Made in China 2025 – Increasing Risks

China’s plan to transform its economy by building its own high-tech capacity and creating national champions holds both opportunities and risks for many Western companies. As Chinese industry moves up the value chain, Chinese companies try to buy or collaborate with high-quality machinery, equipment and services that can support their own transformation with relevant expertise, technology and products. These include manufacturers with experience in process innovation, production efficiency, productivity improvement and integration of new technologies into product development and manufacturing processes.

Made in China 2025 also entails completely new and increasing risks for many foreign manufacturers operating in China or in China business. The strategy envisages leading China’s industry to world leadership in ten selected areas, localizing procurement and developing the People’s Republic into a leading international location for research and innovation. The most lucrative segments of the value chain are no longer to remain in foreign hands; foreign companies are to be gradually replaced by 2025. It is now crucial for Western companies to stay in business with and in China. They must develop valid scenarios on the basis of reliable information, adapt their strategies and protect their intellectual property and know-how.

Picture: Zane Lee on Unsplash

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