China's Rise, Asia's Decline by William Bratton

Author:William Bratton
Language: eng
Format: epub
Publisher: Marshall Cavendish International

Unprecedented scale

There is, therefore, more than a taint of hypocrisy in the US, European and Japanese criticisms of China’s industrial policies. Many of the Western companies crying foul about Chinese competition and practices are often themselves the current or past beneficiaries of protected markets and policy support. This is especially the case for Japan, which only a few decades ago was causing many similar concerns across Europe and the US.290 But while China’s efforts to promote its industrial base can be seen as following in the footsteps of many other countries throughout history, there are four aspects of its industrial development which should be raising substantial concerns in the region’s capitals: the first is the sheer scale of its undertaking, with China accelerating the growth of its industries through the mobilisation of resources that can never be matched by other countries; the second is China’s strategy of developing super-scale national champions that threaten to dominate Asia’s industries and displace regional competitors; the third is the geopolitical implications associated with its industrial rise, especially given the country’s broader regional objectives; and the fourth is the longer-term impact of China’s actions on its neighbours’ industries and economic outlook.

China’s industrialisation efforts are being undertaken on an unprecedented scale. Although many governments across Asia have demonstrated relatively high interventionist tendencies, none have matched China’s ability to mobilise such vast resources in a comparably coordinated manner. Its industrial efforts involve every component of the state, including both central and provincial governments, SOEs and private companies, and financial institutions of all types, as well as universities, research units and industry bodies. Although the overall rallying call of this drive is the country’s objective of being a “leading global manufacturing power” by 2049 (the 100th anniversary of the founding of the PRC), this level of commitment also reflects the urgency the country places on transitioning from an emerging to a developed economy and the importance it places on advancing its industries into more innovative, productive and higher value-add sectors as part of this process. China’s efforts also reflect its broader geopolitical objectives, namely the desire to reduce its dependence on foreign technologies and assert its technological supremacy over the region.

The MiC2025 initiative summarises the scale of effort with its ambitious targets for indigenous innovation, reduced reliance on foreign inputs and the development of domestic capabilities. The expectation is that foreign firms will be displaced and that Chinese products will meet the majority of domestic demand and win significant international market shares. The initiative has specific 2025 targets measuring the success of Chinese firms across multiple industries, including new energy vehicles (more than 80% of the domestic market targeted), mobile phones (80% of the domestic and 45% of the international market) and agriculture equipment (more than 95% of the domestic market).291 Even where China’s industrial capabilities remain relatively nascent—for example, airplanes and jet engines—there are ambitious plans to accelerate the rate of development.

There is some uncertainty as to whether these targets should be read more as expressions of intent rather than hard expectations.

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