Well, the challenges definitely are that they are looking for a
future perspective of the Chinese economy that goes beyond the model that they have,
if you call it a model that they have applied in the last decades,
they think that, we all think that actually probably labor intensive export orientation
is not the way to go for the future.
Wages are rising, resources are becoming scarcer, but especially
it is also not prestigious enough.
The government really strives for moving up the value chain, to getting away from just producing
at very low profit margins for global markets,
but actually moving into the sections of what we call value chain
where they can earn more money, and also pay higher wages and create other types of jobs.
This is a difficult balancing act, because you have to have the human resources to do so
which is a big challenge on the side of the education system and so on,
but you also have to make sure that you don't move out the traditional sectors
to fast, so that people that do not have the educational level for doing something else,
are actually running into unemployment.
The idea is that they wanna shift the heavy industries to somewhere else,
maybe partly to the western part of China, but mostly I would say actually along the OBOR
One-Belt-One-Road lines.
And then actually concentrate on green and smart industries.
And smart is everything that comes with telecommunication
and make this into the big industries that carry China's economy into the next decades.
I would say, the Made in China 2025 more is kind of a
targeting of where they wanna where they end up, head to.
They have goals for 2020, 2025, and actually it goes on to 2049. It's not stopping at 2025.
So, and that is kind of something that we know from the past, that they kind of formulate the task,
but the crucial issue is that this is the strategy for being innovative,
and for creating China's competitiveness based on innovation.
And that is the game changer.
Because in the past it was kind of, ok, we look at industrialized countries and we know, where we wanna
head to, where we wanna be competitive, or maybe can be competitive,
but, I mean, always coming from this notion of catching up, that was probably not the word the Chinese used,
but you somehow always have the role model you follow.
The further they go along the line of Made in China 2025,
and also the targets of the two centenary goals for 2049,
the less they have a role model, because
they actually want to overtake the industrialized countries at least in some industries.
If you put too much emphasis on certain indicators that you can measure than you get what you can measure.
Because that is, if the incentives creating the system,
that you have to fulfill these targets, then people tend to fulfill the target.
We had that problem, that is not new. I mean, we have seen, that in the past.
What is perhaps more severe currently is
that really people are a bit scared of doing something alternative.
I mean, these kind of, doing something in a new area,
where you think, this is good, I just do it, regardless what the central government tells me.
I think this kind of initiative is currently
somehow subdued, because people feel that
taking too much initiative may actually create criticism from the top.
That is one thing. The other thing is that,
overall, that the innovation strategy of China often is just
different from what, let's say, we are used to in Germany.
It is not like, I mean, we have this example with the wind mills, that's a classic for me,
where people always said, oh, they will never do the wind mills because they are inefficient,
put up these, or set up these huge wind parks,
and then 50% of the mills don't run, and it is not connected to the grid yet.
But that was, we are talking about these things 7 or 8 years ago, and it was true. They had a lot of problems.
The German approach is to, ok, you put this wind mill into the laboratory,
you test it for, I don't know, hours, hours, hours, just simulate 25 years of use,
and then say, oh, it is working. Ok, then we can put it up.
In China it is different, you put out 1000 wind mills, and say, ok, some don't work, what's wrong,
and then you take them down again.
It is a completely different approach.
and they are pretty aware, that if there are hundred robot parks,
probably 85 will not work in the long run,
but 15 emerge that are really good, that's sufficient for them currently.
They have a long term strategy of first supporting,
via the 5-year plans, and the science and technology plans, certain
research, looking to there, ok, this is industry we can not yet compete,
we don't do that.
Solar is a good example. It was very clear that solar energy was too expensive for China,
first of all in the 2000s,
and that they did not have access to the core raw material.
I mean, being actually processed raw material, this purified silicon.
They couldn't do it, they didn't know how to produce them, there was an a monopoly globally.
They said, ok, this is not an option for us, we go for wind first, we don't go for PV,
but they catered, or they fostered scientific research on it.
And eventually in 2008 they broke the monopoly because they knew how to do it,
and suddenly the prices of the raw material tumbled,
and that, I mean, was a revolution for the gobal market,
but it was also for China, and that kind of created the basis for them then later
to say, ok, now we can also employ them in China.
The government was still hesitant because it was still expensive,
but eventually they supported it.
And now they are the most important, in terms of
new installation, in terms of investment,
they are the most important investor in China, but also globally they invest a lot.
And so from that perspective,
the industrial policies somehow work, but it is, again, it is another approach.
The real signal of the industrial policy is "go for it",
and make as much as you can and then we see what comes up.
Well, and the other thing is that there is a challenge for the future,
because renewable energies, especially solar, but also partly wind
is actually best used in a decentralized way.
And so far they were very good in the centralized programs,
but actually what is now growing most is decentralized renewable energy.
And that I think, that is actually our future research more,
than the past is, is really a challenge because that
creates challenges for the grid, for the management of the grid, for
for the local power play and so on, so, I am very curious how that will work out.




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