What is China 2025

"Made in China 2025": Technology transfer and investments in foreign high-tech companies - China's path to becoming a competitor for future technologies

"Made in China 2025", the strategy of China provides for the strengthening of the domestic economy, targeted investments in foreign high-tech companies and outlines the goals for the development of ten domestic branches of industry with the intention of making China a competitor for global technology leadership. Is greater protection necessary to counter takeovers and the outflow of technology and know-how? For Frederik Kunze and Torsten Windels, Norddeutsche Landesbank (NORD / LB), it is clear that China's grab for technology leadership in important key industries and the ongoing integration into global value chains is not a temporary phenomenon. With successfully generated trade surpluses, the country no longer passively waits for technology transfer through direct investments, but instead buys technology in a targeted manner. The general advantages of open markets and the opportunities that could arise from working with an investor from China are well documented. However, it is not the right way to face a strategic and dominant player like China with the rules of fair competition, rather the demand for reciprocity in China is necessary. According to Max J. Zenglein and Anna Holzmann, MERICS, China would like to become one, perhaps even the global leading power among the industrialized nations by 2049. "Made in China 2025" formulates the goal of advancing the country in ten key industries. China has every right to further develop its own economy. Nevertheless, Chinese and foreign actors should be able to compete fairly with one another. That is why local governments and companies should not lose sight of the Chinese innovation offensive and should actively campaign for framework conditions that leave them room for maneuver. Horst Löchel, Frankfurt School of Finance & Management, sees “Made in China 2025” as offering considerable opportunities for Western companies. In order to use cutting-edge technology, China needs it first of all. This opens up sales opportunities for European and German industry. New industrial European-Chinese conglomerates and joint ventures may also emerge. Furthermore, Chinese direct investments in Europe and Germany are to be assessed positively across the board, as they bring new capital for companies and often open up larger business opportunities in China. On the other hand, it is also right to insist on reciprocity with China. But in the end it is a good thing that “Made in China 2025” is stimulating competition. Antonia Reinecke and Hans-Jörg Schmerer, FernUniversität Hagen, see the first successes of China's strategy of becoming more active in high-tech industries, also through the acquisition of high-performance technology from abroad. Whether China will succeed in driving technological change in this way and achieving technological leadership in the international world cannot be disputed or confirmed at this point in time. What is certain is that China is investing a lot in technological progress and is trying both nationally and internationally to close the gap to the industrialized nations. Oliver Emons, Hans Böckler Foundation, asks to what extent China is a partner or a rival and refers to different perspectives and experiences with Chinese investors. In his opinion, there have been a number of different reasons for a buyout in recent years. Although the individual takeovers seem to have been largely positive so far, on the other hand, the top management in the companies taken over look very skeptical and with a high degree of uncertainty on these investments. It remains to be seen whether Chinese company buyers will take their commitments seriously in the long term or just regard them as legal formalities. Markus Taube, University of Duisburg-Essen, firmly expects that China will achieve substantial success in the global competition for future technologies in the next few years. For foreign actors, interaction with China is increasingly like “a dance on a knife's edge”. Important impulses and resources for knowledge accumulation and technology development in China came from abroad. In the longer term, there is a risk of being ousted by Chinese actors who could develop considerable competitive power in global markets from the combination of absorbed foreign knowledge, state protection and funding, and their own smart entrepreneurship. In the next few years it must now be a matter of using the welfare-increasing possibilities of interaction with the Chinese economy and its companies as intensively as possible and at the same time neutralizing the role of the Chinese state that is distorting competition.