ANNUAL REPORT

dkrause on DSKHT7XVN1PROD with USCC
Table 1:
Made in China 2025
(2015)
(1) Clean energy
vehicles
(2) Next-generation
IT
(3) Biotechnology
(4) New materials
(5) Aerospace
(6) Ocean engineering
and
high-tech ships
(7) Railway
(8) Robotics
(9) Power equipment
(10) Agricultural
machinery
100
Strategic Sectors Identified in China’s State Planning
Strategic Emerging
Industries (2010)
(1) Clean energy
technologies
(2) Next-generation
IT
(3) Biotechnology
(4) High-end
equipment
manufacturing
(5) Alternative
energy
(6) New materials
(7) Clean energy
vehicles
Strategic
Industries (2006)
(1) Armaments
(2) Power generation
and
distribution
(3) Oil and petrochemicals
(4) Telecommunications
(5) Coal
(6) Civil aviation
(7) Shipping
Heavyweight
Industries (2006)
(1) Machinery
(2) Automobiles
(3) IT
(4) Construction
(5) Iron, steel,
and nonferrous
metals
Source: State Council of the People’s Republic of China, Made in China 2025, May 8, 2015;
U.S.-China Economic and Security Review Commission, Hearing on China’s Five-Year Plan, Indigenous
Innovation and Technology Transfers, and Outsourcing, written testimony of Willy C.
Shih, June 15, 2011; U.S.-China Economic and Security Review Commission, Hearing on the
Extent of the Government’s Control of China’s Economy, and Implications for the United States,
written testimony of George T. Haley, May 24–25, 2007; and U.S.-China Economic and Security
Review Commission, Chapter 1, Section 1, ‘‘The Relationship’s Current Status and Significant
Changes during 2007,’’ in 2007 Annual Report to Congress, November 2007, 38–39.
In a 2016 report, Professor Hsueh offers case studies examining
market governance in the telecommunications and textiles industries,
two areas of diverging strategic importance to the Chinese
government:
• Telecommunications (strategic): As a strategic sector, telecommunications’
perceived value lies in the industry’s importance
to the government’s goals of advancing and controlling
China’s technology infrastructure, disseminating and controlling
information, and protecting national security. The sector is
subject to heavy central-level control, and industry actors are
commonly state owned or state controlled. Sector-specific rules
on pricing, market entry and exit, business scope, technical
standards, and ownership structures maximize the benefits of
state control and minimize opportunities for foreign companies—for
example, by absorbing technology from foreign operators
who are unable to compete within the state-promoting regulatory
environment—while simultaneously enhancing state
management of network infrastructure and technology. 86
• Textiles (nonstrategic): Following the first wave of economic liberalization
and privatization in China, the textile industry was
deemed a nonstrategic industry, having few applications for
national security and low contribution to the national technology
base. As a result, the sector experiences a decentralized
market stakeholder pattern, where market coordination is
looser and ownership is dominated by quasi-state and private
firms. China introduced competition in textiles in the 1980s
and devolved market coordination to local governments and
commerce bureaus by the early 1990s. During this period, the
central government undertook forced closures of failing stateowned
textiles factories, mergers of weak and strong compa-
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