Policy Brief Released: Impact of “Made in China 2025” Industrial Strategy on Firms Green Innovation

In a recently published policy brief, Dr. Asif Razzaq, Senior Research Specialist at the CAREC Institute, analyzes the impact of “Made in China 2025” (MIC 2025) industrial strategy on green innovation within enterprises. Introduced in 2015, MIC 2025 aimed to transform China’s manufacturing sector by advancing technological capabilities and reducing dependence on foreign suppliers. While the initiative is no longer as prominently emphasized and has been replaced by other strategies, the study highlights that MIC 2025 played a significant role in advancing the green transformation of several industries, particularly in the manufacturing sector.

The study reveals that MIC 2025 significantly promoted green innovation, with firms in eastern China and low-pollution industries benefiting the most. Mechanisms such as reduced financial constraints, enhanced digital transformation, and improved regional marketization were critical in driving this impact. However, disparities in outcomes highlight the need for tailored policy approaches to ensure widespread benefits.

CAREC countries can draw important lessons from MIC 2025. Integrating green innovation into industrial strategies is crucial for sustainable development. Regional disparities should be addressed by customizing policies to meet local needs. Encouraging digital transformation, improving access to green financing, and fostering regional cooperation are essential steps to ensure the successful adoption of green practices. Cross-border partnerships and knowledge-sharing initiatives can help CAREC countries leverage advanced technologies and promote sustainability across industries.

The policy brief is now available for download on CAREC Institute website.