Industry strategy pays off

Updated 2017-06-13 09:33:46 Global Times

'Made in China 2025' sees improvement in innovation

Chinese manufacturing will continue to focus on information and new material upgrades as the country has seen improvements in innovation and basic manufacturing capabilities since the implementation of the "Made in China 2025" initiative two years ago.

"The implementation of 'Made in China 2025' has achieved initial results, and played an important role in stabilizing industrial growth and speeding up the transformation of the manufacturing industry," Luo Wen, director of the planning department at the Ministry of Industry and Information Technology (MIIT), said in a recent interview with the Economic Times.

Luo said that the plan has been completed. Pushing forward the "Made in China 2025" requires giving priority to the information and new material industries, Luo said.

He added that the new information industry should focus on software, integrated circuits, artificial intelligence and intelligent hardware, while the new material industry should make breakthroughs in advanced basic materials like steel.

China's State Council unveiled a national plan, dubbed "Made in China 2025," in May 2015, which promotes the country's manufacturing industry. The plan focuses on five key projects, including smart manufacturing, and 10 fields, which include information technology, aerospace technology, ocean engineering equipment and rail equipment.

Since implementing the strategy in 2015, the country has seen a steady improvement in industrial capabilities, smart manufacturing, innovation, and product quality and branding, Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Monday, adding that certain industries, such as aerospace technology and rail equipment, have achieved global recognition.

China's first homegrown large passenger aircraft, the C919, successfully completed its maiden flight in May in Shanghai. This is a crucial step in making its manufacturer, Commercial Aircraft Corporation of China (COMAC), a major player in the industry together with Airbus and Boeing, the Xinhua News Agency reported.

Chinese rail equipment manufacturer CRRC Tangshan said in May that it has delivered all 95 subway cars to the Turkish port city of Izmir.

The company said that these trains are equipped with six-axis hinge joints that ensure smooth changes in direction.

The 19 subway trains were designed for Izmir's metro transit service. The first shipment of 55 carriages has been put into use in the city.

China has increased its investment in research and development, and the number of patents issued in the past two years is growing, Xin Guobin, deputy head of the MIIT, told the newspaper, adding that China's infrastructure capabilities have also greatly improved.

A report titled "Learning from China's Industrial Strategy" said that "Made in China 2025" not only serves as an example of how to avoid the middle income trap but also provides valuable lessons for innovation and policy evaluation for other countries, the State Council said on its website on Monday.

Encouraging foreign participation

Following the plan's implementation, some foreign governments and media expressed skepticism, claiming unfair competition because Chinese firms enjoy government subsidies.

The European Union Chamber of Commerce in China released a report in March called "China Manufacturing 2025: Putting Industrial Policy Ahead of Market Forces" which criticized government subsidies to high-tech industries in China, noting that it will lead to unfair competition between Chinese and foreign firms.

"Instead of giving direct financial support to certain industries, today's government support comes in the form of setting up platforms, creating a friendly environment, building industrial parks and related infrastructure. And favorable policies are given to firms, but these are under the WTO framework," Bai said, adding that China also welcomes the participation of foreign firms in the Chinese market as they can boost benign competition.

The State Council issued a document in January which encourages foreign-funded companies to invest in high-end, smart and green manufacturing, participate in infrastructure work in energy, water conservation and environmental protection, according to the State Council's website.

It added that China will support foreign companies which set up research and development centers and strengthen cooperation with domestic counterparts, and will allow them to join national science and technology programs.

However, China still has a long way to go before matching developed countries in advanced technologies, experts said, noting that China's high-tech industries still rely heavily on foreign technology.

However, some developed countries have put restrictions on technology exports, equipment and products to China, Xin said, noting that the takeover of foreign firms by Chinese companies depends on market forces.

Xu Hongcai, deputy chief economist at the China Center for International Economic Exchange, said that companies are the key to developing high technology, and the government can only guide and support them "because money alone cannot acquire core technologies," Xu said.

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