‘Made in China 2025’ a Threat to Global Trade- say Critics

 

‘Made in China 2025’ a Threat to Global Trade- say Critics

Ira Singh
23 July’23

In recent years, China has made significant strides in its efforts to become a global manufacturing powerhouse through its ambitious initiative called ‘Made in China 2025.’ While the program aims to upgrade the country’s industrial capabilities and foster innovation, it has also raised concerns among international trade partners and competitors.
Moreover,as China’s “Made in China 2025” initiative gains momentum, concerns surrounding its potential impact on global trade and economic competitiveness have caught the attention of policymakers in the United States.

Critics argue that ‘Made in China 2025’ poses potential threats to global trade, leading to heated debates over its implications on the international economic landscape.

Launched in 2015, ‘Made in China 2025’ seeks to transform China’s manufacturing sector into a high-tech and value-added industry by prioritizing ten key sectors, including robotics, artificial intelligence, aerospace, new materials, and more. The program aims to reduce China’s dependency on foreign technologies, improve domestic innovation, and enhance the nation’s competitive edge in the global market.

One of the main concerns surrounding ‘Made in China 2025’ is its emphasis on state-led industrial policies.Critics argue that these policies could distort market dynamics by providing unfair advantages to Chinese companies, thereby disadvantaging foreign competitors. The Chinese government’s heavy investment in research and development, as well as substantial financial support for domestic companies, has raised eyebrows among international trade partners who fear an uneven playing field.

Additionally,one of the major issues for Congress is the perceived threat to U.S. economic interests. Critics argue that “Made in China 2025” poses significant challenges for American companies by intensifying competition and eroding market share. The Chinese government’s substantial financial backing and incentives for domestic companies have raised concerns about unfair competition and possible market distortion, placing American firms at a disadvantage when operating in China or competing with Chinese companies in global markets, according to sources.

Intellectual property rights (IPR) protection is another pressing concern for Congress. Allegations of China’s involvement in intellectual property theft and forced technology transfers have long been a point of contention. As China endeavors to become a leader in advanced technologies, concerns about the protection of American innovations and trade secrets have intensified. Congress is faced with the challenge of finding effective ways to safeguard U.S. intellectual property rights while preserving diplomatic and economic ties with China.

According to report submitted by Specialist in Asian Trade and Finance,The Executive Branch to date has not sought to enforce China’s commitments on IP and technology transfer even as The (People’s Republic of China)PRC government expands its statist practices. The (United States Trade Representative) USTR to date has kept tariffs, saying it is difficult to justify lifting them when the PRC government has not changed its practices of concern. Some members have sought to restrict investment, trade, technology, and research ties that support MIC2025, diversify critical supply chains away from China, and prohibit China from participating in U.S. infrastructure and federal procurement. Congress might examine:
1.The efficacy of U.S. tools and policies in practice (e.g., export control, foreign investment, and antitrust) in countering China’s industrial policies;
2.Implementation of recent agreements and negotiation of new rules;
3 Whether the PRC state’s growing role in business calls for treating PRC firms differently;
4.The future trajectory of U.S.-PRC technology ties and how current trade, investment,and technology transfer might affect U.S. competitiveness; and
5. How China’s reliance on certain U.S. capabilities strengthen U.S. leverage and create U.S. options to counter PRC industrial policies.

The debate over ‘Made in China 2025’ continues to be a focal point in discussions on global trade and economic relations. Striking a balance between promoting domestic industrial growth and ensuring fair trade practices will be crucial for maintaining stable and mutually beneficial international trade relationships in the years to come.Moreover,as Congress grapples with the implications of “Made in China 2025,” it will continue to be at the center of discussions on U.S. trade policy and national security.As the world watches China’s progress, finding common ground and addressing concerns will be essential for fostering a prosperous global trade environment.