This paper evaluates the innovation effects and heterogeneity of the“Made in China 2025”policy using data from Chinese A-share listed manufacturing firms from 2009~2022 and using propensity score matching, difference-in-differences, and triple-differences methods. Our findings indicate that the policy significantly enhanced firm’s innovation input, output, and quality. Critically, it exhibits a “pro-weakness and quality-enhancing” characteristic by providing stronger marginal incentives to technology followers. We identify resource support and R&D efficiency as key transmission mechanisms. We further uncover significant boundary conditions for the policy’s effectiveness: at the firm level, its effect varies with firm size and absorptive capacity; at the industry level, it is most potent in technology-intensive sectors but may crowd out followers in capital-intensive ones; and at the regional level, it is amplified by a favorable innovation environment. These results hold after robustness checks. Despite its initial success in narrowing the technology gap, the policy’s long-term impact is challenged by a potential rebound in innovation quality divergence.