China has often been dismissed by industrialized nations as a country that is adept at copying but weak at creating, crippled by a memorization-based education system, excessive respect for authority and a tendency to steal intellectual property. But a study by the Information Technology and Innovation Foundation (ITIF), a non-partisan Washington-based think tank focused on U.S. science and technology policy, found that China’s innovation in 2020 was 139% of its U.S. equivalent, up from 78% in 2010. Based on another metric accounting for the comparative size of their economies and populations, China’s innovation output was three-quarters of U.S. levels, up from 58% in 2010. “China is evolving from an imitator to an innovator, following a path blazed by its Asian Tiger neighbors – but at a much larger scale, with far greater geopolitical consequences,” said ITIF President Robert Atkinson, who co-authored the report along with research assistant Ian Clay.
China has already displayed great potential for global leadership in several key areas, including supercomputers, space exploration, artificial intelligence (AI), quantum computing and high-speed rail. “Its innovation capabilities now threaten the global market share of firms from the United States and allied nations in most high-value-added, advanced industries that are important to U.S. prosperity and security,” Atkinson added. History abounds with developing countries hitting a roadblock, sometimes dubbed the “middle-income trap”, in their bid to join the world’s wealthiest and most technologically advanced economies. If China with its vast size and population can join that elite club, it would upend global geopolitics, supply chains and power balances for decades, according to the report, titled “Wake Up, America: China Is Overtaking the United States in Innovation Capacity”.
The cost for the U.S. or other advanced nations that lose their hi-tech competitive edge is significantly more consequential than losing ground in low-skill industries given the loss of good-paying jobs, the national security risks and how difficult it is to regain ground after falling behind. Making a single dynamic random access memory semiconductor, for instance, requires more than 1,000 steps. China accelerated its innovation push under President Xi Jinping, crystallized with the 2015 release of its “Made in China 2025” report. While a blueprint for national advancement is laudable, the Foundation said, China’s protectionist and “filching” policies, forced technology transfers, import barriers and subsidized national champions and state-owned companies were less so.
However, the analysis focuses on the 2010-2020 period and does not reflect programs, funding and initiatives put in place by the administration of President Joe Biden, including the Chips and Science Act, the Inflation Reduction Act, and the Infrastructure Investment and Jobs Act. Another challenge involving China, analysts said, is that its politics often drive tech policy, and Beijing can be adept at hiding weaknesses and avoiding transparency. This makes it difficult to assess how far ahead or behind the U.S. is in various key areas relative to China. “The U.S. also needs to prioritize thinking through its own technology policies, both from an investment standpoint at home and making sure that we do stay ahead,” said Alexandra Seymour, Technology and National Security Analyst at the Center for a New American Security. “I don’t think we’ve suffered from complacency, but we have had an awakening that this is something we need to prioritize.”
Western leaders and technology experts have a long history of underestimating China. Measuring innovation is an inexact science, and China – like Japan and Taiwan before – has been accused of filing massive numbers of patents for bragging rights and to make it more difficult for foreign competitors to develop or implement their own inventions, utility models or designs. The Foundation examined 22 innovation-related indicators between 2010 and 2020, including venture capital, patents and the amount of value added in advanced industries. It concluded China was making significant gains by almost every indicator.
China’s strongest inroads came in the number and quality of science and engineering articles, the number of patents worldwide related to a particular innovation and the fees it received for its patents and other advances. By 2020, China tallied more international patent families than the U.S. and published more scientific articles in all fields surveyed, other than in geology, atmospheric and oceanic sciences. China accounted for 39.6% of the 1.7 million patents granted globally in 2021, the World Economic Forum (WEF) reported in December, followed by North America with 19.9% and Europe with 11.8%. But the picture is mixed. China’s research was less influential than American research in every field other than mathematics and statistics, the report said. It has also been weaker than the U.S. in translating innovation to high R&D industries and hi-tech exports, the South China Morning Post reports.
