From factory floor to global leader – China's ambitious Made in China 2025 plan

The People’s Republic no longer wants to be the world’s factory floor. Handelsblatt correspondent Stephan Scheuer visits innovative companies and shows how China is copying and adapting Industry 4.0 concepts – and catching up faster than many expected.

Background

Made in China 2025 is the industrial policy that Beijing launched in 2015. In ten key sectors – including robotics, aerospace, new materials, electric vehicles, biotechnology, rail and artificial intelligence – China is to reach the global top and generate at least 70 per cent of value added domestically. This report examines progress two years into the programme.

The plan was always more than pure industrial policy – it was a strategic declaration. China’s leadership had recognised that the previous growth path – built on cheap manufacturing and technology transfer from foreign companies – was reaching its limits. To avoid the “middle-income trap” that catches many emerging economies, a breakthrough to innovation superpower status was essential.

Under Trump, Made in China 2025 became the flashpoint of the trade war. The US government saw in the programme an open claim to break American technology dominance – and responded with tariffs, export controls and a campaign against Chinese tech companies such as Huawei and ZTE. Beijing has since mentioned the programme’s name publicly less often. But the goals continue to be pursued consistently, partly under new labels such as “new productive forces” or “indigenous innovation.”

In several sectors China has already become the global market leader: electric vehicles, batteries, solar panels, industrial robots (by deployment), high-speed trains and commercial drones. In semiconductors – the most contested battlefield – western decoupling has slowed the catch-up without stopping it: Chinese manufacturers such as SMIC are now producing 7-nanometre chips, even if yields are lower and the most advanced EUV lithography machines from Dutch company ASML cannot be exported to China.

In commercial aviation, the COMAC C919 – taken into scheduled service in 2023 – marks a milestone. China has thereby become only the third territory after the United States and Europe to complete development of its own medium-haul jet. Core components such as engines still come from western manufacturers, but the long-term plan is clear: full industrial independence.

The contrast with the time of this report is stark. Then, Made in China 2025 was an ambitious plan with an uncertain outcome. Today it is – despite all resistance – one of the few long-term industrial strategies that has been largely implemented.