Where ‘Made in China 2025’ missed the goal

Beijing-China missed several important goals of his 10-year plan to become self-sufficient in technology, while promoting unhealthy industrial competition that deteriorated worldwide trading tensions, said the European Chamber of Commerce in China, said In a report this week.

When Beijing are “free”Made in China 2025“Plan in 2015 it was received considerably international criticism For promoting Chinese companies at the expense of their foreign counterparts. The country then triggered the initiative, but has doubled in domestic technical development, given us limitations in recent years.

Since releasing the plan, China has surpassed its objectives on achieving domestic dominance in cars, but the country has not reached its goals in space travel, high-end robots and the growth rate of the production of added value, said the business chamber, with reference to its research and discussions with members. Of the ten strategic sectors identified in the report, China only reached technological dominance in shipbuilding, high-speed rail and electric cars.

The goals of China are generally seen as a direction instead of an actual figure that must be achieved on a specific date. The Made in China 2025 Plan sketches the first ten years of what the country called a ‘multi-decade strategy’ to become a global production power patient.

The Chamber pointed out that the self -developed plane of China, the C919, is still highly dependent on American and European parts and although the industrial automation levels “have increased considerably”, it is mainly due to foreign technology. In addition, the growth rate of the production value reached 6.1% in 2024, fell from the 7% percentage in 2015 and slightly more than halfway through the goal of 11%.

“Everyone must consider themselves happy that China has missed the purpose of production growth,” Jens Eskelund, chairman of the Chamber of Commerce of the European Union in China, told reporters on Tuesday, because the opposite would have worsened the pressure on global competitors. “They have not achieved their own target, but I actually think they did amazingly well. “

Even at that slower pace, China has transformed itself over the past decade to stimulate 29% of the global production value – almost the same as the US and Europe together, Eskelund said. “Before 2015, in many, many categories China was not a direct competitor of Europe and the United States. “

In recent years, the US has tried to limit the access from China to high-end technology and to encourage advanced production companies to build factories in America.

Earlier this week, the US published exporting licensees for the American chip maker Nvidia’s H20 and AMDs MI308 Artificial intelligence chips, as well as their equivalents, to China. Before that, Nvidia said it would cost a quarterly statement of around $ 5.5 billion as a result of the new exporting license requirements. The CEO of the chip maker Jensen Huang met the Chinese Vice Prime Minister he Lifeng in Beijing According to Chinese state media on Thursday.

The American limitations “encouraged us to make things that we had previously not thought we had to buy,” said Lionel M. Ni, who founded President of the Guangzhou -Campus of the Hong Kong University of Science and Technology. According to a CNBC translation of its mandarin language remarks to reporters on Wednesday, that is.

Ni said that the products that require their own powerful development efforts include chips and equipment, and if replacements for limited items were not immediately available, the university would buy the second best available version.

In addition to thematic plans, China issues national development priorities every five years. The current 14th five -year plan emphasizes the support for the digital economy and closes in December. The subsequent 15th five -year plan is planned to be released next year.

It remains unclear to what extent China can become completely self -sufficient in important technological systems in the short term. But local companies have made rapid progress.

At the end of 2023, the Chinese telecommunications giant Huawei released a smartphone that reportedly contained an advanced chip that was able to be able to reach 5G speeds. The company has been on an American black list since 2019 and last year released its own operating system that is said to be completely separate from Google’s Android.

“Western chip-export checks have had some success in the fact that they briefly put back China’s development efforts in semiconductors, albeit at some costs for the United States and Allied companies,” said analysts of the Washington, DC, based think tank center for strategic and international studies, said In a report this week. However, they noted that China has only doubled, “possibly the destabilization of the American semiconductor ecosystem.”

For example, the Thinktank has noted that the current generation of Smartphone from Huawei, the Pura 70 series, contains 33 China-Sourced components and only 5 from outside China.

In 2024, Huawei reported an increase in the turnover of 22% – the fastest growth since 2016 – stimulated by a recovery in the cases of consumer products. The company spent 20.8% of its turnover About research and development last year, well above the annual goal of more than 10%.

In general, Chinese manufacturers achieved the national objective of 1.68% for expenses for research and development as a percentage of operational income, according to the EU room report.

“Europe has to take a good look at itself,” Eskelund said, referring to the High R&D expenditure of Huawei. “Do European companies do what is needed to stay at the intersection of technology?”

Dutch semiconductor equipment company ASML spent 15.2% of his net turnover in 2024 on R&D, while Nvidia’s ratio was 14.2%.

However, high expenses do not necessarily mean efficiency.

The electric car race in particular has led to a price war, in which most car manufacturers cause losses in their attempt to undermine competitors. The phenomenon is often called “Neijuan” or “Invention” in China.

“We also have to realize [China’s] Success did not come without any problems, “Eskelund said.” We see in many industries that it has not translated into healthy things. “

He added that the attempt to achieve “Made in China 2025” objectives has contributed to involvement, and pointed out that China’s efforts to increase the production value chain from Christmas decorations to high-end equipment have also increased the worldwide concerns about safety risks.

In an annual government report delivered in March, Chinese Prime Minister Li Qiang called for efforts to stop the involvementecho A directive from a politburo meeting at a high level In July last year. The Politburo is the second highest circle of power in the ruling Chinese Communist Party.

Such fierce competition worsens the impact of the already delayed economic growth. Of the 2,825 on mainland China, 20% reported a loss for the first time in 2024, according to a CNBC analysis of wind information data from Thursday. Including companies that reported another year of losses, the share of companies that lost money last year increased to almost 48%, the analysis showed.

China emphasized in March that stimulating consumption is the priority for the year, after previously focused on production. The growth of retail sales has been left on industrial production since the beginning of 2024, according to official data that is accessible through wind information.

Policy makers are also looking for ways to ensure “a better match between production output and what the domestic market can absorb,” Eskelund said, adding that the efforts to stimulate consumption is not as important if the production output grows even faster.

But the demand for policy that the overcapacity of production could tackle, he said, “We are also eagerly waiting in anticipation.”