Siah Hwee Ang says the 'grand strategy' looks ambitious but needs to be put in perspective of the overall development goal for the year 2049

By Siah Hwee Ang* 

‘Made in China 2025’ is the first step towards making China a technology super power in the world by the year 2049, the country’s 100th birthday.

Milestones are being set along the way, with targets in 2020, 2025, then 2035 and finally 2049.

The guiding principles for this grand strategy cover five areas.

1. Innovation-driven development and capability

Under this umbrella, China seeks to promote trans-industrial and interdisciplinary collaborative innovation, digitalization, network technologies, and smart technologies in manufacturing.

Initiatives will be launched to provide platforms where Chinese companies can engage in more research and development work in both products and services.

There are also going to be initiatives around innovation design in major areas, such as traditional manufacturing, strategic emerging industries, and the modern service industry. There are plans to comprehensively promote advanced designs that are green, smart and collaborative.

Building ecosystems and linking them to enhanced intellectual property regimes are further significant developments that have been earmarked.

2. Quality and value

Quantity rather than quality typified the Made in China brand of the past.

‘Made in China 2025’ emphasises the importance of quality as the core principle of manufacturing leadership.

Various mechanisms will be put in place to encourage enterprises to assume responsibility for product quality. There is also more support for quality-related research.

The initiative will promote high quality domestic branding. This will be aided by professional institutions focusing on brand cultivation, brand management consulting and marketing services.

At the same time, China will develop more standardised laws and regulations, and will promote a quality-first culture.

3. Green development

This will fundamentally involve the application of energy-saving and environmental protection technologies, processes and equipment to enable cleaner production.

For example, green upgrading in traditional industries like steel, nonferrous metals, chemicals, building materials, light industry, and printing and dyeing will be promoted.

Yet another example is to improve the energy efficiency of energy-using products like electrical machines, boilers, and combustion engines, and accelerate the elimination of outdated mechanical and electrical products and technology.

In essence, this is about developing the recycling economy, improving the efficiency of resource recycling, and establishing a sustainable manufacturing system.

A shorter-term target is to build a thousand green demonstration factories and a hundred green demonstration industrial parks by 2020.

4. Structural optimisation

Technological advancements aside, there should be structural upgrades to ensure that technological advancements serve their purpose.

Structural optimisation will be introduced to support the development of advanced manufacturing, to upgrade traditional industries, and to transform production-oriented manufacturing into service-oriented manufacturing.

For example, excess capacity control will be needed, in particular when the focus shifts from one type of manufacturing activity to another that is more service-driven within the manufacturing sector.

Manufacturing enterprises will be encouraged to invest in services, to develop customised services, to practice life cycle management, to execute network marketing, and to provide online support services.

A key plan here is to support eligible enterprises to evolve from equipment providers into integrated system contractors and from product providers into total solution providers.

5. Talent-oriented development

Related to the structural optimisation is the notion of inputs, in this case skilled labour and upskilling of individuals.

There will be pragmatic mechanisms for personnel hiring, placement, and training, which will cultivate professional, technical, managerial, and administrative personnel to meet the demands of modern manufacturing.

With this, we should also see talented young Chinese professionals and students, especially those with a professional and technical background, go abroad for study and training.

International training bases in China will be established to ensure a seamless supply of talent to cope with the advancements in technologies.

Further, an entrepreneurial mindset will be encouraged, with mechanisms in place to support the new and emerging technologies being generated.

The grand strategy

As mentioned in the first part of this three-part series, the grand strategy of ‘Made in China 2025’ looks like an ambitious one.

But it is guided by China’s overall development goal for the year 2049.

Therefore, we are unlikely to observe many concrete performance benchmarks highlighting what needs to be achieved by 2025.

While not new to Chinese individuals, being innovative and entrepreneurial is largely new to China as a country.

Speed and critical mass are what China has been good at, but now the brakes have been put on.

‘Made in China 2025’ does put China at the crossroads, and perhaps also puts the rest of the world in a state of uncertainty.

This article is the second of a three-part series on Made in China 2025 - the first is here)

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*Professor Siah Hwee Ang holds the BNZ Chair in Business in Asia at Victoria University. He writes a regular column here focused on understanding the challenges and opportunities for New Zealand in our trade with Asia. You can contact him here.

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6 Comments

A cultural revolution is required first. Pumping out cheaper copies of whatever others elsewhere have done previous, is neither innovative or creative. Sending people offshore to study narrow paths of theory is neither innovative or creative. Good luck China.

and learning the "classics" is good for what exactly? like media studies we are overflowing with today, pretty much useless as a primary subject for most people. Sure a worthy area to study in your own time btw.

I've often wondered about this though. Education that focuses on critical thinking, ideation and invention must surely must be coupled with culture that encourages the same in order to create the most innovative outcomes.

How much of this depends in part on our history and philosophy, arts and the like?

Being allowed to question is surely a huge part of innovation. Look at some cultures where you're ostensibly allowed to question, but not really - parents see debate as a sign of terrible disrespect, teachers give bad grades to pupils who question their statements, debating with a manager will ensure you don't get a pay rise or promotion - and you'll see a place with low levels of innovation.

My significant other comes from such a background but happily went to a rare university where she was taught to question...not in all papers, but in enough...something that was antithetical to the rest of her upbringing and wider culture. She loves the values in NZ of always questioning what you're told (interestingly, this value is so strong in post-WW2 Germany that it provides a challenge for leaders...no wondering why).

Add in low regard for honesty and integrity and it seems only to get worse still. E.g. how do you foster innovation in a situation such as this: http://www.telegraph.co.uk/news/worldnews/asia/china/10132391/Riot-after...

It looks like China's government may be trying:

It is not that China's educational system can not produce brilliant students. Ask any European or American top schools, they will be more than happy to receive many China's top young minds every year (Not as the report described). The problem is we are not educated with the most important notion that every western college would emphasize all the way through, critical thinking (Yes, it is true, as far as I experienced). The fact is that the social economical structure in China simply can not accommodate so many college graduates (China is still at the early stages of industrilization and require more assembly line workers than management and service personnel).

The good news is that the authority seems to realize the problem and start to act by inviting western graduates(for quite some time already...) and western colleges into China. Hope they will help us solve some fundamental problems and forward the social reform, instead of another chance for profiteering.

But it will be interesting to see how this balances with not being allowed to question one's government or one's elders.

"year 2049, the country’s 100th birthday", Incorrect, its actually the communist party's coming to power birthday, got there by Mao murdering and raping millions.

"Quality and value" as a huge follower of aliexpress.com dx.com and banggood this is china's big weakness, dodgy quality, no QA and no responsibility. So while good for nuts and bolts to be avoided for big ticket, high tech items, been burnt wont go back but I will continue to buy bolts and minor items by the hundreds.

While parts of Southern USA are being asked to get rid of symbols of the Confederates,China proudly displays statues and paintings of one of the worst mass murders known.
Well done.