If China's manufacturing becomes strong, will it stop importing from abroad?

Foreign media have expressed concerns that "Made in China 2025" aims to replace foreign technology with Chinese technology in high-end industries, replace foreign manufacturing with Chinese manufacturing, and enhance the competitiveness of Chinese high-tech enterprises globally.

Why develop core technologies in high-end industries? Is it really to replace foreign technology? In response to these questions, reporters interviewed government officials and industry experts.

It is impossible to replace all foreign manufacturing.

"Some foreign media believe that 'Made in China 2025' is about import substitution, which is a misunderstanding and misinterpretation." Li Beiguang, deputy director of the Planning Department of the Ministry of Industry and Information Technology, stated in an interview with the Economic Daily that China is still a developing country with a great demand for advanced technologies and products. The formulation and implementation of 'Made in China 2025' aims to accelerate the transformation and upgrading of China's industry, and to carry out independent innovation and develop high-end manufacturing to meet the needs of China's economic development, improve people's livelihoods, and ensure national security.

In response to foreign media's claims that "Chinese technology will replace foreign technology," Xu Zhaoyuan, a researcher at the Industrial Economy Research Department of the State Council Development Research Center, analyzed that 'Made in China 2025' mainly emphasizes the development of high-end manufacturing, which aligns with the strategic goals of developed countries like the U.S., Japan, and Germany that focus on high value-added and high-end industries. Therefore, some foreign media claim that China aims to replace foreign manufacturing in high-end industries.

"Foreign media are somewhat overthinking; no country can monopolize or replace all high-tech industries," Xu Zhaoyuan said. From the experience of major developed countries, late-developing countries generally follow the path of industrial upgrading and continuously expanding the proportion of high-end industries, and this process has not significantly impacted the global manufacturing landscape. For example, Japan, South Korea, and Germany did not completely replace U.S. manufacturing during their rise in the manufacturing sector.

In other words, the implementation of 'Made in China 2025' will certainly promote further technological breakthroughs in certain industries, develop China's own high-end technologies, and will create some competition for other countries' high-end industries. However, each country has its own advantageous industries, and it is impossible for any country to completely replace foreign manufacturing.

Since the beginning of this year, several international organizations, including the Mercator Institute for China Studies in Germany, the China-EU Chamber of Commerce, and the American Chamber of Commerce, have published research reports on 'Made in China 2025'. In this regard, Li Beiguang emphasized that the relevant industry market share and other development indicators mentioned in the reports related to 'Made in China 2025' are all drawn from the research reports compiled by the Manufacturing Power Strategy Advisory Committee, which are predictive and mainly serve a guiding role. Moreover, the advisory committee is a research and consulting organization composed of experts, scholars, and corporate executives, and when releasing the roadmap, it has stated that the aforementioned indicators are predictive, non-binding, and not government actions.

Will not bring unfairness.

After the release of 'Made in China 2025', there were claims that China would increase investment in domestic enterprises, bringing unfairness to foreign-funded enterprises. In response, Li Beiguang admitted that for more than two years since the implementation of 'Made in China 2025', the same standards have been applied to both domestic and foreign-funded enterprises, treating them equally. In January 2017, the State Council issued a notice stating that foreign-invested enterprises and domestic enterprises are equally subject to the strategic policies and measures of 'Made in China 2025'.

For example, in the establishment of manufacturing innovation centers, the National Power Battery Innovation Center has jointly built a laboratory with the University of Western Ontario in Canada, and the National Additive Manufacturing Innovation Alliance already has three overseas member units; in intelligent manufacturing, the "Ship Manufacturing Intelligent Workshop Pilot Demonstration" of Nantong COSCO Kawasaki Ship Engineering Co., Ltd. has been listed as a pilot demonstration project for intelligent manufacturing.

Li Beiguang added that the C919 is a model of cooperation between Chinese and foreign enterprises, with its engine, avionics, and flight control systems coming from multiple joint ventures or wholly-owned companies in Europe and the U.S., including suppliers like General Electric and Honeywell, among which there are more than a dozen international companies among the first-tier suppliers, and hundreds of second-tier and third-tier suppliers.

"The view that 'only supports local enterprises and puts pressure on foreign-funded enterprises' is a misunderstanding and misinterpretation, as well as a subjective assumption and deliberate distortion," said Qiao Biao, director of the Planning Research Institute of CCID Consulting. On the surface, this seems to be a concern about China's manufacturing development strategy, but in essence, it is using international discourse hegemony to exert pressure on China's manufacturing development, even provoking dissatisfaction among foreign-funded enterprises and reducing the attractiveness of China's manufacturing development environment. Further analysis shows that the doubts of European and American countries about 'Made in China 2025' mainly stem from concerns that the rise of China's high-end manufacturing will seize international markets.

It should be noted that many high technologies and their products from developed countries are subject to strict restrictions and export embargoes against China. "The issue of core technologies being controlled by others is the crux of why China's manufacturing is large but not strong," Qiao Biao believes. If this problem is not solved, not only will the transformation and upgrading of traditional industries become mere words, but the development of strategic emerging industries will also lack a foundation. The starting point of 'Made in China 2025' is to rely on independent innovation to address our development shortcomings and meet the demands of the continuously upgrading domestic market for products.

Will bring huge business opportunities to both Chinese and foreign markets.

Qiao Biao admitted that any country is willing to improve the quality and level of its equipment, which is beyond dispute. However, improving the quality and level of its equipment behind closed doors, under globalization, is equivalent to building a car behind closed doors, which will not achieve the desired goals.

"China is actively promoting 'Made in China 2025', providing broad market opportunities and cooperation prospects for enterprises from various countries," Li Beiguang stated. After the release of 'Made in China 2025', China has engaged in active exchanges and cooperation with some countries. For example, a cooperation mechanism has been established between 'Made in China 2025' and Germany's 'Industry 4.0', achieving positive results.

However, due to factors such as costs, the advantages and focuses of developed countries in Europe and America still mainly lie in the high-end manufacturing sector. China's manufacturing industry still needs a process to develop from mid-low end to mid-high end. Li Beiguang revealed that in the coming period, China will still maintain a complementary relationship with manufacturing powerhouses like the U.S. and Japan, and the already formed global industrial division of labor and competitive landscape is unlikely to undergo disruptive changes in the short term.

It is certain that as China improves its own level in pursuing product quality and equipment upgrades, it will inevitably promote the expansion of the world market. Qiao Biao analyzed that on one hand, the implementation of 'Made in China 2025' will bring huge market opportunities to both Chinese and foreign enterprises. Chinese enterprises must improve the quality of product manufacturing, which requires enhancing process levels and equipment levels. In this improvement process, cooperation with developed countries is necessary, and more foreign equipment manufacturing products and technologies will enter the Chinese market.

On the other hand, with the implementation of 'Made in China 2025', more Chinese and foreign enterprises will strengthen cooperation in the field of equipment technology. China is the world's largest consumer market and the largest market for advanced technology applications. For foreign equipment to enter the Chinese market, products must be localized. For example, General Motors in the U.S. now occupies 17% of the market share in China because it has adapted its products to China's road conditions, climate, and other factors, which has led to continuous market share expansion.

Li Beiguang stated that the release and implementation of 'Made in China 2025' is by no means about "not buying foreign products" or "replacing foreign manufacturing." On the contrary, in the process of promoting 'Made in China 2025', China will always adhere to the concept of open development and win-win cooperation, and will cooperate with more foreign enterprises to create a good environment for practical cooperation between enterprises. (Reporter: Ji Leilei)