German leader's visit seals deal to bring made in China 2025 and industry 4.0 together

The German chancellor, Angela Merkel has just paid her eighth visit to China in 10 years, setting a record for the number of times a German chancellor has made the trip.

In addition to meeting Chinese leaders, she visited rural areas in East China's Anhui province accompanied by Premier Li Keqiang.

Merkel and Li reached many agreements, including a pledge to deepen their countries' comprehensive strategic partnership. Germany has been supporting China's efforts to include the renminbi in the International Monetary Fund's Special Drawing Rights, and has expressed a hope to accelerate negotiations on a bilateral investment treaty between China and the European Union.

Among the achievements, the consensus to advance connectivity between Industry 4.0 and the Made in China 2025 strategy, and to expand collaboration in emerging industries was the most striking.

This synergy benefits the long-term strategies of both China and Germany and fulfills the need for economic restructuring. Since the financial crisis of 2008, the global economy has been challenged by the lack of breakthroughs in emerging industries and has faced the issue of industrial upgrading. Many countries have looked to quantitative easing or have implemented expansionary fiscal policy, but that has not been enough to ensure strong economic recovery.

The United States and the United Kingdom are keen to rejuvinate their industries, while emerging countries have attached great importance to enhancing manufacturing. To compete with them, China and Germany need to make full use of their industrial power and huge capacities to maintain leading positions in the global economy.

Germany has maintained stable economic development despite crises in the eurozone, but it is reluctant to continue this in the long run, given that other eurozone countries are struggling with floundering economies. Germany was the first to propose an initiative like Industry 4.0, which aims to combine the country's industrial advantages and digital technologies.

China is facing the problem of an economic slowdown, and its industrial sector is challenged by overconsumption of energy, environmental pollution and the pressures of restructuring. Dealing with these issues, which are all important for Chinese manufacturing and macroeconomic development, requires China and Germany to work more closely under the Industry 4.0 and Made in China 2025 frameworks, to play to their own industrial strengths, collaboration while competing, set new industrial standards and promote institutional and technological innovation.

While enhancing collaboration with Made in China 2025, some in Germany are concerned the country will lose its industrial edge against China. This is understandable, but synergy is really good for everyone.

The countries' manufacturing industries are at different levels. For Germany, it is more about combining the Internet and big data with its strong manufacturing industry to hedge against competition from other industrial powers and maintain a world-leading position.

For China, it is more about narrowing the gap between first-tier industrial powers such as Germany, Japan and the US and learning from them to reach a 3.0 level. It's more about moving from low-end manufacturing, which China has relied on for 30 years, to a much more advanced kind of manufacturing.

So there is great complementary potential for China and Germany. Setting new industrial standards by synergizing their national strategies will benefit both countries.

Industry 4.0 and Made in China 2025 are long-term projects that will require more than a decade to produce satisfactory results. That gives China and Germany enough time to fit with each other and work more closely together.

The author is director of the Center for European Studies at Fudan University in Shanghai. The views expressed do not necessarily reflect those of China Daily.

(China Daily European Weekly 11/06/2015 page11)