Technology, Innovation, and Industrial Upgrading I

Cong Cao and Denis Simon
Session Organizer:
Rachel Parker
Rich Appelbaum
Thursday, 2 July 2015: 2:15 PM-3:45 PM
CLM.3.04 (Clement House)
For several decades China has been the world’s factory, manufacturing and assembling goods such as cheap apparel and electronics. This role has served China well.  Its export-oriented development, following the path of other East Asian economies, has resulted in rapid growth and a rising middle class. It has also provided China with enormous foreign exchange reserves, which have been plowed back into the Chinese economy in the form of high speed trains, highways, and other infrastructure; universities and science parks; and vast urban developments.  Public investment, which accounts for an estimated two-thirds of China’s growth, has proven to be a successful strategy on the part of the Chinese Communist Party, whose legitimacy depends primarily on a rising tide that lifts a growing number of boats.  But this approach has produced limited returns in terms of innovation. China may be Walmart’s leading trading partner, but the lion’s share of the profits from that relationship are realized by Walmart. China may be the world’s largest assembly of Apple and Samsung products, but only a small share of value-added remains in China.

In 2005, China’s leaders set out to rectify this imbalance. The 15-year “Medium toLong-Term Plan for the Development of Science and Technology” (MLP) set forth ambitious goals to transform China’s S&T efforts from imitator to innovator. The MLP identified four basic science areas as “science megaprojects,” along with thirteen “engineering megaprojects” and eight “frontier technologies” intended to convert scientific knowledge into commercially competitive leading-edge products. The MLP was backed up by China’s 11th and 12th five-year plans, as well as a host of provincial and local efforts to develop world-class S&T capabilities. Significantly, the MLP emphasized the importance of “indigenous innovation” (zizhu chuangxin) to enable China to “leapfrog” its way into scientific leadership.

As China emerges as an innovative world player, its international engagement with scientists and engineers throughout the world is also being transformed. China is now the United States’ leading collaborator in terms of co-authored publications in leading scientific journals. A large number of Chinese students are now studying in universities throughout Europe, North America, and East Asia, learning new habits of research and providing the potential not only for innovative thinking when they return, but also for future collaborations.  Science is inherently cosmopolitan: its efforts transcend borders in solution of both shared theoretical concerns and practical applications. China’s industrial policy approach to S&T advance, on the other hand, is inherently nationalistic: China is seeking to become a world leader. How does this tension play out? On the one hand, it may lead to an opening up of China’s approach, particularly as shared research agendas are directed at shared challenges concerning clean energy, global health, food security, and climate change. On the other hand, it is already resulting in increased tensions, the result of concerns about intellectual property theft and Chinese state support for innovative ventures.

This session will explore whether China is succeeding in its high-tech ambitions, positiioning the country to resume its historical place as a world power.

See more of: Q: Asian Capitalisms