China weighs new industrial push despite US pressure to rebalance

President Xi Jinping’s administration is quietly preparing a fresh iteration of its industrial strategy aimed at boosting China’s technological self-sufficiency, signaling a continued commitment to manufacturing dominance despite growing U.S. efforts to rebalance global trade, Bloomberg reported yesterday in an exclusive piece, citing people familiar with the matter.

According to sources who spoke on condition of anonymity, Chinese officials are drafting a successor to the controversial “Made in China 2025” plan, which originally set out to make the country a leader in key technologies such as semiconductors, electric vehicles and robotics. While the new initiative may avoid using the same branding to soften international criticism, the underlying goals remain largely intact.

One person familiar with the deliberations told Bloomberg that the updated blueprint will prioritize high-tech sectors like chip-making equipment and artificial intelligence. “The name may change, but the intention to lead in advanced manufacturing is unchanged.”

Beijing’s move comes as the U.S. under President Donald Trump intensifies pressure on China to shift toward a more consumption-driven growth model. Trump’s administration has imposed tariffs reaching 145% on certain Chinese goods earlier this year, though talks in Geneva led to a slight reduction in average rates to around 40%.

The new manufacturing plan is expected to be rolled out independently of China’s next Five-Year Plan, which will span from 2026 and is due to be unveiled during the annual National People’s Congress in March of that year. The manufacturing strategy, however, could be announced earlier or afterward, according to Bloomberg’s sources.

Officials drafting the next Five-Year Plan are also considering how to manage the balance between consumption and industrial output. One person involved in the discussions told Bloomberg that policymakers have debated whether to include a formal consumption target but are leaning against it due to limited tools to drive household spending.

“They’re hesitant to commit to a consumption ratio because they lack confidence in mechanisms to drive it effectively,” the person said.

The National Development and Reform Commission, China’s top economic planning agency, declined to comment on the deliberations, Bloomberg reported.

While Chinese leaders have publicly emphasized the need to stimulate domestic demand, real policy action has been limited. At the National People’s Congress in March, Premier Li Qiang declared that “vigorously boosting consumption” was a top priority, adding that officials must “make domestic demand the main engine and anchor of economic growth.” Still, the government has not unveiled major new measures in the months since.

China’s leadership remains wary of over-relying on consumption amid concerns about deflationary pressures and ongoing external shocks, such as reduced export demand resulting from U.S. tariffs. Manufacturing, by contrast, continues to be viewed as essential to economic security, employment, and geopolitical resilience.

“We must keep strengthening the manufacturing sector, adhere to the principles of self-reliance and self-improvement, and master key core technologies,” Xi said during a May 19 visit to a ball-bearing factory in Henan province, as quoted by state media.

Treasury Secretary Scott Bessent struck a cautiously optimistic tone earlier this month, telling CNBC on May 12 that the U.S. and China may still find common ground. “We need more manufacturing, they need more consumption,” Bessent said. “There is a chance to rebalance together so we’ll see if that’s possible.”

Yet China’s economic structure continues to diverge from developed economies. Consumption accounts for just 40% of its GDP — far below the 50% to 70% levels seen in the U.S. and Europe — while investment, especially in manufacturing, remains disproportionately high.

The original “Made in China 2025” strategy, introduced in 2015, laid the groundwork for the current trajectory. At the time, the State Council set goals to transform China into a “medium level” manufacturing power by 2035, and a “major manufacturing power” by 2049, the centenary of the People’s Republic.

Recent developments in Chinese AI, including a breakthrough from local firm DeepSeek, have further emboldened Beijing’s ambitions. Despite international pressure and trade frictions, China appears determined to continue its push for technological sovereignty — albeit under a less provocative banner. MDT/Agencies