​“Made In China 2025” plan aims to move away from low-value manufacturing

China’s Cabinet has published a plan that cites “intelligent manufacturing” as an answer to some of the country’s economic challenges.

Xinhua reports that China’s State Council has announced a ten-year-plan that would “realize industrialization nearly equal to the manufacturing abilities of Germany and Japan at their early stages of industrialization,” according to Miao Wei, minister of industry and information technology.

Areas identified as priorities included promoting innovation, service-oriented manufacturing, internationalising the sector, and encouraging breakthroughs in ten key areas.

These areas were “new information technology, numerical control tools and robotics, aerospace equipment, ocean engineering equipment and high-tech ships, railway equipment, energy saving and new energy vehicles, power equipment, new materials, medicine and medical devices, and agricultural machinery.”

The Wall Street Journal notes that the Chinese government aims to increase research spent in manufacturing from 0.88 per cent (the official 2013 figure) to 1.68 per cent of revenues by 2025.

The blueprint comes as GDP growth eased to 7 per cent, according to figures published in April, with industrial output expanding at 5.6 per cent in 2014 (below expectations of around 7 per cent).

This is significantly slower than recent years. In 2007, for example, in GDP expanded by about 14 per cent.

“The key to creating a new driver of economic growth…lies in the manufacturing sector,” the plan reads.

Challenges to manufacturing identified, and which the plan aims to address, include declining foreign investment – of which only 33 per cent was in manufacturing in 2014, compared to 55 per cent in services – and wage costs, which were up 11.6 per cent in 2014 compared to the previous year.

"Advanced economies such as the United States, Germany and Japan have all formulated policies supporting further development of their own manufacturing,” an unnamed ministry of industry and information technology official told Xinhua.

“At the same time, emerging economies such as India and Brazil are also catching up with their own advantages."

Image: European Pressphoto Agency