Made in China 2025 (MIC2025) exemplifies how China’s industrial strategy is a comprehensive mobilization of state resources, private enterprise, and national priorities that has reshaped global technology competition. Across ten key technologies in MIC2025, China has met or exceeded many of the very ambitious global market share, local sourcing, and technology development targets it set for itself in 2015. While it has fallen short on others, in most cases it still made significant gains in each sector. The bottom line is that after a decade of state support, China is more innovative, has moved up the global value chain, and has solidified its status as a global manufacturing powerhouse. In evaluating China’s progress, several lessons can be drawn:
The technologies in which China met most of its targets benefited from consistent, long-term government support, vertically integrated supply chains, and/or economies of scale. These include electric vehicles (EVs), electrical equipment, biopharma and high-performance medical devices, ships, and space equipment. China was already on track to dominate ships and electrical equipment from state support before MIC2025.
China used multiple interlocking policy tools to support targeted industries and help companies integrate their supply chains and scale up production. These policies included market entry barriers; subsidies, tax breaks, and financial incentives; forced technology transfer policies; equity investments and government guidance funds; and government and state-owned enterprise (SOE) procurement.
China missed its goals in markets dominated by a small number of strong global incumbents and when Chinese firms struggled to overcome barriers to entry, including extensive upfront investment and specialized intellectual property (IP) tightly controlled by incumbents, leading to mixed results in aviation, new materials, and integrated circuits.
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