Executive Summary

China's industrial strategy is evolving in two significant ways. First, it is becoming more systemic and pervasive, extending across all layers of production, from upstream inputs and industrial equipment to downstream applications, services, and frontier technologies. Second, these domestic dynamics are accelerating China's trade dominance, deepening foreign dependencies on Chinese supply chains, and driving the rapid global expansion of Chinese firms. Beijing is also increasingly deploying policy tools to entrench its dominant position in global value chains and deter foreign diversification strategies.

Background & Context

A decade after the launch of Made in China 2025 (MIC25), Beijing is doubling down on state intervention rather than retreating. The next-generation industrial policy represents a shift from targeted sectoral intervention to what can be described as an "industrial policy of everything." While MIC25 focused on a defined set of strategic emerging industries, current frameworks extend across mature sectors, foundational supply chain nodes, and frontier technologies alike. Chinese leadership views past policies as largely successful in building domestic capabilities and global competitiveness.

Main Analysis

The report from Rhodium Group, commissioned by the U.S. Chamber of Commerce, assesses how China's domestic industrial policy is becoming more expansive and refined under tighter constraints. The policy playbook has improved through better coordination, more sophisticated use of subsidies, and strategic deployment of state-owned enterprises. These interventions now touch almost every major sector and their underlying supply chains, with profound implications for global markets.

International Impact

China's next-generation industrial policy is accelerating its trade dominance. Exports in sectors like new energy vehicles, batteries, and industrial equipment have surged, often backed by state support that distorts global markets. Foreign dependencies on Chinese supply chains are deepening, particularly in critical minerals, rare earths, and intermediate goods. Chinese multinationals are expanding rapidly abroad, not only in manufacturing but also in logistics, infrastructure, and technology platforms. This poses strategic challenges for governments and companies seeking to diversify supply chains.

Strategic Perspectives

For businesses, the implications are clear: competition from state-backed Chinese firms will intensify across multiple industries. Policy priorities in advanced economies must shift towards building resilient supply chains, investing in domestic innovation, and strengthening multilateral rules on subsidies. Geopolitical developments, including technology competition and economic security concerns, are reshaping the global industrial landscape. The report notes that early warnings from business and research communities about MIC25 were largely accurate, yet responses were insufficient—a lesson for the current phase.

Future Outlook

Over the next 3-10 years, China's industrial policy will likely continue to expand its scope and sophistication. Artificial intelligence, quantum computing, and biotechnology are emerging as new frontiers. Global trade patterns will increasingly reflect Chinese industrial dominance, with potential for further trade tensions and fragmentation. International cooperation on technology governance and subsidy rules will be critical to maintaining a level playing field. The window for effective action by other economies is finite, as China consolidates its positions in strategic industries.

Conclusion

China's next-generation industrial policy represents a systemic shift with far-reaching consequences for the global economy. Governments, businesses, and multilateral institutions must adapt to a landscape where state-driven competition is the norm. The evidence from the past decade underscores the importance of timely, evidence-based responses to maintain competitive balance and economic resilience.