Myths about technology and innovation in China persist. Old-fashioned ideas and distorted perceptions result from the rapid changes in the Chinese economic landscape, but also from the fact that the country has a unique political model. Views blurred by stereotypes about China also explain the phenomenon.
In fact, until a few decades ago, the country was predominantly rural. In 1980, 65% of the population was still in poverty. During the ten years of the Cultural Revolution, between 1966 and 1976, universities were closed and science execrated. The Chinese trajectory in technology and innovation is not trivial in the face of its recent past.
The first myth, which persists despite the evidence, concerns China’s own ability to innovate. The argument is that without the free flow of ideas, without freedom of expression, creativity would be stifled. For a country with the Chinese political model, the path would always be copying. Real innovation would be something for liberal democracies. China’s recent advances, from 5G to quantum computing, debunk the idea by hand.
The second myth is that, in the Chinese political model, everything is determined from the top down, everything is state owned — including technology and innovation. The fixed idea that the state controls everything, always, prevents understanding the nature of the Chinese innovation ecosystem.
To begin with, the private sector’s contribution to the economy is often encapsulated in the 60/70/80/90 scheme: it contributes 60% of GDP, accounts for 70% of innovation, 80% of urban jobs and 90% of new jobs in China. Although it is a simplification, the formula correctly indicates that innovation in China does not come from the public sector, but from the private sector – as Lenovo, Tencent, Xiaomi and many others prove.
Evidently, in China, state participation in the economy is brutal and may have its own characteristics, such as Communist Party cells in companies. In addition, the State is increasingly using its weight to guide public investments and encourage private investments in strategic areas — as is the case with semiconductors (and as is increasingly happening in other countries). Still, Chinese innovation is driven by the search for results in the private sector and fierce competition in the market.
The third myth is that foreign multinationals are decreasing investment in research and development (R&D) in China, for commercial or geopolitical reasons. A survey recently released by the European Union Chamber of Commerce in Beijing shows that the participants — European companies with branches in China — are, for the most part, increasing investments in R&D in the country.
These European companies value, in the Asian country, the speed in the commercial application of innovations, the size of the market and the opportunities for partnerships — in a range that includes from established giants to startups, passing through technology parks.
Even in the face of well-founded concerns about intellectual property protection and regulatory changes, and despite the negative sentiment of European headquarters regarding investments in R&D in China, the signs are that companies continue to bet on the Chinese innovation ecosystem — described as an R&D gym, due to the fast pace, by the president of the Chamber of Commerce.
With the appreciation of knowledge, talent in quantity, a large market, investments in R&D sustained over time and political support for this agenda, China will continue to surprise —or disappoint— those who have clung to the myth that the country could not be a power in innovation.
