Summary of Made In China 2025 in the Eyes of a Taiwanese Businessman

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  • Controversial

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Manufacturing and export of basic consumer goods like clothing, shoes and consumer electronics fueled China’s economic growth since the 1980s. As China’s growth slows down, it aims to level up manufacturing by moving toward high-tech industries such as electric cars, aerospace and advanced medical devices. This goal gave birth to Made in China 2025, China’s grand 10-year strategy to become a world powerhouse in high-tech manufacturing. Foreign nations and firms see the plan as an aggressive move to shift global power in China’s favor. Many believe China’s strategy to be unfair to foreign companies in China, and some believe China’s aspirations may pose a security threat to other nations. Within China, people are skeptical whether Made in China 2025 will be successful. In this article from the Taihe Industry Observer, senior editor Tai Fangwu reports on his interview with Taiwanese businessman Zhang Zhongshen about current economic issues pertaining to Made in China 2025. Zhang’s perspective is unique in that he is an outsider with a deep understanding of the country. His insights will benefit anyone who wants to look more closely at China’s economic and financial situation. 

About the Author

Tai Fangwu is the senior editor for the Taihe Industry Observer, which offers industry reports and analysis of China’s high-tech manufacturing and military industry. 

 

Summary

“Zhang Zhongsheng” was born in Taiwan to a family that has been in the electronics business for generations. He worked in investment banking, then quit to build a chain restaurant. In 2015, he expanded to mainland China and relocated to Shanghai. As a businessman, Zhang is a keen observer of China-Taiwan relations and Chinese economic issues. Here are some of his views on Made in China 2025:

To grow China’s high-tech industry, he believes, financing of new businesses will be crucial. But China’s current financing system isn’t set up for funding most small and midsize companies (SMEs). China's government requires the Big Four state-owned commercial banks to offer SME loans to the high-tech industry. But those smaller deals are hardly worth the banks' time. To reach the government-prescribed target anyway, the Big Four have allocated funds to peer-to-peer (P2P) lending companies and put them in charge of high-tech industry SME loans. However, the Big Four have very little regulatory power over the P2P lending companies, many of which became insolvent or were scams. China needs to establish separate...