"Made in China 2025," which is China's blueprint for transforming the country into a high-tech powerhouse across multiple industries, poses many problems for the rest of the world's technology exporters, not the least of which is supply chain disruption.
If China wants to become the world's pre-eminent supplier of tech products, Chinese industry will have to start producing goods and services that billions of people will want to buy. That's a tall order, but it's all a part of global competition.
On the other hand, if China's real goal is disrupting markets by causing supply chain headaches, that's a different story. From my perspective, major disruptions in the technology supply chain could easily lead to harsh reactions from entrenched incumbents like the U.S., Germany, South Korea, Japan, Ireland, Israel and the Czech Republic.
Does China really want to pick a fight with the world's technology leaders? There's a reason so many countries dislike the "Made in China 2025" policy. Something about the policy suggests that China won't settle for a simple victory. Instead of seeking a win-win, China is looking for tech domination.
The policy is "a blueprint for Beijing's plan to transform the country into a hi-tech powerhouse that dominates advanced industries like robotics, advanced information technology, aviation, and new energy vehicles. The ambition makes sense within the context of China's development trajectory: countries typically aim to transition away from labor-intensive industries and climb the value-added chain as wages rise," writes Adam Segal in a post for the Council on Foreign Relations.
As Segal notes, it's normal for countries to develop strategies for climbing the value chain. But intentionally roiling markets for your competitors is not going to win you any friends. In fact, it might unite your competitors and encourage them to fight back.
"Rather than abiding by the free market and rule-based trade, China is intent on subsuming the entire global hi-tech supply chain through subsidizing domestic industry and mercantilist industrial policies," writes Segal.
Frankly, China's plan is misguided. It might look good on paper, and it might even work over the short-term. But over the long-term, you need friends if you want to succeed in global markets. China's decision to make its competitors angry seems unnecessary and short-sighted.
Here's my advice: Rethink the "Made in China 2025" policy and come back with a new policy that shows the world's technology leaders you want to partner with them, not eat their lunch.