08 Sep 2015
China recently announced an important industrial 10-year plan titled “Made in China 2025”. The plan is designed to lift the country’s dipping manufacturing sector by encouraging innovation to enhance economic growth. It is the culmination of over 2 years of planning, initiated by four ministries, reviewed and adapted by 150 experts, and authorised by Premier Li Keqiang.
In recent years, the manufacturing sector, which was a major growth engine in leveraging China into one of the most prominent markets today, has been facing new challenges: low demand, increase competition from other Asian countries, slowing domestic economy, rising labour costs, environmental and resource constraints, and a stagnation in investments and exports.
The plan vows to boost 10 high-technology sectors, including robotics, aerospace, new-energy vehicles and advanced transport. To do this, Beijing wants to increase research spending to 1.68% of manufacturing revenues by 2025 (from 0.88% in 2013).
In addition to the 10 technology sectors, the blueprint aims to emphasise and improve across all sectors on quality efficiency, integrating manufacturing with information technologies, developing Chinese brands, enforcing green development and build up service-oriented manufacturing.
The key takeaway for the near future is China’s aim to focus on quality and developing local brands – similar to how Japan revolutionised their manufacturing from quantity to quality post WWII. With exports, investments and manufacturing output all decreasing, it is a likely next step for China to start focusing on developing a more quality oriented industry, and servicing these products to the domestic market.
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