Made in Shanghai 2025: City unveils ambitious targets to grow high-end manufacturing and new hi-tech sectors

Shanghai has unveiled an ambitious plan to boost high-end manufacturing in the city with a focus on the semiconductor sector in the next three years, amid growing China-US tech rivalry.

The municipal government on Thursday published a three-year action plan for 2023 to 2025 to “promote the high-quality development” of its manufacturing industry and lists preferred industries as semiconductors and artificial intelligence (AI).

By 2025, Shanghai will build “world industry clusters” for its three leading industries- integrated circuits (IC), biomedicine and AI – and increase the combined value output to 1.8 trillion yuan (US$251 billion) in 2025 from 1.4 trillion yuan in 2022, or an increase of 28 per cent.

While Shanghai has always been regarded as the nation’s financial services hub, the city has gradually been shifting emphasis to its industrial production and tech industries, in line with the government’s push to grow the “real economy”.

Aside from Tesla’s gigafactory, the city is also home to a number of leading domestic chip companies, particularly at its Zhangjiang hi-tech park in the city’s east Pudong district. These include the country’s largest chip foundry Semiconductor Manufacturing International Corp and chip equipment maker Shanghai Microelectronics.

The city is also ramping up investment in AI, including setting up a huge computing centre in the city’s coastal Linggang New Area, to meet surging demand fuelled by ChatGPT-like services and similar generative AI features.

The city has listed a number of targets.

By 2025, industrial output must account for at least 25 per cent of its GDP, while at least 45 per cent of industrial output must come from “strategic new industries”. Shanghai will increase the intensity of its industrial robot usage, measured by unit of industrial robots per 10,000 people, to 360 from the 2022 level of 260.

The global average for industrial robot usage intensity, a measure of automated production, was 126 in 2021, according to the International Federation of Robotics.

The policy follows a decision by the central government to shift its emphasis to “high-quality development” after prioritising fast economic growth for years. China also wants to become more self-reliant when it comes to innovation and strategic tech sectors as it seeks to counter Washington’s use of sanctions to contain the country’s technological progress.

The plan also calls on key manufacturing enterprises to strengthen research and development and enhance chip supply capabilities to ensure “an independent and controllable” supply chain.

The city also plans to strengthen the development of six key industries, which account for about 75 per cent of the city’s industries. The annual output value of electronic information, life health, autos, and high-end equipment industries is targeted to exceed 1 trillion yuan, while that of advanced materials and fashion consumer goods is expected to surpass 50 million yuan, according to the plan.

It also aims to develop new emerging industries including blockchain, Web3.0, metaverse applications, intelligent cars, smart wearables and robots.