the People's Republic, Xi Jinping, has spoken out against economic protectionism and in favor of balancing globalization to "make it more inclusive and equitable." It also added an increase in the study of current capitalism and capitalism. development socialism with Chinese characteristics is typical of the country, since if the party were to abandon Marxism it would lose "its soul and leadership", in addition to describing it as "irreplaceable to understand and transform the world".

The Made in China 2025 plan and Industry 4.0

Over the past decade, China has emerged as one of the most significant manufacturing miracles in history since the Industrial Revolution began in Britain in the 18th century. By the end of 2012, China had become a global leader in manufacturing operations and the world's second-largest economic power ahead of Germany. The Made in China paradigm has been evidenced by products made in China, from high-tech products such as computers or mobile phones to consumer goods such as air conditioners. The goal of the Central Empire is to extend this plan to three phases. In the first, from 2015 to 2025, China aims to be on the list of global manufacturing powers. In the second, from 2026 to 2035, China expects to position itself at a medium level in terms of global manufacturing power. And finally, in the third phase, from 2036 to 2049, the year in which the People's Republic will celebrate its centenary, China wants to become the world's leading manufacturing country.

In 2013, Germany, a world leader in industrialization, published its Industry 4.0 strategic plan. Known for its prestigious brands such as Volkswagen or BMW, the country's leading industries have emphasized its innovative strength that allows them to reinvent themselves again and again. The Industry 4.0 plan is another example of the German country's manufacturing strategy to compete in a new industrial revolution based on industrial integration, the integration of industrial information, the Internet and artificial intelligence. Germany is known worldwide for thedesign and quality of their products. The Industry 4.0 plan, presented in 2013 by the German government, focuses on the smart factory, i.e. making the factories of the future more sustainable and intelligent; in cyber-physical systems, which integrate advanced technologies such as automotive, exchange of data in manufacturing technology and 3D printing, and in goods and people.

Both plans, Industry 4.0 and Made in China 2025 , focus on the new industrial revolution and employ elements of manufacturing digitalization. The core of the German plan is the cyber-physical system, i.e. a mechanism controlled or monitored by algorithms closely linked to the Internet and its users, and integration into dynamic value creation mechanisms. The Chinese plan, in addition to the "Internet Plus Industry" action plan, has a goal Particular focus is on consolidating existing industries, promoting diversity and widening the scope for action of many industries, enhancing regional cooperation through the use of the Internet for borderless manufacturing, innovation of new products and improvement of product quality.

By 2020, the United States will be the most competitive country in manufacturing in the world, followed by China, Germany, Japan, India, South Korea, Mexico, Taiwan, Canada, and Singapore. Of these ten countries, six are Asian countries, one is European and the remaining three are members of NAFTA (North American Free Trade Agreement).

This new shift in industrial strategy translates into a world anticipation of a fourth industrial revolution brought about by technological advances. China will undoubtedly be one of the international leaders of this revolution thanks to the Made in China 2025 and One Belt One Road plans, however, the new emerging economies such as South Africa, Vietnam or Hungary that have contributed to the Economics in recent years will require more attention.

 

(1) Vid. ARANZADI, Iñigo González Inchaurraga, Derecho Chino, 2015, p. 197 et seq.

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