Can China Top America In Global Trade By 2025?

Is Chinese global domination going to be secured through the Made in China 2025 policy?

China is continuing to push for rapid economic and industrial growth on a major scale in an attempt to dethrone America as the world’s main global manufacturer by 2049, 100 years after Mao Zedong declared the creation of the People’s Republic of China following the Civil war between nationalist and communist forces.

This new era under Mao would result in the Great Leap Forward and the Cultural Revolution as labour-intensive industry was kick-started, with millions of lives lost in the process.

Now, further progress on the road to global domination is evident with the ambition to make Chinese products at the forefront of an international market.

Photo by Kyle Ryan

The 2025 plan

Designs are being created to produce leading technologies and dominate global industries such as artificial intelligence, microchips and electric cars. An example of such ambition materialised in 2017 as GlobalFoundries – a multinational semiconductor design, development, fabrication, and innovation company, with a revenue of over 5 and a half billion US dollars – announced a $10 million project in China.

Such a partnership is designed to help Chengdu, the capital of the southwestern Sichuan province, attract leading semiconductor companies to the area as a “centre of excellence”.

Alan Mutricy, senior vice president of product management at GlobalFoundries, said: “China is the largest semiconductor market and is leading the way with a nationwide commitment to smart cities, IoT, smart vision and other advanced, mobile or battery-powered connected systems.”

Although based in California, GlobalFoundries’ partnership in China was a landmark deal for Xi Jinping’s nation. Upgrades on what China currently manufacture is part of the plan to step up the nation’s trading prowess.

Photo by chuttersnap

Growing Chinese economy

The International Comparison Program, a partnership of statistical administration in roughly 200 countries under the direction of the World Bank, released statistics in 2011 which underlined China’s potential for global monopolies of power.

Findings highlighted that Asia and the Pacific accounted for 30 percent of the world GDP with China and India making up two-thirds of the Pacific economy, excluding Japan and South Korea. What’s more, China was part of the group of five nations with the highest GDP per capita (alongside Qatar, Macao SAR, Luxembourg and Kuwait).

Statistics also pinpointed China as holding the largest share of the world’s expenditure for investment with 27 percent, 14 larger than the USA.

Yet, the financial picture is not entirely rosy seven years on with recent data showing signs of decline, despite the 2025 ambition. US tariffs on $34 billion worth of Chinese goods has had an effect on the economy with growth slightly down according to the latest Reuters poll.

US trade war

If one thing is going to puncture China’s 2025 plan, it is the looming threat of America and Donald Trump. The 45th President has threatened China with further tariffs in the face of Chinese retaliation to initial tariffs. As a result, Xi Jinping has ensured his nation has retreated from a deal to buy American agricultural and energy products, equating to a total of $70 billion.

Trump’s 25 percent tariff on Chinese products will make the goods 25 percent more expensive for American consumers, and subsequently stall Chinese growth and economic productivity.

The stand-off could have a knock-on effect for GDP rates on an international scale, yet the battle for hegemonic power between two global superpowers means this is not going to be settled easily without major concessions and a willingness to drop stubborn resistance on either side.

Photo by Jorge Alcala

What next?

While the Made in China 2025 policy has been set out on paper, the reality will be much more convoluted and nonlinear because of the trade war with America.

China’s model on the road to 2025 is being driven by a bottom-up willingness amongst businesses to modernise, as well as the drive of Chinese leaders themselves. Initiatives such as replacing humans with machines and robots to increase productivity has occurred, as well as other smart manufacturing products such as smart sensors, wireless sensor networks and radio frequency identification chips.

Government entities are helping to fund the targets set through the plan, with the Advanced Manufacturing Fund resulting in 20 billion Chinese yuan being available, for example, to fund the nation’s industrial future.

It has certainly not always been the case historically, but it appears that obstacles to China’s growth could be external rather than internal at this stage.

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