China Economic Bulletin | No. 23 (22 January 2025) 

“Made in China 2025” Today – A Reflective Review

Author: Dennis Trescher

“The world’s factory” is a term that has been a long-standing phrase to colloquially refer to the People’s Republic of China in western countries. Having been the world’s top manufacturing country for roughly 15 years, estimated to have overtaken the United States in 2010 (Perry 2012), products originating from China can currently be found around the globe.

Nevertheless, while the term “made in China” is frequently understood as signifying towards the vast reach of the quantity of Chinese products, it is rarely ever utilized in association with proof of quality or value. To combat this, the Chinese government created the “Made in China 2025” program (MIC 2025) in 2015.

MIC 2025 was brought into being by China’s Ministry of Industry and Information Technology as part of a larger “three step” strategy, similarly designating the years 2035 and 2049 as key milestone time frames (Nair 2022; Cyrill 2018). MIC 2025 specified the ambition of elevating the status quo of manufacturing outputs into increasingly high-end and technologically advanced segments by 2025 of nine key sectors. The introduction of the program has since resulted in a large variety of projects and expenses, such as the inauguration of a large amount of “pilot cities”, which aim to focus their economic output on MIC 2025 designated industries. Additionally, financing is to a great deal left to the state-owned banks. While the exact amounts invested till date are difficult to define, estimates can be derived amongst others from official bank statements such as the China Development Bank’s pledge in 2016 to invest 300 billion Renminbi over a five-year duration into the MIC 2025 project. An estimate from 2018 reported the aggregate amount of around 1,800 investment funds to result in an approximate conglomerate amount of 3 trillion Renminbi (Zenglein/Holzmann 2019).

The project has since ignited international controversies, amongst others due to the inclusion of aspects such as state supported gain of know-how, while at the same time setting fixed ratios to which products’ core components had to be “made in China” and limiting the Chinese technology market towards foreign companies. While striving towards the goal of Chinese self-sufficiency, efforts would ultimately lead to the formation of an unequal playing field.

As expected, Chinas’ political stance on economic expansionism encompassing projects such as the MIC 2025 led to international political tensions, resulting amongst others in the still ongoing trade war with the U.S. in 2018 (Amighini 2018). While the respective governments did finally come to reach a truce in January 2020 known as the “phase one agreement”, the Biden administration, which had taken office in the same year, had not shown any remarkable interest in lowering American tariffs on Chinese products introduced in the previous administration (Lobosco 2024; Bown 2022).

A similar trend of changing sentiments towards Chinese imports can be found in EU countries and the United Kingdom. While the percentual import numbers still show a measured increase in total import shares of Chinese goods, the general trend in the past few years, with an exception for the latter half of the pandemic, has been a gradual decline in growth rates. To which extent this can be attributed to geopolitical influences and not to market saturation, however, is not made clear (Fathom Consulting 2025).

Partially due to the international backlash, China has since greatly dimmed all publicity on the former prestige project MIC 2025, with government statements similarly rowing back on the subject of the originally envisioned Chinese company-led market domination and instead encouraging increased foreign investments (Cyrill 2018). Nevertheless, the primordial intention of bringing Chinas’ economy to new heights continues even outside of the spotlight and seems to be bearing fruit. A study by Fathom Consulting sees China currently leading globally in market shares in four out of the nine designated market sectors, with further three market sectors situating China amongst the top three (as of 2023). On the other hand, however, the same study found that the leading market positions were usually based on larger manufacturing amounts and only to a limited extent on increased technological specialization (as of 2023) (Fathom Consulting 2025).

Conclusively, with MIC 2025 reaching its 10th anniversary and designated D-Day this year, it can be said that the program, or at least the general political economic stance, seems to have impacted the Chinese economy according to its original sentiment. While it must be stated that MIC 2025 could not have foreseen the impacts of the pandemic or directly predetermined the outcome of the Chinese–American trade war, the originally planned economic transition seems to have progressed as intended despite these complications along the way.

The creation of necessary infrastructure and incentivization of entering the high-tech sector has rendered a new wave of entries into the technologies-based market, as can be proven by the current leading market shares position of China in multiple key MIC 2025 designated industries. Nevertheless, it can be argued as well that the lack of specialization in many of the leading sectors could suggest that the incentivization of market entering could have led to a reduced urge to invest in research and development to produce cutting-edge innovation, as it would limit alternative investment options and reduce profits in the short run.

Furthermore, Chinas current economy faces the challenge of the domestic population having an extremely low propensity to consume and invest since the pandemic, with increased households saving money due to the ongoing economic slump (Tewari 2025). Even so, China had reported reaching its set goals for 2024 of five percent growth, which could be greatly attributed to a positive influx of exported technological products at the end of the year. Some experts argue that this influx in exports may well be related to the worry of newly imposed tariffs of the Trump administration beginning 2025 (Hawkins 2025). However, this increase in technological exports, such as electric vehicles and industrial robots, has now in return limited the Chinese playing field in foreign markets. Due to the exorbitant amounts of Chinese exports, the U.S., Canada and the EU have now imposed further tariffs on Chinese goods in a protectionist effort to relieve pressure on domestic businesses and labor markets, with other markets around the globe potentially not offering a sufficient demand to cover the supply (Tewari 2025).

Now having sufficient supply, yet only limited expertise and innovation in the high-tech sectors, with only limited demand from the domestic and the foreign market, the Chinese government will, despite having more or less successfully implemented MIC 2025, have to reconsider their strategy on what to incentivize in the domestic market and their position in the global marketplace.

References

• Amighini, Alessia (2018): “What the MIC 2025 Means for the Chinese Economy”, Italian Institute for International Political Studies (ISPI), 3 August (online at https://www.ispionline.it/en/publication/what-mic-2025-means-chinese-economy-21108, last visited on 22 January 2025).
• Bown, Chad P. (2022): “Four years into the trade war, are the US and China decoupling?”, Peterson Institute for International Economics (PIIE), 20 October (online at https://www.piie.com/blogs/realtime-economics/2022/four-years-trade-war-are-us-and-china-decoupling, last visited on 22 January 2025).
• Cyrill, Melissa (2018): “What is Made in China 2025 and Why Has it Made the World So Nervous?”, China Briefing, 28 December (online at https://www.china-briefing.com/news/made-in-china-2025-explained/, last visited on 22 January 2025).
• Fathom Consulting (2025): “News in Charts: Has ‘Made in China 2025’ achieved its aim?”, LSEG, 10 January (online at https://lipperalpha.refinitiv.com/2025/01/news-in-charts-has-made-in-china-2025-achieved-its-aim/, last visited on 22 January 2025).
• Hawkins, Amy (2025): “From GDP to trade, how well equipped is China’s economy for Trump 2.0?”, The Guardian, 19 January (online at https://www.theguardian.com/us-news/2025/jan/19/gdp-trade-china-economy-trump, last visited on 22 January 2025).
• Lobosco, Katie (2024): “Trump wants more tariffs. His earlier trade wars cost Americans $230 billion to date”, CNN Politics, 18 March 18 (online at https://edition.cnn.com/2024/03/18/politics/donald-trump-tariffs-trade-war/index.html, last visited on 22 January 2025).
• Nair, Siddhant (2022): “Made in China 2025: China's Quest for Self-Reliance and Market Dominance”, Organisation for Research on China and Asia (ORCA), 30 August (online at https://orcasia.org/made-in-china-2025, last visited on 22 January 2025).
• Perry, Mark J. (2012): “Chart of the Day: China Is Now World’s No. 1 Manufacturer”, American Enterprise Institute (AEI), 12 December (online at https://www.aei.org/carpe-diem/chart-of-the-day-china-is-now-worlds-no-1-manufacturer/, last visited on 22 January 2025).
• Tewari, Suranjana (2025): “Three reasons Trump tariffs aren't China's only problem”, BBC online, 17 January (online at https://www.bbc.com/news/articles/ceq9lxlg811o, last visited on 22 January 2025).
• Zenglein, Max J.; Holzmann, Anna (2019): “Evolving Made in China 2025: China’s industrial policy in the quest for global tech leadership”, Mercator Institute for China Studies (MERICS), 2 July (online at https://merics.org/en/report/evolving-made-china-2025, last visited 22 January 2025).