China’s Strengths and Weaknesses 101

Source Link

President Barack Obama’s State of the Union address centered on improving U.S. innovation and competitiveness. And as he noted, China’s rapid economic growth and heavy investments in science, technology, and innovation pose a serious challenge to our nation’s status as the world’s leading economy. A recent report by the Center for American Progress, “Rising to the Challenge: A Progressive Approach to China’s Innovation and Competitiveness Policies,” provides a number of reasons why the United States needs to adopt new strategies to capitalize on our nation’s historical, institutional, and structural advantages as the world’s economic powerhouse. But policymakers also need to be aware of China’s many assets and liabilities. 

Here are five of them, alongside the action the United States should take. China is making more competitive products but lacks true innovation China’s strength The technological products behind China’s tremendous growth are largely developed incrementally, often as refinements of imported pre-existing technologies. This “import/ assimilate/re-innovate” model has proven to be a successful strategy, as China courts foreign companies to move their manufacturing facilities, then coerces those companies to share their technology with the state. China’s weakness While historically conducive to growth, the “import/assimilate/re-innovate model” does not foster a climate of original innovation. For China to truly become the dominant world economy, it will have to display true technological leadership. High levels of R&D investment may be effective to that end. U.S. action This is why the United States needs to maintain its science and technology leadership through expanded R&D investments of its own. 

2 Center for American Progress | China’s Strengths and Weaknesses 101 China is investing in science and technology but lacks high standards and integrity China’s strength China understands the need to invest in its innovation engine. In 2008, China spent $66 billion in R&D, the highest amount of any developing nation and the fourthhighest in the world. Consequently, despite the economic downturn which has taken a toll on the R&D budgets of most American companies, patent applications in China jumped by 18.2 percent in 2008 and another 8.5 percent in 2009, the last years for which complete data are available.