Xi Jinping’s ‘Made in China 2025’ Plan Is Becoming a Reality: This Is How the Nation Is Dominating Key Technologies of the Future

Tensions between the U.S. and China have been ongoing for more than five years, largely due to their rivalry for global supremacy. This rivalry is widely recognized. In fact, the Biden administration explicitly acknowledged it in its 2022 National Defense Strategy document, which states that China possesses both the capability and resources to challenge the U.S. for world leadership.

A key excerpt from this document clearly illustrates why the U.S. government views China as a threat: “[China] is the only competitor with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to do it. Beijing has ambitions to create an enhanced sphere of influence in the Indo-Pacific and to become the world’s leading power.”

Under Xi Jinping’s leadership, China has seen significant social, economic, military, and technological development over the past two decades. The Asian country currently leads the world in five key strategic technologies, which are crucial now and in the future. Additionally, it continues to make strides in several other areas. However, China still appears to be struggling to achieve dominance in one sector: semiconductors.

Five Strategic Technologies Where China Has a Leading Position

The goal of the sanctions imposed by the U.S. and its allies over the past two and a half years has been to hinder China’s development of the semiconductor industry. As such, the governments of the U.S., the Netherlands, and Japan have prohibited their lithography equipment manufacturers (such as ASML, Tokyo Electron, and Applied Materials) from selling advanced machinery to Chinese customers.

Chinese lithography equipment manufacturers have the government’s support to develop extreme ultraviolet lithography machines. However, experts believe these complex machines won’t be ready for at least five years. Moreover, several semiconductor professionals, including those from China, suggest that the country is lagging behind the West by about five to ten years in photolithography equipment development.

Although China doesn’t lead in semiconductor chip production, it excels in other technologies. These include unmanned aerial vehicles, solar panels, graphene, high-speed rail, electric vehicles, and lithium batteries.

This is illustrated in a graph created by Jostein Hauge, an economics professor at the University of Cambridge, using data from Bloomberg Intelligence and Bloomberg Economics.

China’s leading position in several technological areas can be traced back to the “Made in China 2025” plan, which was announced by the Chinese president in 2015. A decade ago, China had a strong foundation in certain technologies, such as solar panels and the practical applications of graphene.

The success of this strategy is undeniable. It’ll continue to enable China to compete closely with other major powers for leadership in critical technologies such as semiconductors, quantum computers, artificial intelligence, and robotics, all of which hold significant strategic importance.

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China’s Dominance is Undisputed

“Made in China 2025” has a clear purpose: to transition from being the world’s factory to becoming the world’s largest supplier of services and high-value products. While China has struggled to take the lead in areas such as integrated circuits, artificial intelligence, robotics, commercial aircraft, and drugs, its dominance in the solar panel market is overwhelming.

China holds nearly 80% of the global photovoltaic cell market, and currently, only India appears capable of potentially disrupting this dominance in the long term. China’s manufacturing capacity is 17 times greater than that of the rest of the world combined, prompting the government to support the production of over 1,000 GW of N-type cell capacity as other countries work towards meeting their net emissions commitments. However, many Chinese solar panel manufacturers are currently selling at a loss to achieve rapid growth.

Moving on to unmanned aerial vehicles, China controls 90% of the global market for consumer and professional drones. This dominance has been fueled by the success of manufacturers such as DJI, FIMI, and Autel Robotics, among others. China’s stronghold in the drone and solar panel sectors is the result of a strategy combining government support, continuous technological advancements, and highly competitive pricing.

The graphene market follows a similar trajectory. China produces 60% of the world’s graphite because it has the largest natural reserves on the planet. The Chinese government considers graphene, which derives from graphite, a strategic material. As such, it’s invested in research to develop applications across electronics, medicine, energy, and advanced materials. Additionally, large-scale production enables China to manufacture graphene at competitive prices, further pushing many competitors out of the market. These factors allow China to control 83% of the Asian and Pacific graphene market.

Lastly, China also emerges as the clear leader in high-speed rail, with a network spanning nearly 30,000 miles. According to government forecasts, the network is expected to reach more than 37,000 miles of high-speed tracks by 2030. In contrast, the next longest system is the one in Spain, which currently has around 3,300 miles of high-speed rail. In the U.S., there are only 230 miles of operational high-speed lines.

China’s dominance in this area is again the result of rapid technological development and substantial government investments. The China State Railway Group recently announced plans to invest more than $82 billion in the development of new high-speed railways in 2025.

It’s also essential to explore China’s electric car market and lithium battery industry. China is currently the world’s largest electric vehicle market. In 2025, more electric cars are expected to be sold in China than combustion-engine cars for the first time, largely due to government subsidies.

Moreover, China is the leading exporter of electric vehicles globally. In 2023, it exported around 1.7 million electric vehicles, representing more than 30% of its total car exports. However, its international expansion is significantly hampered by tariffs imposed by the U.S. and the European Union, among other regions that struggle to compete with Chinese electric cars.

Additionally, China is a world leader in lithium battery production. The Asian nation produces 57% of the batteries used in electric cars. In 2023, the two largest lithium battery manufacturers globally, CATL and BYD, held market shares of 34% and 16%, respectively.

China has achieved this leading position due to several factors. First, it’s the world’s largest producer of lithium and rare earths, the primary raw materials used in battery manufacturing. Second, the nation controls the processing of these materials and can produce batteries on a large scale at very competitive prices. Overall, there are currently no signs that its dominance in lithium battery production will be challenged in the medium term.

Image | Yue Chan

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