Multipolar World

Made in China 2025 and the new multipolar world

Jorge Costa Oliveira

In 2015, China adopted one of its most ambitious plans – the Made in China (MIC) 2025. MIC 2025 is an initiative that aims to guarantee China’s position as a global power in the high-tech industry, focusing on 10 strategic sectors: integrated circuits technology and new IT; automated machine tools and state-of-the-art robotics; aeronautical and aerospace equipment; maritime engineering equipment and high-tech vessel manufacturing; modern rail transport equipment; vehicles powered by alternative energy; energy equipment; new critical materials; biomedicine and high-performance medical apparatus; agricultural machinery and technology. 

Although inspired by the German Industry 4.0 plan, the MIC 2025 follows the path of the Far East development model which breaks the mold of low-tech, labor-intensive manufacturing that constrains the growth of developing economies; this original development model is characterized by industrial policies to develop strategic sectors, with financing underpinned by national financial entities and a strong government that aligns business interests with national interests.

Chinese authorities do not have much choice as companies in the manufacturing sector are increasingly relocating to countries with lower production costs. With MIC 2025, China hopes to reduce its dependence on foreign technology imports and invest heavily in innovation in order to establish Chinese companies that can compete both domestically and globally.

Even if some MIC 2025 targets are not met, the initiative will improve China’s general economic governance, contribute to sustainable development in combatting climate change and address the environmental impact, and strengthen its financial, education, health and manufacturing sectors.

Although Japan, South Korea, Taiwan and Singapore have already paved the way with this model, MIC 2025 has been heavily criticized by several Western powers, most notably by the US. This is, from the outset, a reaction to a change in the current paradigm of globalization – for decades developing countries were not supposed to become meaningful producers of intellectual property rights or technological innovation, nor producers of significant capital goods, much less leading in strategic sectors of the economy of the future.

But why was there no such reaction when Japan, South Korea or Taiwan similarly changed their economic model? These countries were not perceived as real threats. Firstly, in only a few sectors have they managed to produce state-of-the-art products and technology with significant market share. Furthermore, none of them is perceived as a potential threat to U.S. global leadership, much less a military threat.

The reality, however, is that we are heading towards a multipolar world where China, India, Brazil and other emerging countries increasingly compete in innovative and cutting-edge technology-based industries, and in the production of sophisticated products, including capital goods.

The intelligent approach is the one underlying the EU-China Comprehensive Agreement on Investment – ensuring access to the respective markets on equitable terms; and being rigorous in the reciprocity of this access.

Categories Multipolar World Opinion