Why has China failed to become the world’s innovation and technology hotspot?

It is the world’s second largest economy, one of the world’s largest defence spender, and the world’s largest manufacturing powerhouse. Yes, I am talking about China, the most populous nation on Earth.

Ever since the beginning of the last decade, global media has been abuzz with a so-called  “imminent rise of China”, which they believe, will severely displace the present day global order. People point to the strength in China’s economy, military, and manufacturing. However, popular projections forget to take into account the fact that future economies won’t resemble present-day economies at all. Power projection through “soft power”, and not hard power, will be the norm. A country’s measure of sucess 50 years into the future will be on the basis of its ability to attract foreign innovation, and the capacity to easily accept and assimilate the best of all the worlds, and not on the basis of its military might. The fundamental question that leaps to the eye then is : Can China attract innovation from all the corners of the globe like the United States does? Is the Chinese economy future-proof? Let’s see….

Image result for chinese technology universities
Peking University, Beijing

Let me start with some straight statistics : The number of foreign students studying or researching in China in 2014 was 30% more than the number of foreign students in China in 2000. During the same period, the number of foreign students in the US rose by a staggering 50%. Another poll conducted by Chatham House indicates that only 16% of foreign students who have studied in China remained there after completing their studies, whereas 42% of foreign students remained in the United States after completion of their education. All of these numbers point to my fundamental argument : China does not appeal foreign talent or innovation, nor does the Chinese culture possess the required allure to retain these students.

An obstacle which further compounds this problem is the language barrier : Only 4-10 million Chinese have the L2 proficiency in English: which is less than 1% of the total population. This reluctance to imbibe English is keeping foreign students, researchers and professors from making China as their base. The quality of Chinese scientific publications is equally questionable. They attract relatively few citations, a key measure of other scientists’ opinion of their worth, and the number of papers retracted after being found to involve plagiarism and even fabrication has risen steeply. A recent investigation by Science magazine, published by the American Association for Advancement of Science, uncovered widespread evidence in China of “a flourishing academic black market, involving shady agencies, corrupt scientists and compromised editors.”


China’s claimed advances in research look similarly shaky. The China Association for Science and Technology, a professional body, says 60% of government funding for scientific R&D is embezzled or otherwise misappropriated. Meanwhile, China’s engineering graduates may be numerous, but their quality, too, is uncertain. A poll of leading multinational companies by McKinsey management consultants found that almost all of them considered western-educated engineers more employable than those trained in China or India. Engineering UK, an industry body, calculates that, proportionately, Britain produces two-and-a-half times more employable engineering graduates than does China.

Another problem threatening China’s technology and innovation sector is the government censorship. It is hard to estimate how many entrepreneurs in China need access to information and websites blocked by the ” Great Firewall”, which is China’s state control censorship apparatus. Censorship drastically reduces the efficiency, and the ease of doing business in China. In fact, many Chinese startups only live in a “China Wide Web”, with no idea of the competition, they face from abroad. However, the Great Firewall is simply a symptom, and not the cause, of much broader issues that are actually hampering creativity and innovation across the economy.

China lacks the right mix of conditions that feed real innovation, including free flow of information from across society, strong intellectual property rights, and an education and culture that encourages people to think creatively and speak up for themselves. The key words for today’s and the future’s  innovation are ‘open’ and ‘collaboration’. The reluctance of the Chinese government, and the society as a whole have essentially isolated the country from rapid idea exchanges around the world. This is why even though China leads the world in military and economic might, subtle factors like technological innovation and foreign talent make sure that China will not emerge as the world’s technological superpower anytime soon.

Note:- All the opinions stated in the above article are the author’s own.

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