Is Beijing going back to the future with its much-hyped ‘Made in China 2025’ plan?
Washington has singled out the industrial strategy in its trade row but precedent points to trouble on the ground
When the eastern Chinese city of Huzhou announced the recipients of its “Made in China 2025” subsidies last year, one of the biggest winners was milk tea maker Xiangpiaopiao.
The company, best known for its ubiquitous instant drinks, walked away with 16.56 million yuan (US$2.49 million), or about 10 per cent of the city’s funds for the scheme, to set up a new “smart” liquid milk tea factory.
Made in China 2025 is the central government’s big plan to move China up the global value chain and establish it as the dominant force in the technologies of the future.
Washington sees it as a well-defined, well-orchestrated strategy and seeks to undermine it with tariffs imposed late last week.
But Lu Jiun-wei, a deputy researcher with the Taiwan Institute of Economic Research, said using Made in China 2025 subsidies for milk tea production reflected an old patten of “there’s a policy above, and there’s a way below”, meaning well-intended policy could be distorted during implementation.