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Updated August 11, 2020
Made in China 2025 Industrial Policies: Issues for Congress
China aims to advance its national development goals and
future global economic position through industrial policies
that seek global civilian and military leadership in advanced
and emerging technologies. China's policies feature a heavy
government role in directing and funding Chinese firms to
obtain foreign expertise and intellectual property (IP) in
areas where the United States has strong comparative
advantages (e.g., aerospace, semiconductors,
microelectronics and pharmaceuticals).
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Made in China 2025 (MIC 2025) a broad umbrella
industrial plan China introduced in 2015 seeks to boost
China's economic competitiveness by advancing China's
position in the global manufacturing value chain,
leapfrogging into emerging technologies, and reducing
reliance on foreign firms. MIC 2025 emphasizes technology
advancement and innovation as drivers of growth and
productivity, although the strategy looks to obtain foreign
expertise to fill key technology gaps. The plan promotes
diverse forms of state ownership and control and allows
Chinese firms flexibility to access global markets,
potentially obscuring the full extent of the role of the state.
MIC 2025 calls for breakthroughs in 10 sectors and
supports a range of sector-specific plans. (Figure 1)
Figure I: China's Industrial Priorities (2015-2025)
Source: Notice of the State Council on Issuing Made in China 2025,
May 8, 2015, Guofa [2015] No. 28.
MIC 2025 sets goals for each sector to increase the share of
production by Chinese firms. (Figure 2). China seeks to
lead at each point in the value chain. In semiconductors, for
example, China seeks to build a globally competitive
industry in design, operating systems, manufacturing,
packaging, testing, equipment and materials.
Figure 2: Select MIC 2025 Domestic Content Goals
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Source: U.S.-China Business Council.
Note: Dates for domestic content goals range from 2020 to 2030.
China seeks to upgrade its economy from one that largely
assembles goods for foreign firms to one that increasingly
invents the products it makes. MIC 2025 notes that
China's manufacturing sector is large but not strong. The
plan prioritizes upgrading manufacturing through advances
in technology innovation (smart manufacturing) and
manufacturing-tied services. Specifically, China aims to:
By 2025. Boost manufacturing quality, innovation, and
labor productivity; obtain an advanced level of technology
integration; reduce energy and resource consumption; and
develop globally competitive firms and industrial centers.
By 2035. Reach parity with global industry at intermediate
levels, improve innovation, make major breakthroughs, lead
innovation in specific industries, and set global standards.
By 2049. Lead global manufacturing and innovation with a
competitive position in advanced technology and industrial
systems. (This date coincides with the 100th anniversary of
the founding of the People's Republic of China.)
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Tax, trade, and investment measures. China uses tax
preferences to incentivize foreign firms to shift production
and research and development (R&D) to China. The
government also uses domestic standards, IP, competition,
and procurement policies, and other market access terms
that seek to transfer foreign know-how to Chinese entities
and use Chinese suppliers for key components.
Forced joint ventures (JVs) & partnerships. China's
formal regulations and informal certifications that require a
Chinese partner drive multinational firms into JVs. In many
sectors, such as aerospace, China leverages its role as a
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