The global manufacturing landscape is witnessing a shift as China’s landmark industrial policy, ‘Made in China 2025’, enters a new phase. While the policy propelled China to dominance in high-tech manufacturing, it also triggered international concerns over trade practices. Meanwhile, India’s ‘Make in India’ initiative strives to boost manufacturing and reduce dependence on imports. Recent developments in Apple’s production strategy show the complex dynamics between these two manufacturing giants.
Background of Made in China 2025
Launched in 2015, ‘Made in China 2025’ (MIC2025) was China’s blueprint to upgrade its manufacturing sector. It aimed to transform China from the world’s factory of low-cost goods to a leader in advanced industries. The plan targeted ten core sectors, including electric vehicles, artificial intelligence, aerospace, agricultural technology, and high-tech maritime engineering. The policy emphasised innovation, technology, and self-reliance.
China’s Industrial Dominance and Global Concerns
China’s government provided massive support to domestic industries through subsidies, easy loans, and tax relief. This enabled Chinese firms to produce competitively priced goods and flood global markets. However, these advantages raised accusations of unfair trade practices. Foreign companies faced strict conditions in China, often compelled to share technology to access the market. This led to international criticism and fears of market distortions.
Why the Policy Became Politically Sensitive
Due to growing global backlash, Chinese leaders have downplayed public references to MIC2025. The policy became a diplomatic liability as many countries, especially in the West, viewed it as a tool for economic dominance rather than fair competition. The reluctance to openly discuss the plan reflects China’s attempt to avoid trade conflicts and sanctions.
Achievements of Made in China 2025
Despite controversies, MIC2025 has been highly successful. China leads global production in green technologies such as lithium-ion batteries and solar panels. It dominates electric vehicle manufacturing and boasts world-class high-speed rail systems. Advances in robotics and sensor technologies have closed the gap with global leaders. The policy also prioritised workforce upskilling and integrated supply chains.
Areas of Shortfall and Economic Impact
China fell short in semiconductor production and passenger aircraft manufacturing. The intense focus on industrial output limited growth in the services sector. This imbalance has implications for China’s long-term economic sustainability, as domestic demand and services remain underdeveloped compared to manufacturing.
Lessons for India’s Make in India Initiative
India’s ‘Make in India’ aims to develop manufacturing while leveraging its strong services sector. The country faces challenges in scaling up production and supply chains. China’s experience marks the importance of government support, innovation, and workforce development. However, India must also balance manufacturing growth with demand creation and service sector expansion to ensure sustainable development.
Recent Developments in Apple’s Manufacturing Strategy
Apple produces about 15% of iPhones in India, with plans to increase this to 25%. Foxconn, a key assembler, recently recalled many Chinese engineers from Indian factories. This move complicates India’s ambition to become a major manufacturing hub. It puts stress on the geopolitical and operational challenges in shifting production away from China.
Global Manufacturing Trends and Future Outlook
The rivalry between China’s MIC2025 and India’s Make in India reflects broader shifts in global supply chains. Countries seek to reduce dependence on any single nation. Green technologies and AI will shape future industrial policies. India’s challenge is to learn from China’s successes and avoid its pitfalls to build a resilient manufacturing ecosystem.
Questions for UPSC:
- Critically analyse the impact of China’s ‘Made in China 2025’ policy on global trade and manufacturing dynamics.
- Explain the objectives of India’s ‘Make in India’ initiative and compare its challenges with China’s industrial transformation.
- What are the implications of global supply chain diversification for emerging economies? Illustrate with examples from the technology sector.
- Comment on the role of government policy in encouraging innovation and manufacturing growth. How can India balance manufacturing with service sector development?
Answer Hints:
1. Critically analyse the impact of China’s ‘Made in China 2025’ policy on global trade and manufacturing dynamics.
- ‘Made in China 2025’ aimed to upgrade China’s manufacturing from low-cost to high-tech industries.
- Policy focused on 10 core sectors including AI, electric vehicles, aerospace, and green technologies.
- China gained dominance in lithium-ion batteries, solar panels, electric vehicles, and high-speed rail.
- Heavy government subsidies and support led to accusations of unfair trade practices globally.
- Foreign firms faced barriers like forced technology transfer to access Chinese markets.
- International backlash caused China to downplay the policy publicly to avoid sanctions and trade conflicts.
2. Explain the objectives of India’s ‘Make in India’ initiative and compare its challenges with China’s industrial transformation.
- ‘Make in India’ launched in 2014 to boost manufacturing, design, and innovation in India.
- Aims to reduce import dependence and develop India as a global manufacturing hub.
- India has a strong services sector but lags in manufacturing scale and supply chain integration.
- Challenges include infrastructure gaps, workforce skill deficits, and attracting large-scale investment.
- Unlike China’s heavy subsidies and protectionism, India emphasizes ease of doing business and market reforms.
- India can learn from China’s focus on R&D, workforce upskilling, and integrated supply chains but must balance manufacturing with services growth.
3. What are the implications of global supply chain diversification for emerging economies? Illustrate with examples from the technology sector.
- Supply chain diversification reduces dependence on a single country, enhancing resilience against geopolitical risks.
- Emerging economies like India benefit by attracting foreign investment and technology transfer.
- Apple’s shift of iPhone production to India exemplifies diversification away from China.
- Diversification can boost local manufacturing capabilities, employment, and export potential.
- Challenges include building infrastructure, skilled labor, and regulatory clarity to compete globally.
- However, sudden policy or operational changes (e.g., Foxconn recalling Chinese engineers) can disrupt progress.
4. Comment on the role of government policy in encouraging innovation and manufacturing growth. How can India balance manufacturing with service sector development?
- Government policies provide subsidies, tax relief, and infrastructure to lower production costs and attract investment.
- Policies should promote R&D, workforce skill development, and technology adoption for innovation-led growth.
- China’s success shows the importance of integrated supply chains and focused sectoral development.
- India must leverage its strong services sector while scaling manufacturing to avoid economic imbalance.
- Balanced growth requires policies that stimulate domestic demand, support startups, and encourage cross-sector collaboration.
- Ensuring ease of doing business and stable regulatory environment encourages sustainable industrial expansion.
