Is China's industrial policy working?

At first glance, China's industrial policy appears to be successful

Thanks to China's industrial policies, notably the “Made in China 2025” plan launched in 2015, large amount of resources has been devoted to promote home-grown innovation and the self-reliance in technology in order to reduce China's dependence from the West. The plan covers ten key industries, including information technology (IT), robotics, new energy, and biotech.

To this end, China has significantly increased its spending on research and development (R&D). While this accounted for 2% of gross domestic product in 2015, it had already risen to 2.6% by 2023, approaching the OECD average of 2.7%. China already spent more on R&D than the EU (2.1%), but still less than the US (3.5%). In absolute terms, adjusted for purchasing power, China's R&D spending already accounted for 95% of that of the US. By contrast, the EU only reached 61% of the US level.

Looking at the number of patents filed worldwide, China is already ahead of the US, with a share of 27% in 2022. Also, China has caught up particularly strongly in patents on information and communication technology (ICT) and biotechnology.

According to a study by the Australian Strategic Policy Institute (ASPI), China is the leader in 37 of the 44 technologies evaluated; often publishing more than five times as much high-impact research as its closest competitors in areas such as advanced manufacturing and materials, artificial intelligence (AI) and computing, energy and environment, quantum computing, biotechnology, defense, space, and robotics ( link to ranking ). A separate study by the Information Technology & Innovation Foundation (ITIF) shows that China is the global leader in electric vehicles (EV) and is close to the world leaders in AI, robotics, and quantum computing ( link to report ).

For full text see attached PDF-Version.