BEIJING, China – As 2025 marks the culmination of the ambitious "Made in China 2025" strategic plan and the end of China's 14th Five-Year Plan (2021-2025), a decade has passed since the State Council officially unveiled its blueprint for upgrading Chinese manufacturing in May 2015. This bold initiative was designed to transform China from a "manufacturing giant" into a "manufacturing powerhouse," and its journey, surprisingly, began with a humble ballpoint pen.

 
The "Ballpoint Pen Humiliation" and the Spark of a National Strategy

The genesis of China's audacious national strategy to become a manufacturing powerhouse was ignited by an unexpected incident: the "ballpoint pen core incident." In January 2016, then-Premier Li Keqiang, during a symposium on the coal and steel industries, lamented a stark paradox. "How is it that China, a nation capable of building aircraft carriers and launching spacecraft, cannot produce a simple ballpoint pen tip?" he questioned. This was a critical revelation for a country that prided itself on being the world's largest steel producer. Despite its immense capacity in steel, China was unable to domestically produce the 0.5mm stainless steel ball used in ballpoint pen tips and had to import the specialized stainless steel wire annually.

This seemingly minor issue sent shockwaves across China, quickly becoming known as the "ballpoint pen humiliation." At the time, China was home to 3,000 ballpoint pen manufacturing companies, collectively producing 40 billion pens annually, accounting for 80% of the global supply. However, a staggering 90% of the core technology—the pen tips—was imported. While a Chinese-made ballpoint pen had an average export price of merely $0.03, famous American brands sold the same pens for over $10. This stark contrast highlighted a painful truth: it was not Chinese companies profiting most from "Made in China" products, but rather foreign enterprises holding the key technologies and intellectual property.

 
From "Big but Not Strong" to a Three-Stage Ascent

Premier Li's admonishment galvanized the Chinese steel industry. Teams dedicated themselves to ballpoint pen tip development, and within a year, China successfully unveiled a 100% domestically produced ballpoint pen. This symbolic achievement laid bare the reality of Chinese manufacturing: "big but not strong" (大而不强), characterized by weak foundational technological capabilities. It ignited a nationwide sense of urgency for "technological self-reliance."

To ascend as a manufacturing powerhouse, the Chinese government unveiled a three-stage strategy. The first stage, "Made in China 2025," aims for 70% self-sufficiency in core materials and components by 2025. The second stage targets surpassing Germany and Japan by 2035, and the final stage envisions China overtaking the United States to become the world's strongest nation by 2049, coinciding with the 100th anniversary of the founding of New China. "Made in China 2025" represents the critical first phase of this ambitious roadmap.

 
"Made in China 2025": A Decade of Progress and the Cultivation of Strategic Industries

"Made in China 2025" is more than just an industrial promotion policy; it is a strategic move to transform China from a manufacturing giant into a high-tech powerhouse. Benchmarking Germany's "Industry 4.0" strategy, the plan prioritizes technological self-reliance and industrial restructuring. To achieve these goals, the government identified ten strategic pillar industries for focused development and aimed to increase their domestic content rate to over 70% by 2025. These industries include:

New-generation Information Technology: Encompassing semiconductors, integrated circuits, big data, cloud computing, and artificial intelligence. This sector is crucial for digital transformation across all industries.
High-end CNC Machine Tools and Robotics: Developing advanced manufacturing equipment and industrial robots to enhance automation and precision in production.
Aerospace Equipment: Focusing on commercial aircraft, aircraft engines, and satellite development, aiming to reduce reliance on foreign suppliers.
Ocean Engineering Equipment and High-tech Ships: Building advanced marine platforms, including offshore oil and gas equipment, large cruise ships, and specialized vessels.
Advanced Rail Transit Equipment: Developing high-speed trains, urban rail transit systems, and related components, striving for global leadership.
Energy Saving and New Energy Vehicles: Promoting electric vehicles, hybrid vehicles, and fuel cell vehicles, along with their key components like batteries and motors.
Electrical Equipment: Including smart grid equipment, power generation equipment, and transmission and distribution technologies.
Agricultural Equipment: Modernizing agricultural machinery to improve efficiency and productivity in the agricultural sector.
New Materials: Focusing on high-performance alloys, advanced ceramics, composites, and other cutting-edge materials vital for various industries.
Bio-medicine and High-performance Medical Devices: Developing innovative drugs, vaccines, and advanced medical equipment to meet domestic demand and global health challenges.
 
Tangible Achievements Across Key Sectors

Ten years later, amidst the escalating US-China technological rivalry, the achievements of "Made in China 2025" are evident across multiple sectors:

Shipbuilding: China has emerged as a global leader in shipbuilding. In 2024, Chinese shipbuilders secured a record-breaking volume of orders, accounting for an astounding 70% of the world's total new vessel contracts. This dominance extends from large container ships and oil tankers to increasingly complex and higher-value liquefied natural gas (LNG) carriers, where China is rapidly closing the gap with traditional leaders like South Korea. Investments in smart shipyards and advanced manufacturing techniques have further solidified China's position.

Electric Vehicles (EVs): BYD (Build Your Dreams) has become a formidable force in the global automotive industry. By 2023, BYD's global sales surpassed 3 million vehicles, establishing it as the world's largest automotive company by sales volume, a remarkable feat largely driven by its comprehensive EV ecosystem that includes battery manufacturing. This success has challenged established automotive giants and redefined the competitive landscape.

Batteries: According to SNE Research, an energy-focused market research firm, CATL (Contemporary Amperex Technology Co. Limited) held a dominant 37% share of the global battery market in 2023, solidifying its position as the world's leading battery manufacturer. CATL's advancements in battery technology, including innovative chemistries and manufacturing processes, have been pivotal in fueling China's EV boom and its broader energy transition.

Smartphones and Operating Systems: In the smartphone arena, Huawei's HarmonyOS has remarkably surpassed Apple's iOS in the Chinese market. This achievement is significant as it demonstrates China's ability to develop its own robust software ecosystems, reducing reliance on foreign platforms and creating a localized competitive environment. This reflects a broader trend of technological self-reliance in software and digital infrastructure.

Artificial Intelligence (AI): The emergence of DeepSeek's cost-effective AI model in January 2025, which surprised the world with its performance-to-price ratio, underscores the growing prowess of China's burgeoning tech companies in AI. China has heavily invested in AI research and development, aiming to become a global leader in this transformative technology, with applications ranging from smart city management to autonomous driving and healthcare. The country's vast data resources and large talent pool provide a fertile ground for AI innovation.

Other High-Tech Sectors: Beyond these examples, China has secured global competitiveness in various other high-tech domains. BOE Technology Group has become a leading force in displays, challenging established players and achieving significant market share in LCD and OLED panels. DJI, the world's largest drone manufacturer, continues to innovate in civilian and commercial drone technology, showcasing China's strength in niche high-tech products. China's high-speed rail network is the largest and most advanced in the world, a testament to its engineering capabilities. Furthermore, significant strides have been made in space exploration, including lunar missions and the construction of its own space station, demonstrating advanced capabilities in rocket technology and space systems.

 
Challenges and the Path Forward: "Smart Manufacturing 2025"

Despite these impressive achievements, "Made in China 2025" has not been without its challenges. Reliance on foreign countries for core components such as advanced semiconductors and high-precision equipment remains high. Furthermore, the government-led investment approach has, in some instances, led to overcapacity and the emergence of financially struggling enterprises in certain industries. These side effects highlight the complexities of large-scale industrial policy implementation.

Nevertheless, China's determination to build a self-reliant technological ecosystem is unwavering. Its vast domestic market, substantial investments in research and development, and aggressive talent attraction strategies signal China's increasing involvement in shaping the global technological order.

 
The US-China Tech Rivalry and its Implications

The rapid ascent of "Made in China 2025" and China's technological ambitions have sharply escalated concerns in the United States, serving as a catalyst for a more assertive US strategy to counter China's technological rise. During his first term, President Donald Trump initiated measures to sanction Chinese tech giants like Huawei and ZTE, restricting their access to critical semiconductor equipment and software. The US-China trade war, which began in earnest in 2018, saw the imposition of high tariffs on Chinese imports, further intensifying the economic friction. As of 2025, the Trump administration in its second term is pursuing even more stringent policies aimed at curbing China's technological progress, effectively blocking the export of advanced technologies to China.

This escalating tech rivalry has profound implications for global supply chains and technological cooperation. China, in response, is accelerating its efforts to prepare for "decoupling" from the US and to achieve greater industrial internalization by replacing imported products with domestically produced alternatives.

 
The Evolution to "Smart Manufacturing 2025"

Discussions at China's "Two Sessions" (the National People's Congress and the Chinese People's Political Consultative Conference) in March 2025 highlighted "scientific and technological innovation" as a central theme. The government's work report indicated increased investments in emerging fields such as biotechnology, quantum technology, artificial intelligence, and 6th generation mobile communication (6G), alongside a push for the smart digital transformation of manufacturing. In line with national strategies, smart robots are becoming increasingly common in both homes and factories across China. 

China is rapidly transitioning its industrial structure towards an "America-free Chinese economy," emphasizing innovation. The US-China tariff war has also accelerated the relocation of manufacturing outside of China, presenting both challenges and opportunities for global supply chains. For China, this industrial restructuring is a matter of survival.

Building on the foundation of "Made in China 2025" and addressing its limitations, China is now pushing forward with the "Smart Manufacturing 2025" strategy, a key component of its Manufacturing Powerhouse Construction Strategy (2021-2035). This new phase emphasizes technological self-reliance and global standard leadership. The core of this strategy involves a comprehensive digital transformation based on AI, big data, and 5G. This entails a phased development of traditional manufacturing towards automation, digitalization, and intelligentization. Key pillars include the establishment of AI and IoT-driven smart factories, the expansion of digital industrial parks, and the creation of a complex manufacturing ecosystem that seamlessly integrates domestic demand with export capabilities. This strategy is expected to be further strengthened by its integration with the "dual circulation" economic model, designed to build resilience against external shocks and reduce dependence on global markets dominated by the US.

 
A Paradigm Shift: What "Made in China 2025" Signifies
"Made in China 2025" serves as a compelling case study illustrating the transformative power of nationalizing industrial and technological strategies. A national initiative that began with something as seemingly insignificant as a ballpoint pen tip has, in just ten years, reshaped global supply chains, ignited intense technological competition, and fostered a China-led, self-sufficient supply chain and manufacturing paradigm.

 
Implications for South Korea: Challenges and Opportunities

As the Chinese economy undergoes rapid transformation, South Korea's business engagement with China faces a critical turning point. The role of China as merely an export base for South Korean companies is no longer viable. Instead, tapping into the vast Chinese domestic market has become paramount. The previously complementary economic relationship between South Korea and China is increasingly characterized by competitive elements. In this evolving landscape, South Korean companies must navigate a delicate balance of cooperation and competition. Developing localized strategies to penetrate the immense Chinese domestic market is becoming increasingly crucial.

A recent example of collaboration between Japanese automotive companies and Chinese IT firms highlights this new dynamic. Toyota, for instance, has announced that its China-specific electric vehicles will integrate Huawei's operating system. In the fiercely competitive Chinese EV market, Japanese companies are seeking to absorb advanced Chinese technology to ensure their survival and competitiveness.

 
South Korea's Crossroads: Threats and Hidden Opportunities

Within every threat lies a hidden opportunity. As China's scientific and technological advancements accelerate, a corresponding explosive growth in related markets is anticipated. This will inevitably generate demand for South Korean products, particularly in areas like components, equipment, and materials. The increasing demand for smart manufacturing equipment and materials within China, coupled with the potential for joint ventures in third-country markets (such as establishing smart factories in Southeast Asia), presents promising avenues for collaboration and growth.

In a global landscape where new orders are rapidly forming, South Korean enterprises must prioritize securing long-term technological leadership over short-term survival. This requires meticulous monitoring of US-China negotiations and a keen eye for emerging market opportunities.

Now, it is incumbent upon South Korea to ask itself: "What will we make, with whom will we make it, and how will we make it?" Beyond the immediate challenges of technological competition, this is a matter directly linked to our survival. It is an urgent moment for the government and businesses to unite as a single team, formulating a long-term vision and strategic leadership to navigate these turbulent waters.