Two development officials from the United Nations have written an analytical report to introduce "China Manufacturing 2025", also called "Made in China 2025", and recommended this strategy to other countries to avoid the middle-income trap.
The report, entitled "Learning from China's Industrial Strategy", was written by Richard Kozul-Wright, Director of the Division on Globalization and Development Strategies at the UN Conference on Trade and Development, and Daniel Poon, an Economic Affairs Officer at the UN Conference on Trade and Development.
To avoid the fate of what Harvard University economist Dani Rodrik called "premature deindustralization", China has turned to its "Manufacturing 2025", a roadmap released by Chinese Premier Li Keqiang in 2015 to guide the country's industrial modernization, the report said.
"The strategy focuses on developing advanced manufacturing sectors, but also considers how producer services, services-oriented manufacturing, and green technologies can complement that process," said the report.
The concept of "Made in China" was first put forward by Li in his government work report in 2015. In May 2015, China's State Council announced "Made in China 2025" as a national initiative to improve the manufacturing industry -- initially up to 2025, then to 2035 and 2049.
The goal is to transform China into a leading manufacturing power. "Policy and financial support will be provided to spur technological breakthroughs in ten key areas, including next-generation information technology; high-end computer-controlled machine tools and robotics; space and aviation equipment; alternative-energy vehicles; and bio-medicine and high-performance medical device," the report introduced.
"According to China's strategy, by 2025, the country should have a set of internationally competitive multinational firms that have made progress in upgrading their positions in global value chains."
"Moreover, by that date, key Chinese industries should adopt international efficiency standards related to energy and material consumption and pollution. By 2035, China expects its economy to be fully industrialized," it added.
The article also introduced the strategy's less-noticed yet equally important innovative financial and investment policies.
"This approach, China hopes, can drive progress toward its objectives for upgrading and reform, by creating a set of purpose-build financing vehicles -- so-called government guidance funds -- that are responsible for allocating public investment funds."
"As a report by McKinsey & Company puts it, this 'more market-based investment approach' is a 'bold experiment designed to improve the likelihood of success," the article said.
If "Made in China 2025" succeeds, the report said, "it will have laid the institutional foundations for new sources of growth. And, as the benefits of innovation are diffused throughout the economy, China will move closer to its goal: becoming a high-income country."
"China's experiments with industrial and financial policies may end up providing emerging economies with valuable insight into how to avoid the middle-income trap," the report concluded.
