Made in China 2025: How German Companies Can Benefit

24 August 2016 – The Chinese mainland’s “Made in China 2025” strategy focuses on the automation and digitisation of industry and offers German companies and investors many opportunities for cooperation.

The Central People’s Government in Beijing launched the “Made in China 2025” initiative last year in order to boost economic growth, largely through the adoption of new technology. The goal of the initiative is to upgrade the mainland’s manufacturing industry over the next decade. Similar to Germany’s “Industry 4.0” plan, the Chinese government is hoping that the country will become more innovative by placing increasing emphasis on the qualitative aspects of production in addition to its current competitive quantitative advantages.

The initiative will promote the automation of manufacturing processes and introduce new technologies such as big data, sensors and cloud services. The mainland also plans to attach particular importance to sustainable production. The significance of the initiative was emphasised earlier this year in China’s 13th Five Year Plan, which serves as a blueprint for the nation’s economic and social development up to 2020. The government’s guidelines aim to transform business through structural reforms and upgrade industrial production by delivering significant technological progress, improving environmental protection, and raising living standards.

New business opportunities for German firms

The “Made in China 2025” strategy is expected to generate an unprecedented level of influential Chinese innovations, providing German companies with a wide range of business partnership and investment opportunities. One aim of the Chinese initiative is to improve the mainland’s technological know-how and process optimisation in various industries, in part by strengthening ties with overseas tech companies. The mainland will also continue to promote the introduction of industry standards. “The Chinese mainland’s demand for Industry 4.0 technologies and quality standards offers German companies interesting sales opportunities and the chance to achieve long-term market penetration, as they possess wide-ranging expertise related to future industrial production. When establishing a partnership, clear conditions need to be stipulated to ensure that both parties benefit from the income generated by shared value,” said Jenny Koo, Director of Service Promotion at the Hong Kong Trade Development Council (HKTDC), which, for the past 50 years, has been promoting Hong Kong as a platform for international companies to tap the mainland Chinese and Asian markets by partnering with Hong Kong firms.

China also offers German companies an excellent environment for hi-tech serial production, such as the manufacturing of products developed in Germany. “I am confident that over the next few years, both Germany and China will be able to co-exist on a level playing field as successful industrial powerhouses, and that both countries will benefit,” said Ms Koo. “Due to its favourable location and free port status, Hong Kong is a particularly good entry point for German firms that want to develop or expand their business in China or Asia.” Under the principle of “one country, two systems” for Hong Kong’s return to China in 1997, the city continues to be rated as the world’s freest economy and is also ranked top in the Swiss-based IMD World Competitiveness Yearbook 2016.

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