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Competitiveness
10 years on: Was Trump wrong about ‘Made in China 2025’ all along?
How China’s journey of self-reliance, innovation, and strategic resilience under “Made in China 2025” continues to redefine its global role amid ongoing geopolitical tensions and renewed policy challenges.
In 2018, the Trump administration leveled tariffs on Chinese goods to curb what it called “China’s overreach” in global trade. Critics predicted that these measures would limit China’s technological ambitions. Fast forward to 2025, China has defied expectations with milestones like a 50% penetration rate for New Energy Vehicles (NEVs) and the launch of DeepSeek, China’s answer to OpenAI’s ChatGPT. These accomplishments underscore a decade-long transformation under the “Made in China 2025” initiative, marking a journey of resilience, innovation, and self-reliance.
The initiative’s ambitious targets covered 10 key industries, including robotics, aerospace, and biopharmaceuticals, aiming for 70% domestic production of core components by 2025.
Revisiting MIC2025: From skepticism to success
Launched in 2015, “Made in China 2025” (MIC2025) is a decade-long plan designed to transition China’s manufacturing sector from low-cost production to a hub of innovation, quality, and technological leadership. Despite the country’s dominance in manufacturing output – surpassing the US in 2010 and maintaining the lead for five consecutive years – China had historically occupied the lower echelons of the global value chain, characterized by cost competitiveness rather than technological sophistication. In high-tech and advanced manufacturing, the gap between China and developed nations was particularly pronounced.
Recognizing this disparity, the Chinese State Council unveiled the MIC2025 initiative in August 2015. The initiative’s ambitious targets covered 10 key industries, including robotics, aerospace, and biopharmaceuticals, aiming for 70% domestic production of core components by 2025. Beyond self-reliance, MIC2025 sought to bolster innovation, enhance labor productivity, and promote sustainable green development, positioning China as a leader in the global manufacturing landscape.
Upon introduction, MIC2025 was initially perceived as a threat and met with skepticism by Western analysts who deemed it overly ambitious. Over time, skeptics began referring to it as a failed or ineffective strategy. Yet, in 2024, the South China Morning Post reported that China has met or exceeded over 86% of the 200+ objectives outlined in the initiative’s 10 key areas, with some targets significantly surpassing expectations.
“New Energy Vehicles (NEVs) and renewable energy surged, with NEVs surpassing a 50% penetration rate in China by 2024. In wind and solar power, key players like Goldwind, LONGi, and JinkoSolar have emerged as global leaders.”
MIC2025 milestones and accelerating self-reliance
The achievements in some of these key sectors highlight the systemic transformation of China into a powerhouse of manufacturing innovation.
- Robotics: Domestic industrial robots captured over 52% of the market, with leadership in collaborative and SCARA robots, a type of industrial robot widely used in assembly, material handling, and packaging applications.
- Rail transportation: China’s railway technologies have reached world-leading levels in high-speed, plateau, heavy-haul, and cold-region railways. Notably, all 13 system-level international standards for high-speed rail established by the International Union of Railways were led by China. Additionally, the export of high-speed rail technologies, including a major project in Indonesia, has strengthened China’s global reputation.
- Medical devices: Since 2014, China has approved 217 innovative medical devices, reducing reliance on imports – including brain pacemakers, a device that prevents or reduces the severity of seizures, 5.0T MRI systems, and third-generation artificial hearts. Additionally, China boasts 79 “lighthouse factories”, including those of Bosch, Siemens, and Unilever. These are manufacturers that show leadership in using Fourth Industrial Revolution technologies recognized by the World Economic Forum, accounting for 41.8% of the global total.
External pressures including tariffs, export bans, and trade policies were originally intended to slow China’s technological rise. Key among these was the Trump administration’s focus on curbing firms like Huawei and SMIC, which created urgency for self-reliance and innovation. In response, China doubled down on domestic innovation to develop its capabilities across critical sectors.
- Semiconductors: Huawei’s HiSilicon designed the Kirin series of chips, which became a flagship product in the mobile processor market, demonstrating China’s ability to compete in global chip design. Similarly, HiSilicon’s Ascend series of AI processors has become central to China’s drive for self-reliance in artificial intelligence and high-performance computing.
- Green tech: New Energy Vehicles (NEVs) and renewable energy surged, with NEVs surpassing a 50% penetration rate in China by 2024. In wind and solar power, key players like Goldwind, LONGi, and JinkoSolar have emerged as global leaders. China is the only country capable of independently developing and commercially operating ultra-high voltage (UHV) transmission equipment and technology.
- New materials: From January to November 2024, the output of China’s new materials industry grew by over 10% year-on-year, with an estimated annual value exceeding 8tn RMB. Breakthroughs in high-temperature superconductors and perovskite solar cell materials highlight China’s innovation in this field.
From made in China to innovated in China
Foreign companies are also increasingly leaning on the Chinese innovations that have resulted from the MIC2025 objectives, fostering a globally interconnected ecosystem of co-innovation. One notable example is Toyota and BYD’s partnership, which is focused on researching and developing battery electric vehicles, combining BYD’s strengths in EV development and competitiveness with Toyota’s quality and safety technology. This has resulted in the launch of vehicles like the Toyota b23 EV in China, which utilizes BYD’s battery technology, underscoring how global automakers are benefiting from domestic expertise in China to strengthen their product offerings. Similarly, FUCHS, a global leader in lubricants, has leveraged China’s innovation ecosystem as part of its global strategy. By fostering cross-functional collaboration and empowering local teams to drive product innovation, FUCHS has successfully tapped into Chinese market insights and expertise, driving global competitiveness and enhancing their agility in a fragmented world.
The pharmaceutical industry also stands as a testament to the deepening collaboration between global enterprises and Chinese innovation under MIC2025. While Western pharma giants have invested in local R&D and decades, they are now actively pursuing the licensing of drugs created by Chinese biotech firms. In just a few years, the number of pharmaceutical transactions worth over $50m involving China jumped from 0% in 2019 to 31% in 2024. This trend is underscored by high-profile collaborations like Merck’s $3.3bn cancer drug deal with China-based LaNova, and AstraZeneca’s acquisition of Gracell Biotechnologies for up to $1.2bn, marking the first acquisition of a Chinese life sciences company by an overseas multinational. These symbiotic relationships exemplify the objectives of MIC2025, fostering an environment where international collaboration and domestic innovation drive mutual growth and industry leadership.
DeepSeek’s development is emblematic of China’s broader advancements in AI, aligned with MIC2025’s focus on next-generation IT.
DeepSeek: Redefining global AI leadership
DeepSeek, China’s answer to OpenAI’s ChatGPT shocked global tech circles with its rapid deployment, seemingly emerging against the odds in a constrained AI landscape shaped by restrictions and geopolitical tensions. More than a technological breakthrough, it is a testament to China’s ability to foster bold innovation, even from relatively young startups, highlighting the ingenuity and problem-solving mindset that enables Chinese tech firms to navigate challenges and push the boundaries of AI.
DeepSeek’s development is emblematic of China’s broader advancements in AI, aligned with MIC2025’s focus on next-generation IT. It reflects progress in industrial automation, natural language processing, and AI-driven medical diagnostics. Companies like Baidu, Alibaba, and Tencent have each advanced China’s AI ecosystems in distinct ways – Baidu in autonomous driving, Alibaba with AI-driven healthcare and new large language model Qwen, and Tencent with medical AI solutions – underlining the diversification of China’s AI efforts.
The implications of DeepSeek extend globally. Domestically, such advancements are transforming industries from e-commerce to manufacturing. Internationally, they challenge existing paradigms of AI leadership, positioning China as not just a competitor but a potential standard-setter in emerging technologies.
While China has made substantial strides in robotics, industrial automation, and aerospace, the country remains highly dependent on imported high-end machine tools to meet the demand for advanced technology and specialized equipment.
Persistent challenges and unfinished agendas
Despite the significant achievements and innovations across various industries, critical challenges remain in key areas. One of the biggest hurdles lies in semiconductors, a sector that remains a chokepoint for China. Despite heavy investment in domestic chip manufacturing, China still lags behind global leaders like TSMC and Intel in the production of 5nm and 3nm chips. US export restrictions on advanced semiconductor equipment have further slowed China’s progress, forcing companies like Huawei to develop workarounds that, while impressive, still fall short of top-tier international standards.
The high-end manufacturing gap is another key obstacle. While China has made substantial strides in robotics, industrial automation, and aerospace, the country remains highly dependent on imported high-end machine tools to meet the demand for advanced technology and specialized equipment. Key industries, including aviation and medical technology, rely on foreign suppliers for specialized equipment, which presents challenges to achieving full self-sufficiency in critical sectors.
China’s green energy ambitions also face scalability challenges. The country is the world’s biggest producer of renewable energy, leading in the production of solar panels, wind power, and battery technology, but also the world’s biggest carbon emitter relying heavily on coal-fired power plants to meet its growing energy demands. According to data released by China’s National Energy Administration, while thermal power accounted for only 12.62% of newly installed capacity in 2024, its absolute installed capacity has remained at a relatively high level in recent years. This duality poses a significant challenge to China’s long-term energy transition and sustainability goals.
It stands as a testament to China’s resilience and strategic foresight, driving a profound transformation in its manufacturing sector through innovation, self-reliance, and sustainability.
A long term vision for global leadership
The Made in China 2025 initiative represents more than a policy framework; it embodies the long-term strategic vision to position China as a global leader in manufacturing. With intentionally ambitious targets, the initiative aims to push the boundaries of innovation and industrial capabilities. Even partial success in achieving these goals would mark a significant milestone for any nation, and China’s progress to date underscores its commitment to this transformative agenda. However, these achievements are not the culmination of this vision but rather the foundation for the next phase of development, extending to 2035 and beyond.
The initiative’s impact transcends national borders, advancing global progress in high-speed rail, renewable energy, and solar power. As China continues its journey toward becoming a global manufacturing powerhouse, its contributions to sustainable development and technological innovation will shape the global economy, offering opportunities for collaboration and shared growth.
It stands as a testament to China’s resilience and strategic foresight, driving a profound transformation in its manufacturing sector through innovation, self-reliance, and sustainability. While challenges remain, the progress achieved so far highlights the ingenuity and entrepreneurial DNA of Chinese companies and suggests a new phase of global competition. For business leaders and executives, the imperative is clear – to engage with China’s innovation engine and leverage opportunities for collaboration and growth in China’s burgeoning industrial ecosystem.
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