Made in China 2025 plan is similar to Germany’s Industry 4.0 plan

“Made in China 2025” is an initiative to comprehensively upgrade Chinese industry. The initiative draws direct inspiration from Germany’s “Industry 4.0” plan, which was first discussed in 2011 and later adopted in 2013. The heart of the “Industry 4.0” idea is intelligent manufacturing, i.e., applying the tools of information technology to production. In the German context, this primarily means using the Internet of Things to connect small and medium-sized companies more efficiently in global production and innovation networks so that they could not only more efficiently engage in mass production but just as easily and efficiently customize products.

The Chinese effort is far broader, as the efficiency and quality of Chinese producers are highly uneven, and multiple challenges need to be overcome in a short amount of time if China is to avoid being squeezed by both newly emerging low-cost producers and more effectively cooperate and compete with advanced industrialized economies.

If Germany’s goal is to have its SMEs hitch on to a high-tech revolution, China aims to comprehensively upgrade its industry in all dimensions (human capital, management, optimization, quality control, etc.). In other words, Made in China 2025 represents a holistic approach to manufacturing whereas Industrie 4.0 focuses primarily on internet integration.

It appears that Made in China 2025 took at least one page out of America’s book. The Chinese plan foresees the creation of 15 manufacturing innovation centers by 2020 and 40 by 2025. A few years ago, the U.S. government co-founded a National Network for Manufacturing Innovation (NNMI) made up of several Institutes for Manufacturing Innovation, a concept similar to Chinese innovation centers. Although distinct from the Industrial Internet and the IIC, the NNMI bears a distinctive hallmark of industrial policy. In this sense, Made in China 2025, Industrie 4.0, and America’s NNMI all trace their origins to government activism.

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