Is concern over 'Made in China 2025' justified?



From playing cards and plastic straws to new energy vehicles and advanced robotics, China is looking to drastically transform its manufacturing industry. For years China’s economy has been driven by cheap export items that have found there way into the homes of people around the world, and subsequently engendered a stereotyping of Chinese products as tacky and dispensable. Yet with any major economic growth comes an inevitable restructuring, and for China, that process has been neatly wrapped up and branded ‘Made in China 2025’ (MiC2025).

The focus must be shifted from quantity to quality.

Whilst this transition may appear a benign and necessary progression of the nation’s ambition, there is, in fact, a more sinister edge to these manufacturing objectives which have caused a very real panic around the globe.

The root of international anxiety can be traced to the stated objectives of the initiative. At its core MiC2025 is a pragmatic stepping stone to sustained economic success in a state that has experienced rapid domestic development. In similar fashion to the German ‘Industry 4.0’, MiC2025 will transition the state away from a labour-intensive industry and instead focus on areas more suited to the populations’ increasingly educated and technologically adroit skill set.

It is the audacity of these stated objectives that has caused such a stir. China is - with trademark temerity - aiming to establish a global monopoly of several key areas of manufacturing. This includes becoming the world’s largest agricultural equipment maker, supplying 80 per cent of the total aviation and aerospace equipment market, and becoming responsible for 80 per cent of global market share in renewable energy equipment.

This plan has been received as a sign of aggression by the broader international community, as tech-dependent states like Germany, South Korea and Japan fear the effects of Chinese disruption in their key sectors. The most blatant expression of discontent in relation to China’s assertiveness in the tech sphere is the ongoing trade war with the United States.

The now multidimensional and highly complex feud kicked off after a report released by the United States Trade Representative (USTR), which delivered a scathing assessment of Chinese business conduct with US partners. The findings included accusations of intellectual property theft and discrimination and formed the basis of US demands for greater reciprocity in the trade relationship.

The CCP’s self-sufficiency agenda will violate WTO quota regulations regarding technology substitution, a reconfiguration that could send a seismic quake through global trade. It is a forthright extension of a trend of Chinese disregard for standards set by international institutions, standards that have for decades defined the parameters of international etiquette.

Made in China 2025 is one example in a growing trend of Beijing choosing to play the game of governance by their own rules. For the last five years, China has been literally pushing the recognised boundaries in the South China Sea, building manmade islands and key infrastructure despite its claim being invalidated by an international arbitration tribunal. Despite having no legitimate claim over the highly significant maritime route, China has been able to proceed unimpeded.

Trump’s trade war, therefore, marks a significant departure from previous acquiescence to Chinese ambition. It appears there is only so much disruption it is willing to tolerate. The newest development in this Sino-US saga comes via the arrest of Huawei CFO Meng Wangzhou in Canada.

Meng was arrested on suspicion of defrauding US institutions, and whilst this incident happened some years ago, the timing is significant. Huawei is a leading figure in new 5G technology which will soon be the paramount technology for communications into the near future. Huawei already has a monopoly over the gargantuan Chinese market and has been looking to extend its influence further into the US sphere. Much like the assertiveness in the South China Sea, Beijing is looking to claim new territories.

So why is the world so worked-up by a manufacturing agenda? Because it is the latest, and perhaps the clearest representation of Chinese ambition in the Xi Jinping era. In years gone by the Middle Kingdom has been capable of proceeding under the veil of a ‘peaceful rise’ – but those days have passed. Whether China will make good on its ambition for technological supremacy remains to be seen. What is already becoming clear, however, is that international tolerance is wearing thin.

Oliver Lees is the China Fellow for Young Australians in International Affairs.

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