Asia | European Union | EconomicsTrade and Technology | Articles

made in china 2025 | industry 4.0

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

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

Huawei 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 to grow China's industry, and in turn to foster industrial development in China's poorest areas located in the interior of the country, such as the provinces of Qinghai, Sinkiang or Tibet. 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 announced by Mu Rongping, director general of the Innovation Center and development of the Chinese Academy of Science, "I do not believe that the Made in China 2025 plan and other industry-related plans pose a threat to global Economics and innovation. These industrial policies stem from traditional Chinese culture. In China whenever we set a new policy or economic measure we always have high expectations. Thus, if we get only half of it, we will be satisfied. This point of view has led China to change and, to some extent, to innovation.

Chinese economic development

In 1978 Deng Xiaoping came to power and changed all the Maoist Structures . 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". This justified a free market 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 to set up private businesses. In 1992 the expression of a "socialist marketEconomics " was adopted, a label to hide 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". He also added an increase in the study of current capitalism and the development of socialism with Chinese characteristics proper to the country, since if the party were to abandon Marxism it would lose "its soul and direction", besides qualifying it as "irreplaceable for understanding and transforming the world".

Made in China 2025 and Industry 4.0 plan

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 became a global leader in manufacturing operations and the world's second largest economic powerhouse over Germany. The Made in China paradigm has been evidenced by products made in China, from high-tech products such as computers or cell phones to consumer goods such as air conditioners. The goal of the Empire at the Center 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 plans to position itself in the middle tier in terms of global manufacturing power. And finally, in the third phase, from 2036 to 2049, when the People's Republic will celebrate its 100th anniversary, China wants to become the world's leading manufacturing country.

In 2013, Germany, a world-leading country in terms of 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 their 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 the design and quality of its products. The Industry 4.0 plan, presented in 2013 by the German government, focuses on the smart factory, meaning that the factories of the future will be more sustainable and intelligent; on cyber-physical systems, which integrate advanced technologies such as automotive, the exchange of data in manufacturing technology and 3D printing; and on goods and people.

Both 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 special focus on strengthening existing industries, promoting diversity and expanding the scope of many industries, enhancing regional cooperation through the use of the Internet for borderless manufacturing, new product innovation and product quality improvement, goal .

By 2020, the United States will be the most competitive manufacturing country 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 the world's anticipation of a fourth industrial revolution driven 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, new emerging economies such as South Africa, Vietnam or Hungary that have contributed to the global Economics in recent years will require more attention.


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

More blog entries