In 2015, China developed a strategic program called “Made in China 2025”. The goal was to achieve technological leadership in ten key areas (aerospace industry, robotics, electric vehicles, and others) and become an independent manufacturing nation.
Ten years have passed, but the results are not fully evident. While the plan has not been fully realized, it has initiated a transformation in Chinese industry: the global trading system has changed, geopolitical tensions have intensified, and a new arena of competition against Western economic dominance has opened up.
Unfulfilled goals – and unexpected achievements
According to a report by the European Chamber of Commerce and Industry, China has not achieved full independence in high-tech sectors, such as the C919 aircraft and advanced robotics. The core technologies are still being imported from abroad.
Nevertheless, the report acknowledges China’s remarkable achievements in some areas. The country has become a world leader in shipbuilding, high-speed rail, and electric vehicles – sectors that were part of the initial plan. Furthermore, China has surpassed expectations in terms of total industrial output – it currently accounts for 29% of global industry, which is almost equal to the combined share of the US and Europe.
In short, while China did not fully achieve its goals, it has nonetheless become a global competitor.
Internal pressures and global trade tensions
However, this story doesn’t end with success alone. Efforts to achieve political goals as quickly as possible led to excessive competition within China. Economists refer to this situation as “involution,” where enterprises work more and at lower costs, but efficiency and profits do not increase.
This was particularly evident in China’s electric vehicle sector. Price wars in the market resulted in losses for many manufacturers. Government subsidies and overproduction in pursuit of strategic advantage disrupted market competition. Europe and the USA are now facing unfair competition from cheap electric cars, solar panels, and other products coming from China.
Jens Eskelund, president of the European Union Chamber of Commerce in China, told reporters, since the reverse would have exacerbated pressure on global competitors:
“Everyone should consider themselves lucky that China missed its manufacturing growth target. They didn’t fulfill their own target, but I actually think they did astoundingly well.”
In his opinion, China’s transition to producing high-value products, from toys to AI chips, is raising national security concerns and causing supply chain disruptions in the West.
Self-sufficiency or strategic dependence?
The pursuit of technological independence is not yet a completed journey for China. Huawei’s recently unveiled smartphone – with a 5G chip manufactured in China – caused a great stir, but experts still point out the high presence of foreign components in this device. However, it’s clear that this gap is rapidly narrowing: Huawei’s latest model, Pura 70, uses 33 local components and only 5 foreign ones, compared to previous models.
This shift towards domestic production began largely in response to export controls imposed by the US, such as restrictions on Nvidia and AMD’s AI chips. These policies are forcing China to accelerate domestic innovation, but at the same time, they are intensifying the global technological arms race.
R&D: who is investing more wisely?
China is investing heavily in innovation. In 2024, the country’s manufacturers achieved the national target of spending 1.68% of their revenue on research and development (R&D). Huawei significantly exceeded this benchmark, allocating more than 20% of its revenue to R&D. As a result, the company achieved 22% growth – the highest since 2016.
However, Western companies have not yet lost their leadership in this field. Tech giants like ASML and Nvidia are spending 15.2% and 14.2% of their revenues on innovation, respectively.
Jens Eskelund, raised the following question:
“Are European companies doing what is needed to remain at the cutting edge of technology?”
Economic slowdown and reassessment of policy direction
The increase in costs did not solve all the problems in China’s industry. Overproduction exacerbated the problem of “overcapacity.” In 2024, nearly half of the companies listed on Chinese stock exchanges reported losses – which indicates that competition is no longer sustainable for many.
In response, the Chinese government is choosing a new direction: now the focus is on balancing industrial production with domestic consumption. However, even at the beginning of 2025, retail sales growth lags behind industrial output.
Prime Minister Li Qiang also used the term “involution” in the government’s official report – indicating a high level of concern about pressures on China’s domestic industry.
What is the next phase in China’s industrial strategy?
“Made in China 2025” was only the beginning of what Beijing described as a “multi-decade plan.” The current Five-Year Plan (2021-2025, ending in December) emphasizes the digital economy, and the new strategic plan, which will come into force in 2026, will most likely demonstrate an even deeper commitment to innovation, technological independence, and global sustainability.
However, the main problem remains unresolved: how can China advance without disrupting the global system? If the country continues to subsidize industrial production at volumes that exceed domestic demand, this surplus will flood world markets – prices will fall, and political discontent will rise.
Today, the world is responding with tariffs, trade restrictions, and its own industrial policies. Now the question is: will China’s next strategy focus not only on production and scale, but also on balance, trust, and long-term stability?
Prepared by Navruzakhon Burieva
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