China issues plan for gleaming high-tech future

By Gerry Shih BEIJING (Reuters) - China has unveiled a vision for the next stage of its economic ascent, moving from plain manufacturing to a world of prosperity from space, e-commerce, green energy and bioengineering, among others. Faced by economic growth at its lowest level in decades and rising wages and resource costs that are eroding its appeal as a low-cost factory for the world, China's cabinet on Tuesday published its sweeping "Made in China 2025" strategy. Its plan is to promote advanced industry by that year and move the economy away from the low-value manufacturing model that fueled its meteoric rise over the past quarter-century. Manufacturing has helped China "attain major nation status" yet compared to the world's leading standards, China's manufacturing sector "is big not but not strong," the document said. Western critics warned that China's lofty ambitions may be hampered by tough cybersecurity rules and internet speeds which can be sluggish. Dated May 8 and released by the State Council, or China's cabinet, the document highlighted manned spaceflight, high-speed rail, bioengineering, materials science, new and green energy, e-commerce, big data and mobile internet as among the high-value industries in which it has had success or views as areas that merit intensive investment. The document issued goals for patent applications and research and development spending as a proportion of revenue at large companies, as well as targets for national broadband penetration and for the reduction of water and energy consumption. "If China doesn’t change and follows the original economic development, growth would definitely have to fall," Ding Yifan, an economist at the Development Research Center affiliated with China's cabinet, told Reuters. Chinese Premier Li Keqiang has been among the most vocal proponents of upgrading China's manufacturing sector and has pushed for the consolidation of state-owned enterprises in sectors like high-speed rail to create more competitive companies capable of exporting advanced technology. [L4N0XO4FD] Li, who mentioned the "Made in China 2025" slogan during his annual work report in March, has also urged Internet companies to lower their prices and expand coverage as part of a broad push to improve the digital and transportation infrastructure. [L3N0Y659O] CYBERSECURITY China's framework has been widely compared to Germany's "Industrie 4.0" plan released last year to boost its own competitiveness with internet-connected factories. Chinese state media have described China's plan as far more broad. Leaders in Berlin and Beijing have considered collaborating on the respective upgrade projects to improve bilateral ties. Germany's ambassador to Beijing, Michael Clauss, warned in a statement on Friday that China's cybersecurity regulations, which have steadily tightened following Edward Snowden's disclosures of widespread U.S. cyberspying, must be balanced in a way that does not hurt innovation. Germany, along with the United States and other European countries have expressed concern about the direction of China's cybersecurity policy. Clauss previously warned that China's erstwhile proposal to limit foreign technology in the banking sector would hamper foreign firms' market access to China. He also called for faster Internet in China, citing a European Union chamber of Commerce poll that found slow access speeds negatively affected 86 percent of its member companies. China and Germany are enjoying strong relations, with growing collaboration on technology serving as a pillar. Chinese Premier Li Keqiang made a video appearance at Germany's annual CeBIT tech showcase in March, while national tech giants SAP and Huawei also announced a strategic tie-up. (Editing by William Hardy)