'Made in China 2025,' launched in 2015, aimed to elevate China's manufacturing to high-value sectors like AI and green tech. It largely succeeded, dominating key areas like EV and solar production. China rarely discusses it due to international backlash over perceived unfair practices. The plan offers valuable insights for India's industrial development.
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The 'Made in China 2025' plan aimed to boost China's manufacturing, this also offers lessons for 'Make in India' initiative.
It is a strategic plan released by the Chinese government in 2015.
It outlines a decade-long vision to upgrade China's manufacturing sector, shifting its focus from low-cost, high-volume production to high-end, innovative, and technologically advanced manufacturing.
Key Focus Areas => It identifies ten strategic industries for intensive development and innovation. These include:
Government Support => The plan involves substantial government support, including capital expenditure, easily accessible loans, tax relief, and research and development (R&D) incentives, to strengthen domestic industries.
Technological Self-Reliance => A central goal is to reduce China's dependence on foreign technology and increase domestic market share in core components and materials.
International Criticism and Concerns => Many countries, particularly in the West, view it as a policy that provides unfair advantages to Chinese companies, distorts global markets, and imposes restrictive conditions on foreign firms. Concerns include:
Fear of Retaliation => The strong international outcry, particularly from the United States, which imposed tariffs and export curbs, prompted China to de-emphasize the slogan publicly to avoid actions like sanctions or trade barriers. This tactical shift allows China to continue pursuing the plan's objectives without using the controversial label.
Dominance in Green Technologies => China now dominates key green technology sectors. It accounts for over 75% of global lithium-ion battery manufacturing, nearly 80% of solar module production, and holds the largest share of the world's electric vehicle output.
Advanced Infrastructure => High-speed rail has become a global example of China's engineering prowess, with extensive domestic networks and export contracts worldwide.
Progress in Robotics and Sensors => Narrowing the gap with global leaders. For example, China's robot density in manufacturing increased from 97 units per 10,000 workers in 2017 to 392 units in 2022. This increase surpasses both the United States and Japan in terms of robot density in manufacturing.
Focus on R&D and Upskilling => Strong emphasis on research and development, leading to increased innovation and the upskilling of China's workforce, creating integrated and resilient supply chains.
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Areas of Shortfall The main areas where China has fallen short of its ambitious goals are in achieving self-sufficiency in advanced semiconductors and manufacturing large passenger aircraft, largely due to U.S. export controls and the complexity of these industries. A notable downside is the excessive focus on manufacturing, which has led China to neglect the demand side of its economy and has prevented the full development of its services sector. This contributes to internal economic imbalances. |
Strategic Focus on Key Sectors => Instead of a broad approach, 'Make in India' could benefit from identifying and prioritizing a few strategic industries where India can build a comparative advantage and achieve self-sufficiency, such as electric vehicles, renewable energy components, or medical devices.
Investment in R&D and Innovation => India needs to significantly boost its investment in R&D, promote a strong innovation ecosystem, and encourage collaboration between academia, industry, and government.
Skill Development and Workforce Upskilling => India must prioritize skill development programmes aligned with the needs of advanced manufacturing, to ensure a steady supply of skilled labor for emerging industries.
Balancing Manufacturing with Demand and Services => Avoid an excessive focus on manufacturing that neglects the demand side of the economy or the potential of its services sector. 'Make in India' should aim for a balanced growth, integrating manufacturing with its strong services base to create a more resilient and balanced economy.
Navigating International Relations => China's experience with international backlash indicates the importance of how industrial policies are framed and communicated. India needs to ensure its policies are transparent, comply with international trade rules, and avoid protectionist language to mitigate possible trade disputes and sanctions.
Building Supply Chains => Focus on developing comprehensive domestic supply chains and integrating them with global value chains to enhance competitiveness and resilience.
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PRACTICE QUESTION Q.Critically analyze the economic rationale behind launching the Make in India initiative. 150 words |
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