Executive Summary

This report assesses the trajectory, achievements, and limitations of Beijing’s “Made in China 2025” (MIC2025) industrial strategy and examines its geopolitical ramifications ten years after its launch.

MIC2025 aimed to upgrade China’s manufacturing sector, reduce dependence on foreign technology, and position Chinese firms as global leaders in key high-tech industries.

While the initiative attracted major advancements in sectors like electric vehicles (EVs), high-speed rail, and shipbuilding, it also produced industrial imbalances, exposed persistent technological dependencies, and exacerbated tensions with major economic powers, particularly the United States and the European Union.

Key Takeaways

• China emerged as a global leader in electric vehicles, shipbuilding, and high-speed rail under MIC2025.
• China remains dependent on foreign technology in semiconductors, advanced manufacturing equipment, and aerospace.
• The United States intensified export restrictions and technology controls in response to MIC2025 ambitions.
• China’s strategic investments in domestic R&D, exemplified by Huawei, underscore a determined push for technological autonomy.

Background Information

In May 2015, China’s State Council introduced MIC2025 as a roadmap to transform China into a world-class industrial power, reducing its dependence on foreign technology and increasing its competitiveness in high-tech industries.

Inspired by Germany’s Industry 4.0 model, MIC2025 identified ten priority sectors, including next-generation IT, robotics, aerospace, ocean engineering, high-end rail, energy-efficient vehicles, power equipment, agricultural machinery, new materials, and biopharmaceutical.

The initiative leaned heavily on industrial planning, central subsidies, and local government implementation. Beijing mobilised state-owned enterprises (SOEs), directed lending from policy banks, and encouraged mergers and acquisitions abroad to absorb advanced technologies.

The strategy emphasised not just innovation, but also production scale, localisation of supply chains, and the creation of “national champions” capable of competing globally.

Geopolitical Scenario

MIC2025 coincided with a broader shift in China’s global role. In 2024, China’s manufacturing value-added reached approximately 29% of the global total, nearly matching the combined output of the United States and the European Union.

In critical sectors like electric vehicles and high-speed rail, Beijing met or surpassed MIC2025 targets. By 2023, China produced over 60% of the world’s EVs, led by companies like BYD, NIO, and SAIC. In shipbuilding, Chinese firms controlled more than 50% of global orders by tonnage. These accomplishments reflect the effectiveness of policy tools used under MIC2025.

However, technological self-reliance, the program’s core ambition, remains incomplete. China continues to rely heavily on imported semiconductors, foreign aviation components, and high-end manufacturing tools. Despite years of targeted investment, the overall self-sufficiency rate for China’s semiconductor industry stood at approximately 13% in 2024, far from Beijing’s goal of 70% self-sufficiency., The C919 aircraft developed by COMAC to rival Boeing and Airbus, still incorporates engines and avionics systems sourced from US and European firms. Similarly, China’s automation systems frequently depend on German, Japanese, and Swiss technologies.

The structural transformation of the Chinese industry has also faced economic headwinds. The annual growth rate of manufacturing value-added declined from 7% in 2015 to 6.1% in 2024, falling short of the original MIC2025 target of 11%. Overcapacity, particularly in sectors receiving massive state support, such as solar panels and EV batteries, has distorted global markets. Countries in Southeast Asia and Latin America have raised concerns over Chinese dumping practices, while the United States and the European Union have launched multiple anti-subsidy and anti-dumping investigations.

The geopolitical fallout has been profound. Washington has responded with a suite of export controls, investment restrictions, and diplomatic pressure. The 2022 CHIPS and Science Act allocated $52 billion to revive US semiconductor manufacturing and research.

At the beginning of 2025, Washington introduced new licensing requirements for AI chips such as Nvidia’s H20 and AMD’s MI308, explicitly targeting exports to China. Nvidia pre-emptively took a $5.5 billion charge, reflecting the significant business risks involved. CEO Jensen Huang travelled to Beijing to engage with Vice Premier He Lifeng, illustrating how industrial policy has become a vector of geopolitical engagement.

Huawei’s resurgence provides a counterpoint. After years of US sanctions, the firm posted a 22% revenue increase in 2024, its strongest since 2016. It committed over 20% of revenue, more than $23 billion , to R&D, more than doubling its investment threshold. This reinvestment strategy signals how Chinese firms are adapting by internalising innovation capacities and realigning their supply chains.

Europe’s approach has been more nuanced but no less critical. The European Union Chamber of Commerce in China, in a landmark 2017 report and in subsequent updates, has voiced consistent concerns over unfair competition, lack of regulatory reciprocity, and forced joint ventures. European companies, particularly in the automotive and pharmaceutical sectors, report pressure to transfer technology in exchange for market access. While some sectors benefited from collaboration, various firms now view the business environment as increasingly politicised and difficult to navigate. European leaders have also grown wary of the “dual circulation” strategy, an evolution of MIC2025. intended to insulate China from external shocks by developing domestic demand and innovation capabilities.

Conclusion

A decade after its unveiling, “Made in China 2025” has left a lasting imprint on global industrial dynamics and geopolitics. It accelerated Beijing’s transition into a technologically sophisticated manufacturing power and reshaped global value chains in key sectors. However, the initiative fell short of achieving full technological autonomy, particularly in semiconductors, aerospace, and advanced manufacturing equipment. The resulting dependency has made China vulnerable to external policy tools, notably from the United States.

At the same time, MIC2025 catalysed a shift in global perceptions of China, from a developing market to a strategic competitor. Its methods, especially the use of subsidies and state support, triggered a wave of countermeasures, including trade restrictions, supply chain diversification efforts, and the reshoring of critical industries. While MIC2025 formally faded from public rhetoric after 2019 because of external criticism, its goals persist under different banners, including “Dual Circulation” and “New Productive Forces.”

Amidst heightened US-China competition and the tariff disputes of the Trump era, the implementation of Made in China 2025 faced increased pressure from the United States and the West, potentially exacerbating market polarisation and influencing Beijing’s foreign policy.

As China doubles down on self-reliance and other powers reinforce defensive economic policies, the global industrial order is likely to remain fragmented and contentious in the years ahead. Understanding also how

*Cover image: map of China (Credits: Designed by Freepik)

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