The trigger of US-China trade war
On the same day that the Trump administration announced $60 billion in tariffs against China, the Office of the United States Trade Representative (USTR) dropped the results of its Section 301 investigation into China’s unfair trade practices. The nearly 200-page report presents a searing indictment of China’s disregard for intellectual property, discrimination against foreign firms, and use of preferential industrial policies to unfairly bolster Chinese firms.
Interestingly, the report singles out one Chinese government initiative, in particular, as a prime example of Beijing’s egregious behaviour: Made in China 2025.
Made in China 2025, originally approved by China’s State Council in 2015, is mentioned or cited an astounding hundred and sixteen times. The strategy aims to guide the country’s industrial modernisation, including the substitution of foreign technology with innovation developed on the mainland China.
This strategy, known as the Chinese version of the Fourth Industrial Revolution, had initially raised concerns in the United States and European Union because of the mainland’s goal to wean itself off importing a range of technologies from leading foreign suppliers.
And for good reason. Beijing’s grand plan to upgrade its manufacturing base has riled governments around the world, confirming their suspicion that China is not looking for a ‘win-win’ in trade relations as its overseas emissaries often insist. In the saga of the U.S.-China economic rivalry, Made in China 2025 is shaping up to be the central villain, the real existential threat to U.S. technological leadership.
What is Made in China 2025?
Made in China 2025 is a blueprint for Beijing’s plan to transform the country into a hi-tech powerhouse that dominates advanced industries like robotics, advanced information technology, aviation, and new energy vehicles.
The ambition makes sense within the context of China’s development trajectory: countries typically aim to transition away from labour-intensive industries and climb the value-added chain as wages rise, lest they fall into the so-called “middle-income trap.”
Chinese policymakers have diligently studied the German concept “Industry 4.0,” which shows how advanced technology like wireless sensors and robotics, when combined with the internet, can yield significant gains in productivity, efficiency, and precision.
How is China implementing the plan?
The Chinese government is investing vast resources, including subsidies, loans and bonds, to support domestic hi-tech enterprises and encourage more Chinese firms to expand overseas and acquire foreign firms with cutting-edge technologies.
The total “Made in China 2025” is likely to exceed US$1.5 billion. Besides central government funding, Chinese local authorities have committed more than US$1.6 billion between 2016 and 2020.
What has China achieved so far?
Initial positive results include advances in large aircraft manufacturing, semiconductor technologies, new material, aircraft engine and gas turbine, 5G mobile network equipment and new energy vehicles, according to Miao Wei, the Minister of Industry and Information Technology.
The government has also established five national manufacturing innovation centres and 48 provincial manufacturing innovation centres. China aims to set up around 40 national manufacturing innovation centres by 2025.
What does Made in China 2025 means to New Zealand?
The market perspective. As a world factory, The Made in China 2025 is not related to Chinese technology companies, it related to upper and lower design and manufacture chains and many more technology partners. Although Made in China is driven China to move to the upper level of the manufacturing chain and make technology competition more fierce, the cooperation will be always the way to survive in the future.
The rapid update and revolution of information technology will bound countries together. The technology and innovation is the currency in the future.
One belt one road initiative plan will connect Asia and Europe, which provided a big market for New Zealand technology compies. New Zealand companies could use this networks to marketing the products and technologies to the OBOR countries, which include Chinese markets.
Although many companies have concerned about the copyright issues, the Chinese government already make a large effort to protect the copyright of private companies. But due to lack of Chinese law and policies knowledge, many companies lose by not protect their IP in the right way.
The highlighted industries for cooperation.
The top 10 areas mentioned in Made in China 2025 are the areas and problems most countries need to solve together. Such as environment protection, cybersecurity, the new generation of transportation, new energy, artificial intelligence.
1) Next-generation information technology, including cybersecurity. 2) High-end numerical control tools and robotics, with greater manufacturing efficiency as labour costs rise. 3) Aerospace equipment, outer space exploration. 4) Ocean engineering equipment and hi-tech ships. 5) Advanced railway equipment.
6) Energy-saving and new energy vehicles. 7) Power equipment, implementation of clean power. 8) Agricultural machinery. 9) New materials, which include materials like graphene and nanomaterials. 10) Biomedicine and high-performance medical devices.
New Zealand could develop own cutting-edge technology in these areas and sell the service and products to other countries. The highlight areas could also include environmental protection, agricultural technology, and biomedicine.