China NDRC: National funds should prioritize upgrading strategic modern industries

China NDRC: National funds should prioritize upgrading strategic modern industries

The National Development and Reform Commission (NDRC) of China has directed national funds to prioritize the upgrading of strategic modern industries, as part of the broader "Made in China 2025" (MIC 2025) initiative. This strategic shift aims to enhance China's manufacturing capabilities, reduce reliance on foreign technology, and increase domestic market share in key high-tech sectors.

According to the MIC 2025 plan, the NDRC has identified nine critical areas for development, including electric cars, information technology, artificial intelligence, and advanced robotics. By 2020, China aims to raise the domestic content of core components and materials to 40 percent, and by 2025, this target is set to increase to 70 percent [1]. This localization strategy is a significant departure from China's previous reliance on foreign technology and aims to capture a larger share of the global market.

The NDRC's focus on strategic modern industries aligns with President Xi Jinping's vision of China becoming a leading global manufacturing power by 2049. The plan emphasizes the development of indigenous technology, local brand awareness, and green manufacturing practices. To achieve these goals, the NDRC is providing substantial financial support to domestic firms, including subsidies, export credit insurance, and investments in research and development (R&D) [1].

China's approach to achieving these goals includes state-sponsored funds and policies that favor domestic companies. The NDRC has established nearly 800 state-guided funds valued at RMB 2.2 trillion to support industries closely tied to MIC 2025 [1]. Additionally, the NDRC is investing heavily in education and training facilities to cultivate a skilled workforce, with the number of Chinese engineering graduates quadrupling between 2002 and 2014 [1].

The international community has reacted to China's MIC 2025 initiative with mixed feelings. While some countries acknowledge China's technological advancements, others, particularly the United States, have expressed concerns about intellectual property theft, talent poaching, and market distortions [1]. These concerns highlight the complex interplay between China's industrial ambitions and global trade dynamics.

The NDRC's focus on strategic modern industries is a critical component of China's broader economic strategy. By prioritizing these sectors, China aims to enhance its technological capabilities, reduce its reliance on foreign technology, and become a global leader in high-tech manufacturing. The success of this strategy will have significant implications for both China's domestic economy and its role in the global market.

References:
[1] https://orcasia.org/made-in-china-2025