China is planning to close the gap to leading industrialized nations

China has set itself the audacious target of closing the gap to other leading industrialized nations with its ‘Made in China 2025’ scheme. The scheme, which shares many notable similarities to the German ‘Industrie 4.0’ scheme, is a major national proposal to boost and modernize manufacturing innovation in an effort to promote more home-grown products and reduce China’s reliance on other countries.

A major component of this bold plan is to boost domestic content of core materials. As it stands, China is still heavily dependent on foreign production. For example, China is nearly entirely reliant on foreign developers for the components for high level digital control systems and high-level hydraulics.

To achieve its goals, China plans to create ‘Innovation Centers.’ These centers will allow China to develop more high-end equipment. To support these Innovation Centers, which will essentially become the bedrock for their increased industrial development; China will also move away from mass production, to more high-end and bespoke production, thus promoting their vision of an innovation based economy.

As a part of this major effort, China is also planning on merging its state owned ChemChina with Sinochem, creating the world’s largest industrial chemical firm. This merger is likely to take place later this year or early next year and is highly significant. Not only does it demonstrate China’s willingness to become the world leader in competitive chemicals, fertilizer and oil industries, all of which are also core components to creating higher end production, it also gives them new access to trade, which will help China in re-investing in their ‘Made in China 2025’ scheme.

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