On June 2, 2026, the Congressional Research Service published Made in China 2025 and China’s Industrial Policies (IF10964). The People's Republic of China (PRC or China) aims to gain a global economic and technology leadership position through a range of industrial and science and technology (S&T) plans. Such plans inform PRC economic, industrial, S&T, and foreign trade and investment policies. They also guide PRC government and corporate strategies and activities at the national, local, and global levels. The industries, projects, and technologies featured in the plans reflect co-developed PRC civilian and military priorities that are to receive preferential financial and policy support. PRC plans and related policies feature a heavy government role in directing and funding PRC firms to acquire foreign technology and related capabilities in areas in which China has gaps and the United States has long been a global leader and has strong comparative advantages. Some Members of Congress have expressed concern that PRC policies, if successful, could undermine U.S. technological leadership; further shift advanced technology, production, and research to China; and support China's advancements, including in defense. The scope and scale of PRC efforts are evident in the amount of state direction and support devoted to these efforts; PRC policies to lead in all parts of global supply chains; and the targeting of foreign capabilities.
China's Industrial Policy Approaches
Tax, trade, and investment measures. China uses tax preferences to incentivize foreign firms to invest in production and R&D. China introduces market access restrictions as domestic products become viable. China uses standards, IP, competition, and procurement policies to facilitate the transfer of foreign production and know-how to China and to require the use of PRC suppliers.
Forced JVs and partnerships. China's formal regulations and informal practices require a foreign firm to partner with a PRC entity to operate in China and drive foreign firms into JVs. In many sectors (e.g., aerospace), China leverages its role as a major purchaser to press for JVs and technology transfer in order to develop indigenous capabilities. In most cases, the foreign firm's partner is a state firm or the PRC government.
Government subsidies. PRC government guidance funds (GGFs) channel state funding to PRC firms for domestic R&D and overseas acquisitions. GGFs often take a stake or board seat in firms they fund and can influence corporate decisionmaking.
Foreign acquisitions. GGFs target and fund acquisitions of foreign firms and use foreign firms' expertise, IP, talent pools, and business networks to build China's capabilities.
Technology licensing and equipment. Foreign technology and equipment fill key gaps in China's current capabilities. PRC firms are members of U.S.-led open-source technology platforms (e.g., RISC-V, the Open Compute Project, the O-RAN Alliance).
Talent recruitment and training. China encourages the return of PRC expatriates and the hiring of foreign talent. Many PRC technology firms have U.S. R&D centers. Many PRC nationals participate in U.S. federally funded research in areas that overlap with MIC2025 technologies.
