{"id":443419,"date":"2022-05-07T19:10:39","date_gmt":"2022-05-07T16:10:39","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/chinas-innovation-machine-is-changing-which-could-affect-global-trade\/"},"modified":"2022-05-07T19:10:39","modified_gmt":"2022-05-07T16:10:39","slug":"chinas-innovation-machine-is-changing-which-could-affect-global-trade","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/chinas-innovation-machine-is-changing-which-could-affect-global-trade\/","title":{"rendered":"#China&#8217;s &#8216;innovation machine&#8217; is changing \u2014 which could affect global trade"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a341ac907d3d\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a341ac907d3d\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/chinas-innovation-machine-is-changing-which-could-affect-global-trade\/#%E2%80%9CChinas_%E2%80%98innovation_machine_is_changing_%E2%80%94_which_could_affect_global_trade%E2%80%9D\" >&#8220;China&#8217;s &#8216;innovation machine&#8217; is changing \u2014 which could affect global trade&#8221;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/chinas-innovation-machine-is-changing-which-could-affect-global-trade\/#Balancing_government_and_market\" >Balancing government and market<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/chinas-innovation-machine-is-changing-which-could-affect-global-trade\/#Building_quality_alongside_quantity\" >Building quality alongside quantity<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/chinas-innovation-machine-is-changing-which-could-affect-global-trade\/#Developing_smart_manufacturing\" >Developing smart manufacturing<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/chinas-innovation-machine-is-changing-which-could-affect-global-trade\/#Building_an_advanced_digital_economy\" >Building an advanced digital economy<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/buradabiliyorum.com\/en\/chinas-innovation-machine-is-changing-which-could-affect-global-trade\/#International_collaboration_is_key\" >International collaboration is key<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/buradabiliyorum.com\/en\/chinas-innovation-machine-is-changing-which-could-affect-global-trade\/#Different_standards\" >Different standards<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9CChinas_%E2%80%98innovation_machine_is_changing_%E2%80%94_which_could_affect_global_trade%E2%80%9D\"><\/span>&#8220;China&#8217;s &#8216;innovation machine&#8217; is changing \u2014 which could affect global trade&#8221;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div>\n                            China has had the world\u2019s fastest-growing economy since the 1980s. A key driver of this extraordinary growth has been the country\u2019s pragmatic system of innovation, which balances government steering and market-oriented entrepreneurs.<\/p>\n<p>Right now, this system is undergoing changes that may have profound implications for the global economic and political order.<\/p>\n<p>The Chinese government is pushing for better research and development, \u201csmart manufacturing\u201d facilities, and a more sophisticated digital economy. At the same time, tensions between China and the west are straining international cooperation in industries such as semiconductor and biopharmaceutical manufacturing.<\/p>\n<p>Taken together with the shocks of the Covid pandemic, and particularly China\u2019s rapid and large-scale lockdowns, these developments could lead to a decoupling of China\u2019s innovation system from the rest of the world.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Balancing_government_and_market\"><\/span>Balancing government and market<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>China\u2019s current \u201c<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/global.oup.com\/academic\/product\/demystifying-chinas-innovation-machine-9780198861171?cc=fr&amp;lang=en&amp;\">innovation machine<\/a>\u201d began developing during the economic reforms of the late 1970s, which lessened the role of state ownership and central planning. Instead, room was made for the market to try new ideas through trial and error.<\/p>\n<p>The government sets regulations aligned to the state\u2019s objectives, and may send signals to investors and entrepreneurs via its own investments or policy settings. But within this setting, private businesses pursue opportunities in their own interests.<\/p>\n<p>However, freedom for businesses may be declining. Last year, the government cracked down on the <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.bloomberg.com\/news\/articles\/2021-10-07\/china-s-central-bank-governor-vows-to-continue-fintech-crackdown\">fintech<\/a> and <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.abc.net.au\/news\/2021-08-20\/china-crackdown-private-tutoring\/100392352\">private tutoring<\/a> sectors, which were seen to be misaligned with government goals.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Building_quality_alongside_quantity\"><\/span>Building quality alongside quantity<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>China performs well on many measures of innovation performance, such as R&amp;D expenditure, number of scientific and technological publications, numbers of STEM graduates and patents, and top university rankings.<\/p>\n<p>Most of these indices, however, measure quantity rather than quality. So, for example, China has:<\/p>\n<p>Adding \u201cquality\u201d alongside \u201cquantity\u201d will be crucial to <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/global.chinadaily.com.cn\/a\/202103\/17\/WS60513ac4a31024ad0baaf959.html\">China\u2019s innovation ambitions<\/a>.<\/p>\n<p>In the past, policies have aimed to \u201ccatch up\u201d with known technologies used elsewhere, but China will need to shift focus to develop unknown and emerging technologies. This will require greater investment in longer-term basic research and reform of research culture to tolerate failure.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Developing_smart_manufacturing\"><\/span>Developing smart manufacturing<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Chinese firms can already translate complex designs into mass production with high precision and unmatched speed and cost. As a result, Chinese manufacturing is <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ealing to high-tech companies such as <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.scmp.com\/tech\/big-tech\/article\/3163117\/worlds-largest-iphone-factory-maintains-production-schedule-amid\">Apple<\/a> and <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.aljazeera.com\/economy\/2022\/4\/18\/tesla-and-other-firms-look-to-reopen-shanghai-factories-sources\">Tesla<\/a>.<\/p>\n<p>The next step is upgrading towards \u201cindustry 4.0\u201d smart manufacturing, aligned with the core industries listed in the government\u2019s <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/thediplomat.com\/2019\/02\/made-in-china-2025-explained\/\">Made in China 2025 blueprint<\/a>.<\/p>\n<p>By 2020, China had built eleven \u201clighthouse factories\u201d \u2013 benchmark smart manufacturers \u2013 the most of any country in the World Economic Forum\u2019s \u201c<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.weforum.org\/projects\/global_lighthouse_network\">global lighthouse network<\/a>\u201d.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Building_an_advanced_digital_economy\"><\/span>Building an advanced digital economy<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>China\u2019s giant tech companies such as Alibaba, Tencent, and Huawei are also using machine learning and big data analytics to innovate in other fields, including pharmaceutical research and <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/techcrunch.com\/2022\/02\/10\/china-autonomous-driving-2021\">autonomous driving<\/a>.<\/p>\n<p>In China, the regulations for bio<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a>, bioengineering and biopharmaceuticals are relatively relaxed. This has <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.mckinsey.com\/industries\/life-sciences\/our-insights\/the-dawn-of-china-biopharma-innovation\">attracted researchers and investors<\/a> to several leading biotechnology \u201c<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/en.wikipedia.org\/wiki\/Clusters_of_Innovation\">clusters<\/a>\u201d.<\/p>\n<p>China\u2019s population of more than 1.4 billion people also means that, even for rare diseases, it has a large number of patients. Using large patient databases, companies are making advances in <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nature.com\/articles\/529009a\">precision medicine<\/a> (treatments tailored to an individual\u2019s genes, environment, and lifestyle).<\/p>\n<p>The rising power of China\u2019s big tech firms has seen the government step in to maintain fair market competition. <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.bruegel.org\/2021\/09\/opening-up-digital-platforms-and-reducing-anticompetitive-risks\">Regulations force digital firms<\/a> to share user data and consolidate critical \u201cplatform goods\u201d, such as mobile payments, across their ecosystems.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"International_collaboration_is_key\"><\/span>International collaboration is key<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>As we have seen in the <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nature.com\/articles\/d41586-020-03626-1\">recent triumph of COVID-19 vaccines<\/a>, global collaboration in R&amp;D is hugely valuable.<\/p>\n<p>However, there are signs that such collaboration between China and the West may be under threat.<\/p>\n<p>The semiconductor manufacturing industry \u2013 making the chips and circuits which drive modern electronics \u2013 is currently global, but at risk of fragmentation.<\/p>\n<p>Making chips requires huge amounts of knowledge and capital investment, and while China is the world\u2019s largest consumer of semiconductors it relies heavily on imports. However, US sanctions mean many global semiconductor companies <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.bcg.com\/publications\/2020\/restricting-trade-with-china-could-end-united-states-semiconductor-leadership\">cannot sell in China<\/a>.<\/p>\n<p>China is now investing <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.scmp.com\/tech\/policy\/article\/3085362\/china-has-new-us14-trillion-plan-seize-worlds-tech-crown-us\">vast sums<\/a> in an attempt to be able to make all the semiconductors it needs.<\/p>\n<p>If China succeeds in this, one consequence is that Chinese-made semiconductors will likely use different technical standards from the current ones.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Different_standards\"><\/span>Different standards<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Diverging technical standards may seem like a minor issue, but it will make it more difficult for Chinese and Western technologies and products to work together. This in turn may reduce global trade and investment, with bad results for consumers.<\/p>\n<p>Decoupling standards will increase the fracture between Chinese and Western digital innovation. This in turn will likely lead to further decoupling in finance, trade, and data.<\/p>\n<p>At a time of heightened international tensions both China and the West need to be clear on the value of international collaboration in innovation.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img decoding=\"async\" loading=\"lazy\" style=\"border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;\" alt=\"The Conversation\" width=\"1\" height=\"1\" class=\"js-lazy\" src=\"https:\/\/counter.theconversation.com\/content\/180615\/count.gif?distributor=republish-lightbox-basic\"\/><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https:\/\/theconversation.com\/republishing-guidelines --><\/p>\n<p><noscript><img decoding=\"async\" loading=\"lazy\" style=\"border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;\" src=\"https:\/\/counter.theconversation.com\/content\/180615\/count.gif?distributor=republish-lightbox-basic\" alt=\"The Conversation\" width=\"1\" height=\"1\" class=\"\" srcset=\"\"\/><\/noscript><br \/>\n<em>This article by <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/theconversation.com\/profiles\/marina-yue-zhang-543587\">Marina Yue Zhang<\/a>, Associate Professor of Innovation and Entrepreneurship, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/theconversation.com\/institutions\/swinburne-university-of-technology-767\">Swinburne University of Technology<\/a>; <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/theconversation.com\/profiles\/david-gann-1338546\">David Gann<\/a>, Pro-Vice-Chancellor, Development, and External Affairs, and Professor of Innovation and Entrepreneurship, Sa\u00efd Business School, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/theconversation.com\/institutions\/university-of-oxford-1260\">University of Oxford<\/a>, and <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/theconversation.com\/profiles\/mark-dodgson-7901\">Mark Dodgson<\/a>, Visiting Professor, Imperial College Business School, and Emeritus Professor, School of Business, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/theconversation.com\/institutions\/the-university-of-queensland-805\">The University of Queensland<\/a> is republished from <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/theconversation.com\">The Conversation<\/a> under a Creative Commons license. Read the <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/theconversation.com\/chinas-innovation-machine-how-it-works-how-its-changing-and-why-it-matters-180615\">original article<\/a>.<\/em>\n                        <\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more like this article, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/technology\/\" target=\"_blank\" rel=\"noopener\">Technology category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/thenextweb.com\/news\/china-innovation-changing-why-that-matters-for-west\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;China&#8217;s &#8216;innovation machine&#8217; is changing \u2014 which could affect global trade&#8221; China has had the world\u2019s fastest-growing economy since the 1980s. A key driver of this extraordinary growth has been the country\u2019s pragmatic system of innovation, which balances government steering and market-oriented entrepreneurs. Right now, this system is undergoing changes that may have profound implications&#8230;<\/p>\n","protected":false},"author":1,"featured_media":443420,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/img-cdn.tnwcdn.com\/image\/tnw?filter_last=1&fit=1280,640&url=https:\/\/cdn0.tnwcdn.com\/wp-content\/blogs.dir\/1\/files\/2022\/05\/china-manufacturing.jpg&signature=5c1c5572d8265864e3ebbb51433f2347","fifu_image_alt":"","footnotes":""},"categories":[18],"tags":[],"class_list":["post-443419","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-technology"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/443419","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=443419"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/443419\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/443420"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=443419"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=443419"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=443419"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}