China's Industrial Policy Pivots to Self-Reliance
China's industrial policy has shifted towards self-reliance, aiming to boost domestic supply chains and technological independence. This strategic pivot, encapsulated in the 'New Productive Forces' concept, seeks to enhance the country's competitiveness and economic security.
Initially, Beijing's 'Made in China 2025' initiative targeted avoiding the 'middle-income trap' and making Chinese companies global leaders. Now, the strategy has broadened to include technological self-reliance and bringing industrial supply chains within China's borders. The Ministry of Industry and Information Technology (MIIT) is upgrading traditional sectors like petrochemicals and iron and steel, inviting companies to identify model technologies for revitalizing manufacturing.
This approach has led to mixed results. In advanced railway transportation, new energy vehicles, and green energy technologies, Chinese companies have achieved high levels of self-sufficiency and global competitiveness. However, progress in sectors like advanced IT and ocean engineering has been more moderate. Beijing is also supporting lower-end industries to prevent them from relocating abroad and integrating them with emerging high-tech sectors.
The 'Made in China 2035' plan for key technologies such as chip-making equipment is under development. This could further strain China's relationship with the US and EU, as it aims to reduce dependence on foreign technology.
China's industrial policy, led by the MIIT and supported by the Premier and Communist Party leadership, is evolving to prioritize self-reliance and domestic supply chains. While this has led to success in some sectors, challenges remain in others. The 'Made in China 2035' plan, if implemented, could have significant global implications.
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