Last year China’s president Xi Jinping described science and technology as “the main battlefields of the economy,” a sentiment echoed this month at meetings of the National Peoples’ Congress. As the Financial Times noted on Sunday, this vision is behind the country’s Made in China 2025 initiative which hopes to transform China’s low-value, labor-intensive manufacturing into a force to develop smart technology. The plan provides US$300 billion in low-cost loans, research funds and other aid for emerging industries.
But the program is stoking fears of threats to national security abroad, and frustrating multinational companies and trading partners with unfair trading practices. China’s growing civilian-military cooperation has led the US Committee on Foreign Investment (Cfius) to step up investigations into Chinese oversease M&A activity, effectively killing several high-profile deals last year including bids for Dutch firm Philips, and Germany’s Axitron. Most observers expect scrutiny to intensify. Trade groups also call foul on the unfair advantages the plan gives to local firms and the emphasis on technology transfer.
Miao Wei, head of the Ministry of Industry and Information Technology defended the push for self-sufficiency in high-tech fields on Sunday, and claimed that China will “still open up and welcome foreign companies to China,” reports the New York Times. You can bet it will have to be on better terms if they expect the US and Europe to stay open to Chinese companies.