China’s “Made in China 2025” policy to upgrade its industry plays a central role in the ongoing U.S.-China trade tensions. Paul Haenle sat down with Paul Triolo, practice head of Geo-technology at the Eurasia Group, to discuss how the Chinese government initiative impacts and challenges the U.S. and global economies, and how best to formulate policies in response.

Triolo acknowledged the Chinese government's ambitions to make its economy more competitive by upgrading its manufacturing base and achieving self-sufficiency in key high-tech industries. Yet, he noted concerns that China's state-backed policies are non-compliant with China's WTO obligations and advocate for unfairly acquiring U.S. and western technology in order to dominate key technology sectors. These policies also pose the risks of fostering domestic overcapacities and distortions in global markets. Triolo recommended U.S. policymakers not attempt to suppress innovation by restricting Chinese investment in U.S. fields like artificial intelligence, where there is extensive collaboration between the U.S. and China. Instead, it is important not to overreact to Made in China 2025, Triolo said, as it is unclear how successful the industrial policy will be.

Paul Haenle

Paul Haenle is the director of the Carnegie–Tsinghua Center for Global Policy based at Tsinghua University in Beijing. Haenle’s research focuses on Chinese foreign policy and U.S.-China relations.

Paul Triolo

Paul Triolo is practice head of Geo-technology at the Eurasia Group, and focuses on global technology policy issues cybersecurity, internet governance, ICT regulatory issues, as well as AI, ambient intelligence, and fintech and blockchain.