from CHINA'S ECONOMY WHAT EVERYONE NEEDS TO KNOW — Chapter 3: Industry and the Rise of the Export Economy
Can Chinese Industry Become More Innovative?
First, Chinese firms are broadly quite good at “adaptive” innovations—taking existing products, services, or processes and modifying them, often in substantial ways, to make them more responsive to the needs of the Chinese market. But Chinese companies have shown little ability to develop new products, services, or processes that are adopted or emulated in other countries.
Second, we can observe a confusion in Chinese innovation policy between the concepts of “innovation” and “autonomy.” The Chinese term, zizhu chuangxin, could also be fairly translated as “autonomous innovation.” The aims of this and other Chinese innovation policies often seem less about creativity per se, and more about reducing reliance on imported products, services, and ideas.
Industries and countries that are widely recognized as innovation leaders have no fear of importing ideas, people, and products from abroad, and in fact modern innovation processes increasingly depend on such cross-boundary movements. Hollywood, one of America’s most creative industries, relies heavily on imported talent (it seems sometimes that more British than American actors work there) and on contract arrangements with animation studios in South Korea and, increasingly, China. And thanks to global production chains, the most iconic product of American innovation in the twentyfirst century, the iPhone, shows up in the US trade accounts as a multibillion-dollar import item from China!
Finally, one must entertain severe doubts about the innovative potential of a society that has moved so aggressively in recent years to restrict the free exchange of ideas, which under any definition is surely an indispensable requirement for sustained innovative achievement.
The Communist Party has always been relatively repressive of public information flows, but under Xi it has become much more so, by shutting down independent voices in social media, increasing censorship and blockage of both foreign and domestic websites, and harassing or closing civil society organizations that receive foreign funding or are suspected of propagating ideas from abroad. It has also launched a campaign to cleanse university textbooks of foreign ideas and to encourage university professors to promote "Chinese" ideas in their teaching.
This oppressive and expanding hostility to ideas from other societies, and to domestically generated ideas not approved by Communist Party apparatchiks, is obviously inimical to innovation. For the time being, it is better to read Chinese "innovation" policies as efforts to increase the proportion of technology-intensive goods produced by Chinese-owned firms, regardless of their innovative content. And that is quite a different thing.
