Recently China has set a world
record for fastest long-distance bullet train, which clocked in at 350 kph (217
mph). This feat of engineering is the result of China’s decade long progress of
high speed transit due to a national focus in sunrise industries from their
“Made in China 2025” industry policy. For years, the Chinese government has
been concentrating funding and effort towards modernizing nine traditional
industries like shipbuilding, steelwork, etc. This new initiative, “Made in
Chine 2025,” targets ten new sectors like aerospace, new agriculture, etc.
Officials have established over a thousand state guided funds totaling $8.07
billion for such new industries.
This industry-policy is patchy and notoriously
so in China. One plan laid out hundreds of market shares at home and abroad,
making this action obviously outside the realm of domestic ability and thus
upsetting the EU Chamber of Commerce and World Trade Organization among others.
The WTO strictly limits local content rules regarding the semi-official
documents holding blurred guidelines, in addition to China’s hidden illegal
state aid. Foreign trade competitors such as South Korea and Germany worry this
new plan will steal business. China has always found ways to milk the joint
ventures out of these plans with little innovation to show.
Do you
think China is working in the frowned upon “gray area” of industry development,
or is it smart of them to do business this way if its proven so advantageous?
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