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The Western Illusion of Chinese Innovation

Many Western observers – in media, academia, and government – now portray China as a fierce competitor for global technological supremacy, with top-down industrial policies that are enabling it to stand virtually shoulder-to-shoulder with Europe and the US. This is a serious misrepresentation.

VANCOUVER – Over the past two decades, China has been achieving rapid technological progress, thanks in no small part to its massive investment in research and development, which totaled some 2.2% of its GDP last year. Yet China is nowhere near the technological frontier. In fact, the distance separating it from that frontier is far greater than most people recognize.

In the West, many economists and observers now portray China as a fierce competitor for global technological supremacy. They believe that the Chinese state’s capacity is enabling the country, through top-down industrial policies, to stand virtually shoulder-to-shoulder with Europe and the US.

Harvard economics professor and former US Treasury Secretary Larry Summers, for example, declared last March at a Beijing conference that it is a “historical wonder” that China, where per capita income amounts to just 22% that of the United States, could have the world’s cutting-edge technology and technological giants. The US Trade Representative, in a March report, presented the “Made in China 2025” plan – a 2015 blueprint for upgrading China’s manufacturing capacity – as proof that the country is seeking to displace the US in high-tech industries that it considers strategic, such as robotics.

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