A worker presents a chip for fifth-generation (5G) mobile networks at China Electronics Technology Group Zhang Bin/China News Service/VCG via Getty Images
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Is China’s Innovation Strategy An Unfair Trade Policy?

US President Donald Trump has repeatedly accused the Chinese government of acting in bad faith in its approach to trade, domestic investment, and intellectual property. But the problem with China's strategy to boost innovation and update its growth model is not that it violates the letter or spirit of global trade rules.

NEW YORK – In his statement announcing a second round of punitive tariffs on imports from China, US President Donald Trump singled out the Chinese government’s “Made in China 2025” plan as a threat to US economic growth and a clear example of “unfair” trade practices. Is there any merit to Trump’s claim? And, equally important, is the plan good for China and the world?

Made in China 2025 is a strategic directive issued by the Chinese government in 2015 to upgrade the country’s economic structure and growth model over the next decade. The plan comprises five key priorities.

The first priority is to promote and accelerate innovation, indicating that Chinese leaders understand that the previous growth model, with its reliance on cheap labor, has now run out of steam. The second priority is improving the quality of products and services. The third and fourth priorities are to boost “green” or environmentally sustainable production techniques and renewable energy, and to promote the structural transformation of industries and firms. And the final priority is investment in human capital and talent development.