Made in China 2025 (or MIC 2025) is China’s strategic plan for economic development. According to a December 2018 China Briefing article, the plan has several specific objectives. One of these objectives is to raise the material content of finished goods produced in China from 40% to 70%. Another objective limits foreign control of its technology industry. Another requires foreign firms to give up much of their proprietary technology as the price of entry into Chinese markets. All this is intended to ensure China’s already heavily subsidized and government-owned industries are self-sufficient by 2025, and then prepared to gain greater footholds in world markets.
MIC 2015 has attracted a lot of negative attention from other countries. It inhibits foreign participation in China’s industrial supply chains and gives Chinese firms an unfair advantage at home. MIC 2015 partly fueled the US decision to embark on a trade war with China.
It is worth noting, however, that this “reshoring” (bringing production back home from overseas) is part of a broader trend occurring around the globe. The Trump Administration made bringing jobs back to America a central piece of its platform. It even introduced tariffs on foreign imports to force a similar form of reshoring. Europe too has been moving production closer to its consumers, particularly in the automotive, electronics, and computer industries. According the McKinsey report cited in a previous article, regional trade increased 2.7% between 2013 and 2018, particularly in industries with complex products, requiring lots of suppliers and just-in-time delivery. As automation continues to develop and become more available, even developing countries, whose primary advantage has been low-cost labor, have been advised to embrace enough technology to become attractive partners for their more advanced-economy neighbors, offering them a “near-shoring” option (e.g., Mexico with the US instead of India).
All of this suggests that regionalism is not going away—rather it is taking hold.