Chinese Innovation

The Great Wall, China, Badaling, China

China, a nation that had dominated the world many times over the last thousand years, is on track to repeat history once more. Economic reforms introduced by Communist leader Deng Xiaoping in the late 1970s has propelled China to become a nation currently deemed worthy to challenge the U.S. for the number 1 name. China had averaged a 10% annual increase from 1999 to 2008 and in recent years, hovered in the 6-8% range. With recent drives for technological inventions, we might see a rise in the figures and eventually, an overtake to be world largest market.

“China has been one of the richest, that is, one of the most fertile, best cultivated, most industrious, and most populous countries in the world.” Indeed, over the past few decades, China has taken concrete steps to made that a reality. In 2015, China declared”Made In China 2025″, a strategic blueprint that details the necessary actions to equip and transform the nation with local technological innovations and period the Chinese equivalent of the Fourth Industrial Revolution. In fact, a term was invented to describe China’s unique innovation policy and its ability to drive innovation and technological advancement within its geographical boundaries. Termed”Indigenous Innovation”, China has primed itself to be the next world’s capital of innovation and technology. Below are some of the reasons why China is able to or rather, will dethrone the U.S. within the next decade or so.

  1. Size matters. China is a enormous nation, whether its geographic size or population. While China and U.S are equally big at 9.3 million square km and 9.1 million square kilometers respectively, China trumps (no pun intended) U.S with over 1.4 billion citizens, more than 4 times the that of the U.S. China’s population high adoption rate for technology as well as its enclosed ecosystem has created a perfect environment for Chinese enterprises to grow and thrive. Furthermore, taxpayers in China have longed been proven to be more permissive in the sharing of the personal data, a sharp contrast to the Western countries where private data policies and regulations are strictly enforced. The current Cambridge Analytica saga regarding Facebook’s user information highlighted the importance of keeping personal data private, but it is one that we may never see in China. However, reports of ’emotional surveillance’ being used where employees’ brain waves are monitored in military websites and state-owned enterprises appears to have crossed the line in its newest efforts to monitor its people.
  2. Support from the Chinese authorities. Policies like China’s 13th Five-Year Plan (2016-2020) and Made In China 2025 are powerful evidence of China ambitious plans to establish itself as the world leader in the technology leader. Subsidies, low-interest loans and tax breaks are a few of the support tech companies are expected to get as part of China’s plan to propel research and innovation within the country. Furthermore,

Instead of having Western companies like Google, Facebook and Twitter thrive, the Chinese authorities nurtured domestic firms through protectionisms and enormous subsidies. Local tech giants such as Baidu, Alibaba, and Tencent, commonly called BAT, were able to grow under the sheltered surroundings and having the whole Chinese pie to themselves. Since that time, these companies have expanded overseas through acquisitions and setting up of research and innovation centers, a move that many countries have deemed to be a clear act of’tech importation’, aka transfer of technology.

  1. Lastly, it’s simply sheer ignorance about China. Indeed, many who have little awareness of today’s China would still perceive it as a”copy-cat” country thrives on producing counterfeit goods and”Made-In-China” products for the outside world. The simple fact is that they are now producing innovation leaders and are the ones to beat. A prime example is Shenzhen, which has evolved along the way to become its own innovation hub. Referred to as China’s Silicon Valley for hardwares, Shenzhen houses many of the companies which produces the tech product we see today, from drone producer DJI into iPhone manufacturer Foxconn. It has positioned itself as a hardware and IoT hub for many electronics manufacturers and a hotspot for Chinese technology startups. Ignorance used to be bliss when one can freely enjoy the low cost of manufacturing in China; ignorance is now a looming threat of takeover.

“China has a fairly deep awareness of what’s happening in the English-speaking planet, but the opposite isn’t true.” Quotation by Andrew Ng, co-founder of Coursera and one of the pioneers in Artificial Intelligence.

The future will be one dominated by technology, and China has prepped itself to be part of the future. President Xi Jinping understood the difficulties of sustaining China’s economic growth and understood the potential of technology to scale to millions of enterprises and remove inefficiencies while benefiting the end-consumers.

However, it will be na├»ve to conclude that China will overtake U.S. only on the basis of superior technology. The possibility of a trade war between the U.S. and China only benefits China, for it has the benefits of economies of scale and a single, independent industry. The continuing trade surplus with the U.S is evident of U.S. reliance on China goods, and a trade war is only going to harm the nation with price hikes in consumer goods. The trade surplus for the first quarter of 2018 spiked nearly 20 percent to reach $58.25 billion, citing the possibility of a trade war. What’s more, China has been extending its economic and political influence with the Belt and Road Initiative (BRI). Expected to cost over a trillion dollars and impact 60% of the world’s inhabitants, the BRI is the largest undertaking by the Chinese since the Great Wall of China. All signs point to the fact that China has the money, technology and influence to take over the world.

In general, China has evolved from a nation of imitation to one of innovation, from among producing products to one of inventing products. Perhaps it’s time for the world to take a good look at China and paradoxically, replicate what they are doing now. For the U.S, cooperating might be the best, and only way of moving forward.

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