The Smart Robot Arm is Changqing Auto Parts Co., Ltd., located on March 13, 2025 in the Anchor Economic Development Zone, Anhui Province, China. Works on production line at production workshops (Costfoto/Nurphoto photos via Getty Images)
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BEIJING — China has missed out on some key goals from its 10-year plan for technology to become self-sufficient and fosters unhealthy industrial competition that exacerbates global trade tensions, the European Chamber of Commerce said in a report this week.
When Beijing released its “Made in China 2025” plan in 2015, it received important international criticism for promoting Chinese business at the expense of foreigners. The country then downplayed the initiative, but has doubled the domestic technological development as it has been given restrictions over the past few years.
Since announcing the plan, China has surpassed its targets for achieving domestic domination in automobiles, but the country has yet to reach the value-added growth rates of aerospace, high-end robots and manufacturing, the business chamber says, citing research and discussions with its members. Of the ten strategic sectors identified in the report, China achieved only technological control of shipbuilding, high-speed rail and electric vehicles.
China’s goals are generally considered directions rather than actual numbers to be achieved by a particular date. The Made in China 2025 plan outlines the first decade that the country called the “Multide Card Strategy” to become a global manufacturing powerhouse.
The Chamber of Commerce noted that China’s self-developed planes, which are C919s, still rely heavily on US and European components, and that the level of automation in the industry is “a significant increase” but mainly due to foreign technology. Furthermore, the growth rate for the added manufacturing value reached 6.1% in 2024, down from the 7% rate in 2015, to more than half of the target of 11%.
“Everyone should consider themselves lucky that China missed its manufacturing growth target,” Jens Eskelund, president of China’s European Union Chamber of Commerce, told reporters on Tuesday. “They didn’t meet their own targets, but I actually think they did surprisingly well.”
Even at its slow pace, China has transformed over the past decade to drive 29% of the world’s manufacturing value. It’s roughly the same as a combination of the US and Europe, Eskerund said. “Before 2015, China was not a direct competitor between Europe and the US in many categories.”
In recent years, the US has attempted to limit access to China’s high-end technology and encourage sophisticated manufacturers to build factories in the US.
Earlier this week, the US issued the MI308 artificial intelligence chips from US-based chip manufacturers NVIDIA and AMD’s MI308 artificial intelligence chips, as well as equivalent export licensing requirements to China. Previously, Nvidia said it would cost around $5.5 billion quarterly fees as a result of the new export licensing requirements. Chipmaker CEO Jensen Fan met with China’s deputy prime minister in Beijing on Thursday, according to Chinese state media.
Lionel M. NI, founder of the Guangzhou campus of Hong Kong University of Science and Technology, said US restrictions “drove us to make things we had to buy before.” That’s according to CNBC translation of his Mandarin language remarks to reporters on Wednesday.
NI said that the products needed for homemade development efforts include chips and equipment, and if alternatives to restricted items are not available immediately, the university will purchase the second best version available.
In addition to the subject plan, China issues national development priorities every five years. The current 14th five-year plan will end in December, highlighting support for the digital economy. The next 15th year five-year plan is scheduled to be released next year.
China catches up
The extent to which China will become completely self-sufficient in its major technology systems in the near future remains unknown. However, local businesses are making rapid progress.
Chinese telecommunications giant Huawei has released a smartphone in late 2023 that is reportedly included an advanced chip that can be used to speed 5G. The company has been blacklisted in the US since 2019, and last year released its own operating system, reportedly completely separate from Google’s Android.
Analysts in Washington, DC, analysts at the Center for Think Tanks for Strategic and International Studies, this week said, “West chip export restrictions have had some success in that while costing US and allies a certain amount of money, they temporarily retreat China’s developmental efforts in semiconductors. However, they pointed out that China has only doubled “they could destabilise the US semiconductor ecosystem.”
ThinkTank, for example, is the current generation of Huawei smartphones, the Pura 70 series, which incorporates only 33 Chinese-made components and five, which only come from outside China.
Huawei reported a 22% revenue spike in 2024. This was the fastest growth since 2016 and was supported by a recovery in the consumer products business. The company spent 20.8% of its revenues on research and development last year. This exceeds the annual target by more than 10%.
Overall, Chinese manufacturers have reached a national target of 1.68% due to spending on research and development as a percentage of operating revenue, the EU Chamber Report said.
“Europe needs to look at itself harshly,” Eskerund said, referring to Howay’s high R&D spending. “Do European companies do what they need to stay on the cutting edge of technology?”
Dutch semiconductor equipment company ASML spent 15.2% of its net sales in 2024 on R&D, while Nvidia’s ratio was 14.2%.
Overpower and security concerns
However, high spending doesn’t necessarily mean efficiency.
Electric car racing in particular encourages a price war, with most automakers owing to losses in attempts to undercut their competitors. This phenomenon is often referred to in China as “neijuan” or “in doction.”
“We need to make it happen too [China’s] Eskerund said success has not come without issue.
He added that attempts to meet the target of “Made in China 2025” have contributed to the regression, noting that China’s efforts to move the manufacturing value chain up from Christmas ornaments to high-end equipment has increased global concerns about security risks.
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In an annual government work report in March, Chinese Prime Minister Li Qiang called for efforts to stop school dropouts, reflecting the orders from a high-level Politician meeting held in July last year. The Political Bureau is the second highest circle of power in the dominant Communist Party of China.
Such fierce competition exacerbates the impact of already slowing economic growth. Of the 2,825 Chinese listed companies, 20% reported losses for the first time in 2024 in 2024, according to CNBC analysis of wind information data on Thursday. The share of companies that lost money last year, including those that reported a year-long loss, rose to nearly 48%, the analysis showed.
In March, China emphasized that increasing consumption for the year was a priority after previously focusing on manufacturing. Retail sales growth has lagged behind industrial production for a year since the beginning of 2024, official data accessed via wind information.
Policymakers are also “looking for ways to ensure a better alignment between production power and what the domestic market can absorb,” Eskellund said, adding that efforts to increase consumption are not so important if production power grows faster.
But when asked about policies that could address manufacturing overpowerment, he said, “We are also eagerly waiting for it.”
