A recent report by two UN officials analyzed China’s Made in China 2025 strategy and concluded that such a plan will lead the world’s second largest economy into a different road of development and avoid “premature deindustrialization.”
The term “premature deindustrialization” was defined by Harvard University economist Dani Rodrik as meaning that numerous emerging economies become stuck in the middle income trap owing to premature shrinking of the manufacturing industry.
The report, Learning from China’s Industrial Strategy, was written by Richard Kozul-Wright, director of the Division on Globalization and Development Strategies at the United Nations Conference on Trade and Development, and Daniel Poon, economic affairs officer at the United Nations Conference on Trade and Development.
According to the report, Made in China 2025 is a roadmap released by Premier Li Keqiang in 2015 to guide the country’s industrial modernization, a practice that should be learned by other countries.
The success of Made in China 2025 cannot only serve as an example of how to avoid the middle income trap, but also provide valuable lessons for innovation and policy evaluation for other countries, it concluded.
“According to China’s strategy, by 2025, the country should have a set of internationally competitive multinational firms that have made progress in upgrading their positions in global value chains. Moreover, by that date, key Chinese industries should adopt international efficiency standards related to energy and material consumption and pollution. By 2035, China expects its economy to be fully industrialized,” it said.
The concept of Made in China was first put forward by Premier Li in his government work report in 2015. It said that efforts should be made to transform China from a big manufacturing country to a manufacturing power.
“Made in China 2025” then became the buzzword of 2015 and also the key topic of Premier Li’s meetings and activities.
At the State Council executive meeting on May 17, Premier Li again stressed the strategy, saying that smart manufacturing, which is the main objective, should be combined with strategies of Internet Plus and mass entrepreneurship and innovation.
China’s unique advantages should be brought into play and efforts should be made to make Made in China 2025 a new and high-level growth pole of the economy, the Premier said at the meeting.
As a move to transform and upgrade China’s economy, Made in China 2025 is drawing increasingly wide attention from the world.
Made in China 2025 aims to strengthen manufacturing innovation and realize industrial upgrades, which are very important to the competitiveness of Chinese manufacturing industry in the world, according to the Forbes magazine website.
Kozul-Wright and Poon also reviewed industrial and financial policies of Made in China 2025 and said that, “If it succeeds, it will have laid the institutional foundations for new sources of growth. And, as the benefits of innovation are diffused throughout the economy, China will move closer to its goal: becoming a high-income country.”