Made in China 2025: where to now? 

24.11.20 10:52 AM Comment(s) By Jonathan Faurie

China's influence on the world is growing daily

About a year in Donald Trumps Presidency, he found himself embroiled in a major war of attrition with China. While no violence was committed, relations between the two countries was precariously balanced on a knife edge with major allegations (from Trump) that China was embarking on a major espionage campaign that was being driven by Huawei. Later, there were allegations of coordinated cyber attacks from Beijing that affected high level US targets.


Chinese President, Xi Jinping, denied all of Trumps accusations saying that the reason behind the war of attrition is vastly different from the presented facts. Xi pointed out that the war of attrition was over China’s Made in China 2025 programme. At this stage, China had become the worlds second biggest economy and the country laid out a growth plan that would sustain the economy’s growth. Part of this plan was that 80% of the worlds technology would be produced and distributed by Chinese companies by 2025. This obviously has major ramifications for Silicon Valley which is a significant driver of the US economy. Xi went on to add that Huawei was being targeted because it was pioneering tech that Apple and Samsung were not; the fact that the company faced opposition in Australia and New Zealand over its 5G expansion plans suggests that Xi was not far off the mark. Would Apple or Samsung have faced similar opposition had they been the pioneers?


US sanctions aside, the Chinese economic beast is large enough to be self sustaining and Chinese companies have the whole of Asia as a possible market to drive its ambitions. Where to now for the Made in China 2025 programme?


Shadow games

One of the ways that China is approaching its world domination is through subliminal influencing. Changing behaviours and making it acceptable is almost a passive way of asserting your dominance and not drawing attention to the fact that you are influencing the global market. I recently read an article by the BBC which showed how this is taking place.


The article points out that for more than 30 years, a small parcel of land covering about 45 square miles (116sqkm) has had an outsized impact on the way we work, live and play.


California’s Silicon Valley shapes our lives. From the websites where we do our household shopping to the video-streaming services we watch to the companies which provide our email, almost all are based in this corner of the United States.


The article adds, until recently, that is. The rise of TikTok, an app whose parent company is the Chinese firm ByteDance, has struck at the heart of Silicon Valley’s supremacy. Along with other digital products coming out of China, TikTok has the potential to reshape the future of technology – a future in which the culture, and the interests, of Shanghai or Beijing could mould the industry more than that of San Francisco Bay.


It’s hard to overstate just how much of a switch this is.


“The narrative previously was about China coming up with its own versions of [Western] digital products,” Elaine Jing Zhao, Senior Lecturer in the School of the Arts and Media at the University of New South Wales in Australia told the BBC.


“Nowadays, you see the narrative shift towards how Western social media platforms are learning from Chinese social media platforms.”


And Chinese apps, platforms and services currently look quite different from those in the West.


The rise of Chinese tech

The BBC article points out that the most famous, of course, is TikTok – which has 690 million monthly active users worldwide, 100 million of whom are in the United States and a further 100 million in Europe.


Like other apps of Chinese origin, TikTok’s owners have tried to downplay the app’s background. “They want to give international users the impression they are not Chinese platforms, but global platforms,”  Jian Lin, Assistant Professor at  the University of Groningen in the Netherlands told the BBC, an author of multiple books on the Chinese influencer industry and technology platforms. “They really want to transmit this impression to the public that they’re not necessarily Chinese. They’re just like others, a global platform.”


The article adds that their fear of backlash has been borne out by the hard stance US President Donald Trump has taken against the app, who claimed without significant evidence it’s a national security risk. Other countries to oppose TikTok include India, where the app was banned in June 2020, and Pakistan, which banned it for 10 days in October.


But these challenges seem unlikely to dissuade other Chinese tech companies from following TikTok’s lead, Lin told the BBC. “I do believe Chinese companies will become even more ambitious and stronger in the coming years,” he says.


The article points out that he also expects these companies to increase their global ambitions: since the Chinese domestic tech market is highly saturated, with strong levels of competition, they may see more opportunities coming from the overseas market.


Changing Western tech

The article points out that, already, the way Chinese-launched apps interact with users, and the services they offer within the apps, are influencing Western platforms. One example: the “superapp”.


“In China it’s very common to become a superapp, where you do a lot of different things within the same app,” Fabian Ouwehand, Founder of Many, a Dutch social marketing agency that advises companies and influencers on how to use TikTok and its Chinese version, Douyin told the BBC.


Perhaps the most popular combination? Social media and commerce. “In China people are used to the commercialised version of social media entertainment, and do a lot of ecommerce and business through their apps,” says Lin.


The article adds that, on Douyin, for example, users can buy products directly from the app as they watch the shortform videos that creators post onto the platform – something TikTok in the West is mimicking through the introduction of integration with online shopping platform Shopify, launched in October 2020. WeChat, which is often described solely as a chat app, is far more: it’s also a payment platform and a way to keep up to date with friends.


The reason superapps have become so popular in China is simple, says Zhao. “People feel it’s really convenient to have every part of their life organised by social media platforms and superapps,” she says. “From shopping online to hailing taxis, socialising with friends and meeting up with strangers, everything you can do within one app.”


This kind of approach requires handing over more data to link up disparate systems into a single, convenient place for users – something that not everyone might be comfortable with. But experts believe that the demographics are on the side of app developers. “Younger users will accept it quicker than the older generations, who are a little bit wary,” says Ouwehand. “They value convenience over privacy.”


The article points out that western companies are taking note. Platforms like Facebook have begun to bring various features and services under a single umbrella: in recent years, Facebook has integrated online video (Facebook Watch) and shopping (Facebook Marketplace) into its core social network. Instagram, owned by Facebook, has added TikTok-like shortform repeating videos, called Instagram Reels, in recent months, and also has a connection with Shopify so fans of influencers can buy products their favourites wear directly in the app..


“I’m seeing more and more companies trying to add more features into their apps,” Rui Ma, a Chinese Tech Expert based in Silicon Valley told the BBC. “That’s probably the biggest overt move that looks a little bit more like Chinese tech.”


Enhanced moderation

The article points out that, behind the scenes, there are other differences that could also make meaningful change.


TikTok has been criticised for its approaches to disabled and overweight creators, whose videos it has been alleged to de-prioritise – a legacy of moderation policies drawn up by staff in China. The app says it has since redrawn its policies on moderation to accommodate a more open, less censorious Western taste and culture.


The article adds that, despite localising its content moderation policies, TikTok remains much more proactive than Western social platforms in intervening where it sees potentially troubling content. The company’s September 2020 transparency report shows that, of the 104 million videos removed from TikTok in the first half of 2020, 90.3% were removed before they received any views – and 96.4% were taken down by the app itself, before being alerted to infringing content by another user.


Compare that to the content moderation policies of, say, YouTube. Until the coronavirus crisis compelled YouTube to rely far more on automated moderation rather than human intervention, the app lagged a little behind TikTok on its proactive takedowns of videos. In the three months between April and June 2020, the most recent data available, 95% of videos were taken down by “automated flagging”, though only 42% had no views before they were removed.


Algorithmic recommendations

The article points out that another way in which Chinese social media platforms are influencing Western ones is in how they present and filter information.


While Facebook and Twitter recommend posts based on what your friends are posting and sharing on your news feed, TikTok and other Chinese apps like it try to learn as much as it can about you, and then direct content to you they think you’ll like. “In China you see a lot of different platforms coming up that are way more focused on exploration, and here it’s a lot on your social circle,” says Ouwehand.


The article adds that this model understands our preferences based on prior behaviour with videos we’ve already seen, rather than assuming our interests based on those we interact with or via our past search terms. It’s a meaningful difference that is shaping the way we consume information, and changes the economics of those creating the content.


Under the Chinese model of algorithmic exploration and recommendation, users are less beholden to the individual content creators they follow. On YouTube, for examples, big personalities have become celebrities because of their ability to build a loyal fanbase. But on TikTok, anyone can become a star overnight because of a single video that proves popular with the app’s algorithm – and that fame can disappear almost as quickly when the next big video is surfaced through the app’s code.


The article points out that, given how popular that strategy has been, it could signal a broader change among other social media platforms, as well.


The future of tech

The article adds that if Chinese companies continue to play an increasingly influential role in tech, our online world could look very different by, say, 2030.


For one, it could be much more diversified than the Silicon Valley standard we still, largely, see now. And while Chinese apps are best-known right now, that could change. “It’s not just Chinese companies, but other companies in Asia,” says Zhao. “These regional giants might want to have a slice of the global market pie as well. We’re seeing Facebook and Google competing for a slice of the Asian market, but at the same time local giants are entering the US market as well.”


The article points out that we might also see apps having an increased emphasis on localisation, something we already see with TikTok. “If you want to be a global company, you’re serving different consumers with different cultural tastes,” Zhao told the BBC.


And we may see Western products taking more of a lead from successful strategies or services out of China, and the rest of Asia. “That’s where the West is going to copy a lot,” says Ouwehand. “In terms of functionalities and the expansion of their own apps to do more.”


The article adds that the future of technology in the next decade will certainly look a lot less like the Silicon Valley-designed ideal we’ve been used to in the last 20 years. But it seems likely it will evolve through small steps and minor influences – as evidenced through the way TikTok differs from Douyin, and the lag in changes in the Chinese version of the app making their way to the Western one.


This is, after all, how a globalised world works, Zhao told thew BBC. “It’s an example of cross pollination. Doing business is always about drawing inspiration from each other,” she says.


More insight

What more can we expect form this plan? An article by Al Jazeera provided some additional insight.


Dual circulation; the Al Jazeera article pointed out that this is a concept Xi first mentioned in May, and has now become part of the plan for the next five years.


In essence, Beijing is saying it wants its future growth to be based mostly on internal cycles of production, consumption and distribution of goods and services.


The article added that, faced with a punishing trade war with the US and a government that wants to contain the rise of Chinese technology giants like Huawei – the global leader in the latest generation mobile telecommunications equipment – it is little surprise that China is turning inwards for its economic progress. With a middle class of about 400 million people, it can afford to do so.


The article pointed out that it acknowledged that China now faces a “complicated international situation”, something that is unlikely to change whoever wins the US presidential election on November 3.


But China is also keen to stress that it is not turning its back on the outside world and that it wants to continue to engage in international trade, the now de-emphasised, less well-defined second part of the dual-circulation strategy.



The article added that a cornerstone of the current 13th plan has been “Made in China 2025”, a push to nurture and develop high-tech industries.


The new plan calls for a continuation of that strategy, putting innovation at the heart of China’s modernisation drive.


“Making major breakthroughs in core technologies in key areas, China will become a global leader in innovation,” Xinhua said.


The article pointed out that developing homegrown technologies such as robotics and artificial intelligence is at the heart of China’s shift towards greater self-reliance [File: Aly Song/Reuters]According to analysts at global banking giant HSBC, the 14th plan will aim to strengthen industrial supply chains that were disrupted during the early stages of the pandemic, using technology to become more self-reliant in this respect.


“In our view, this means there will be more of a policy push for higher [research and development] spending in the coming years, especially in strategically emerging sectors such as biotechnology, semiconductors and new energy vehicles,” Qu Hongbin, chief China economist at HSBC, said in a research note sent to Al Jazeera.


A new frontier

If we are being honest, Chinese tech has already taken over the majority of the world and is having a major influence on the way that we do things and live our lives. In this space, China has achieved its goal and we will use Chinese tech if it is safe, well made and comparable to tech that is produced elsewhere in the world.


So where does China go next? I recently read an article which points out that Beijing is targeting the automotive sector. 


The article points out that China aims to have vehicles with partial self-driving technology account for 50% of all new-auto sales by 2025, double its previous goal, as the country encourages local companies to pull ahead of the U.S. in the field.


Under a plan released Wednesday, new vehicles with "level 2" or "level 3" automation are to make up 70% of sales by 2030. Level 2 assists the driver with steering, acceleration and braking, while level 3 means vehicles drive themselves under certain conditions such as on highways.


The article adds that China in 2017 called for level 2 and 3 vehicles to make up 25% of new-car sales in the world's largest auto market by 2025. Beijing considered raising the target to 30% last year, but is hitting the gas pedal now as China positions autonomous and "new energy" vehicles as a strategic emerging industry.


About 10% of new vehicles sold in China during the first half of 2020 carry level 2 automation, local media report.


The new plan also seeks to have level 4 autonomous vehicles, which require no human input except in emergencies, on the market by 2025 and account for 20% of sales in 2030. China looks to expand use of high-level self-driving technology nationwide by 2035 and integrate such vehicles into so-called smart cities.


The article points out that China will enact policies and legislation based on this road map, released by the National Innovation Center of Intelligent and Connected Vehicles at the direction of the Ministry of Industry and Information Technology.


Beijing is counting on Chinese tech companies to make this vision a reality.


Search engine company Baidu has received state support for its Apollo self-driving technology project, launched in 2017. Trials of an autonomous taxi service are underway in Hunan and Hebei provinces and parts of Beijing. Didi Chuxing, China's largest ride-hailing company, is testing a similar service in Shanghai.


Tech names ranging from startups like to giants such as Alibaba Group Holding and Tencent Holdings are increasing development in the field.


The article adds that though Tesla and Toyota Motor have led the way among automakers, Chinese players such as Geely Automobile Holdings, part of the group that owns Sweden-based Volvo Cars, are pushing into the fray as well. Nearly 100 new models with level 2 technology reportedly were rolled out in the first nine months of 2020, according to Chinese media.


On the regulatory side, with the commercialization of level 3 vehicles on the horizon, China is considering easing rules as early as next year to allow self-driving vehicles on public roads.


The reason why the US went to war in Vietnam, and the reason that it engaged in the Cold War, was that it was vehemently opposed to communism. For that, the US was seen by many as a beacon of hope and freedom. Is this not influence?  Throughout history, there have been international influencers that have shaped the way that we live. Perhaps it is China’s turn. 

Jonathan Faurie

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