The Diplomat author Mercy Kuo regularly engages subject-matter experts, policy practitioners, and strategic thinkers across the globe for their diverse insights into U.S. Asia policy. This conversation with Camille Boullenois – associate director with Rhodium Group’s China team and co-author of the report “Was Made in China 2025 Successful?” prepared for the U.S. Chamber of Commerce – is the 463rd in “The Trans-Pacific View Insight Series.”
Examine how Made in China 2025 (MIC2025) has evolved since its inception in 2015.
While MIC2025 was officially shelved from public discourse in 2018 due to intense international backlash, its core objectives quietly persisted and even intensified. Over the past decade, MIC2025 has entrenched state-led industrial policy as the central engine of China’s economic strategy, steering it further away from market-oriented reforms.
The strategy catalyzed an unprecedented expansion of industrial policy funding, primarily through new instruments such as state-backed investment funds and industrial parks. It also prompted a ramp-up of discriminatory policies, pressuring foreign companies to localize their production in China and tilting the playing field in favor of domestic companies. These policies were not new but accelerated after 2015.
In recent years, Beijing’s priorities under the MIC2025 umbrella have narrowed. Facing mounting fiscal constraints and rising debt burdens, policymakers have increasingly concentrated resources on a handful of strategic sectors, in particular semiconductors and clean technology, where they see the greatest payoff in terms of strategic autonomy and geopolitical leverage.
Analyze the successes and setbacks of MIC2025.
By most measures, MIC2025 has been remarkably successful in advancing China’s self-sufficiency and industrial competitiveness. A decade ago, many sectors would have been critically exposed to foreign supply disruptions; today, China is far more resilient. Vulnerabilities persist in areas such as advanced semiconductors and high-end medical equipment, but the number and severity of chokepoints have diminished. This momentum is likely to continue, with Chinese firms expected to narrow the gap with global leaders in sectors like biotechnology, robotics, and medical devices.
But success has come at significant economic cost. MIC2025 has deepened resource misallocation, propped up uncompetitive firms, and contributed to structural overcapacity in key industries. Local authorities under huge fiscal strain are now facing difficult trade-offs between advancing national industrial priorities and fulfilling basic budgetary obligations.
Sacrificing productivity and growth may not be a sustainable strategy in the long term. Already, China’s economy has peaked in size as a proportion of the global economy. The costs of years of low-return investments make it increasingly hard for Beijing to shift away from an unproductive strategy. Increasing friction between China and its trading partners is exacerbating pressures on its innovation and industrial ecosystems.
Has MIC2025 achieved China’s intended outcome of self-sufficiency and global market share in strategic sectors?
Progress has been substantial but uneven across MIC2025’s three broad objectives: reducing import dependencies, reducing reliance on foreign firms, and achieving global leadership.
China has been most successful at lowering its import dependence, especially by pressuring multinationals to localize operations. This localization push has reshaped trade flows, as production shifted from imports to domestic manufacturing. “In China for China” has become a defining feature of many global firms’ China strategies.
Success in reducing dependence on foreign firms has been more mixed. In some sectors, such as automotive components, industrial cloud computing, and power equipment, Chinese firms have gained ground through preferential treatment and market restrictions. However, in cutting-edge domains like aerospace, advanced semiconductors, and premium medical tech, foreign incumbents still maintain a commanding lead.
The most elusive goal remains global corporate leadership. While Chinese firms have become formidable players in volume and cost-sensitive markets like EVs and solar, they still lag in international brand recognition, R&D investment, and control over high-margin segments. Western multinationals still capture the lion’s share of global profits. Nonetheless, the trajectory is clear: Chinese companies are rapidly climbing the value chain and starting to become true multinationals.
Explain the impact of China’s economic securitization in areas such as supply chains, semiconductors and critical materials.
China’s economic policymaking has long embedded security imperatives, but the past decade has elevated these concerns to the forefront. What many democracies have only recently started labeling “economic security,” China has been pursuing this in practice for years.
That strategy has produced results. China now dominates many critical upstream and midstream segments in clean technologies, including rare earths, batteries, and solar equipment. These reverse dependencies are no longer confined to low- and mid-tech sectors but increasingly extend into frontier technologies.
This dominance provides Beijing with powerful leverage, which it has shown increasing willingness to use, either for economic coercion, retaliation, or to prevent foreign competitors from entering the industry. China’s control of entire value chains, particularly in clean tech, creates self-reinforcing advantages that are difficult for competitors to unwind.
Still, China’s ability to match the coercive reach of U.S.-led economic statecraft remains constrained by its limited influence over global finance and a continued reliance on foreign technology in select high-end domains.
Assess how Beijing correlates China’s technological dominance with its geopolitical positioning vis-à-vis competition with the United States.
Beijing sees technological supremacy as foundational to its geopolitical ambitions and its strategic competition with the United States. MIC2025 was never solely an economic initiative; it was designed to enhance China’s leverage in a world increasingly shaped by technology. For Beijing, reducing dependence on the U.S. and its allies is a national security imperative. Dominance in emerging sectors such as AI, biotechnology, and electric vehicles is seen as essential to gaining leverage and projecting geopolitical influence.
This logic helps explain why Beijing remains committed to an industrial strategy rooted in self-sufficiency and long-term resilience, even amid mounting economic headwinds. Beijing’s determination reflects a broader worldview in which economic efficiency and short-term growth are subordinated to long-term strategic goals.