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China to allocate 10 billion yuan to the ‘Made in China 2025’ initiative

China to allocate 10 billion yuan to the ‘Made in China 2025’ initiative
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Image courtesy of the Peoples Daily Online

Chinese authorities have said they will allocate 10 billion yuan (RM6.41 billion) towards a special fund to support China’s “Made in China 2025” initiative, according to Xinhua’s Economic Information Daily of 12 October 2017.

According to the Ministry of Industry and Information Technology (MIIT), these funds will be used to boost innovation in the manufacturing sector, strengthen industrial chain coordination, build a generic technology services platform, and carry out an insurance programme for the application of new materials.

Also, these funds will be used to support about 25 projects, including Internet of Things, new materials, smart appliances, high-end consumer electronics, industrial information, and security control and infant formula quality control.

According to industry authorities, each project will get between 30 and 50 million yuan (RM19.2 and RM 30.0 million), whilst key projects will receive 100 million yuan (RM64.14 million) to support development initiatives.

Industry and information technology departments at all levels across China have made public their plans to help fund key projects in their respective provinces.

Beginning last year, Guangdong province has invested over one billion yuan (RM641 million) into robotics, rail transportation, biomedicine, integrated circuits, and intelligent equipment.

The MIIT has signed an agreement with the National Development Bank (NDB) to aid pilot projects that are preferred by the market. The NDB has pledged that it will offer no less than 300 billion yuan (RM192.5 billion) to support the “Made in China 2025” initiative from 2016 to 2020.

Many enterprises have begun to apply for the fund. For instance a person in charge of an integrated circuit company reportedly said that the financial support from China’s central and local governments will help the company attain technical achievements and promote industrialisation.

Made in China 2025

The Made in China 2025 is a 10-year plan announced by China’s State Council in May 2015 to transform China from a giant manufacturing base into a world manufacturing power.

Image courtesy of the Peoples Daily Online

On 7 July 2015, the State Council announced: “We need to implement the guiding principles of the Eighteenth National Party Congress and the Second, Third and Fourth Plenary Sessions of the Eighteenth Central Committee in order to follow a new path of industrialisation with Chinese characteristics.”

“Manufacturing is the main pillar of the national economy, the foundation of the country, tool of transformation and basis of prosperity. Since the beginning of industrial civilization in the middle of the 18th century, it has been proven repeatedly by the rise and fall of world powers that without strong manufacturing, there is no national prosperity. Building internationally competitive manufacturing is the only way China can enhance its strength, protect state security and become a world power”, the State Council added.

The Made in China 2025 plan was endorsed by Premier Li Keqiang and represents the first phase of China’s strategy focused on the development and promotion of its manufacturing sector.

Two subsequent plans will follow which aim to transform China into a leading manufacturing power by the year 2049 the 100th anniversary of the founding of the People’s Republic of China.

Under Made in China 2025, nine tasks have been identified as priorities – namely:-

  • To improve manufacturing innovation.
  • To integrate technology and industry.
  • To strengthen the industrial base.
  • To foster Chinese brands.
  • To enforce green manufacturing.
  • To promote breakthroughs in 10 key sectors.
  • To advance restructuring of the manufacturing sector.
  • To promote service-oriented manufacturing and manufacturing-related service industries.
  • To raise China’s manufacturing to international standards.

The 10 key sectors referred to above are in areas of new information technology, numerical control tools and robotics, aerospace equipment, ocean engineering equipment and high-tech ships, railway equipment, energy saving and new energy vehicles, power equipment, new materials, medicine and medical devices, and agricultural machinery.

To fulfil these tasks, Made in China 2025 will focus on five major projects, including the establishment of a manufacturing innovation centre and to boost intelligent manufacturing.

Image courtesy of the Peoples Daily Online

“By 2025, China will basically realise industrialisation nearly equal to the manufacturing abilities of Germany and Japan in their early stages of industrialisation”, MIIT minister Miao Wei said according to Xinhua.

Amongst all Made in China 2025 projects, intelligent manufacturing is crucial and the MIIT will participate in a three-year study of this key topic, according to Miao.

“There are many criteria to judge whether a country is a manufacturing power or not, including industrial scale, optimised industrial structure, sound quality and efficiency and sustainable development, but the key lies in innovation”, according to Li Beiguang, deputy head of MIIT planning division.

“To promote manufacturing and national competitiveness, it is important to mobilize every conceivable element to stimulate innovation rather than simply support a single industry”, Li added.

Whilst China’s manufacturing accounts for about 20% of the world’s total, but according to Li, its “far from strong”.

A MIIT official who declined to be named had told Xinhua that China is being pressured from both sides, as advanced economies such as the United States, Germany and Japan had formulated their own policies to support further development of their own manufacturing capabilities, whilst at the same time, emerging economies such as India and Brazil are also catching up with their own advantages.

The Made in China 2025 plan was conceived as Chinese factories still struggle with decreasing demand, increasing competition from international competitors and slower economic growth.

The plan will span the whole manufacturing industry, applying advanced ideas not only from Germany and Japan, but also from the United States and Britain, among others, said officials.

Made in China 2025 was proposed in the China government’s 2015 work report and its blueprint was drafted by MIIT and three other ministries.

To support the plan, China will introduce a slew of policies to deepen institutional reforms and strengthen financial support. Implementation of the Made in China 2025 plan will be market-oriented under government guidance.

Strategic support and supply for Made in China 2025 include:-

  • Institutional Mechanism Reform
  • Fair Market Environment
  • Financial Support Policies
  • Fiscal and Taxation Policy
  • Multi – level Talent Cultivation Systems
  • Medium, Small and Micro Enterprise Policy
  • Manufacturing Openness
  • Organisation and Implementation System

The next five years

Meanwhile, at upcoming four-day 19th National Congress of the Communist Party of China from 18th October 2017, 2,287 elected delegates from all parts of China will decide on the Party’s national policy goals over the next five years, elect its top leadership, review the Party’s work since 2012 and chart a course of action to guide the nation’s development over the coming years under a new leadership.

The 2,287 delegates are members of the 88 million strong Communist Party of China. They include not only high-ranking government officials, party leaders, and military officers but also 771 grassroots Party members or 33.7% from frontline production and manufacturing sectors such as manual workers, skilled workers, farmers, scientists, engineers, technicians, doctors, nurses, teachers and others.

Image courtesy of the Peoples Daily Online

In addition, 24.1% of the overall delegates will be women party members.

To qualify for election as delegates, nominees must be highly qualified politically and ideologically, have good work and life styles, be competent in discussing state affairs, and have been successful in their work.

The voices of these grassroots delegates, especially those who have made achievements in reforms, scientific innovation and poverty alleviation, are expected to contribute their experiences and wisdom towards increasing the strength of China’s overall reform across all social sectors over the next five years.

“The 19th CPC National Congress is a very important meeting, to be held at a critical stage when China is striving to achieve an all-round moderately prosperous society, and at a critical time for the development of socialism with Chinese characteristics,” the People’s Daily Online of 13 October 2017 quoted a a government statement issued after a meeting in September.

“China’s new five-year plan will not only shape the future of China for the years to come, but the future of the world. From the Belt and Road Initiative, to the goal of building an international community of shared future, China has provided a new blueprint for global development, one which will have a transformative effect on Asia and the world”, wrote the People’s Daily Online.

Image courtesy of the Peoples Daily Online

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