China Is Rapidly Becoming a Leading Innovator in Advanced Industries
Information Technology & Innovation Foundation
KEY TAKEAWAYS
China has reached a new stage in its economic development, with much greater innovation capabilities in its universities and domestic companies—and on many innovation indicators, China now leads the United States.
China leads or is on par with global leaders in commercial nuclear power and electric vehicles and batteries. It lags behind for now in other key sectors, including robotics, biopharmaceuticals, chemicals, and AI. But it is making rapid progress.
The combination of low costs and growing innovation capability make an increasing number of Chinese companies formidable global competitors.
This rapid innovation progress stems from the Chinese Communist Party’s determined effort to dominate global markets in a host of advanced industries.
While the Chinese innovation system is not perfect, it is much stronger than previously understood—and there are many aspects of it the United States should emulate.
To enable those policies, America should embrace a “national power capitalism” suited to the current existential competition. Government must identify key sectors that are critical for national power and invest adequately to win the techno-economic war.
To do so, America should create five industrial research institutes, a “competitiveness DARPA,” and an industrial development bank; triple the research and experimentation tax credit; and institute a seven-year, 25 percent credit for capital equipment.