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FEATURE STORY: On its Way of becoming The World’s Largest Innovation Economy!
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On its Way of becoming
The World’s Largest Innovation Economy!

By Anastasia Chapman

BT 201904 FEATURE 01中国打造全球最大创新经济




How China Is On Its Way Of Becoming the Largest Innovation Economy Cover PicChina is setting an exemplary benchmark for the world to follow for being the new science and technology powerhouse. The country is on its way to becoming the world’s largest innovation economy. According to the latest Global Innovation Index, China has been singled out as an innovation dynamo for showing huge progress in science and technology, economic and societal development that is increasingly becoming multipolar and global.

Key drivers behind this pioneering trend include spending on research and development on a high level along with the entry of a high number of patent applications made by Chinese institutions and establishments, the rate of which has exceeded that of the U.S. and the EU. China is increasingly becoming prominent in industries with intensive use of technological and scientific knowledge.

It is no longer the nation of replicas. A huge market with massive investments and the addition of worldwide talent has boosted the innovative ecosystem of China. Today, the nation is home to some of the biggest companies in the world. Yet, such stories are largely ignored in the U.S. and in much of Europe. How did China manage to attain so much innovation within the last decade? Let’s take a closer look at some of the few projects and endeavours that reveal the secret recipe for Chinese innovation.

China Riding High On Innovation

According to a recent report compiled by the INSEAD business school, Cornell University and the World Intellectual Property Organisation (WIPO), China's innovation trajectory has been dynamic over the past few decades. It is one of the few middle-income countries that has been featured so high up in the index. The report demonstrates the concentration of Chinese researchers submitting the highest number of patent applications.

The report also states that the number of scientific and technical publications issued in China is well ahead of the US. To support the growing innovations in the country, China spends around 2.1% of its GDP on research and development. In a link to its economic status, China is slowly transforming into a country punching well above its weight.

How China Is On Its Way Of Becoming the Largest Innovation Economy Pic 2Rich Returns from Innovations

Of all the funds invested in innovative projects, China is now reaping results of what it sowed in the past few decades. From imitation to innovation, China has come a long way innovating unlike ever before! That calls for all foreign companies to ramp up their research and development strategies to keep pace with newly innovative Chinese enterprises. Like in 2016, the National Supercomputing Centre in Wuxi unveiled the Sunway TaihuLight, the world’s fastest supercomputer, with 10.65 million CPU cores. Another domestic company, Ehang Inc., based in Guangzhou, launched the world’s first aerial passenger drone, the Ehang 184, capable of autonomously transporting a person in the air for 23 minutes. Projects like these show the prowess of Chinese inventiveness in a range of industries.

Moreover, years of foreign investments have given China the leverage to transform itself into a manufacturing powerhouse rich in technological learning opportunities for local companies. From manufacturers to innovators, leaders of these Chinese enterprises have pioneered innovations visible in telecommunications, internet business models, artificial intelligence, software, financial technology, consumer products, new materials, green technology and high-end equipment. Leading Chinese organisations like BGI, Alibaba, Huawei, Tencent, Baidu, DJI and ZTE have become household names outside of China.

How China Is On Its Way Of Becoming the Largest Innovation Economy Pic 3The Boom in China’s Venture Fundraising

The venture capital might of present day, China, is undeniable! Not only the nation’s corporate giants are focusing on developing their own technology, but through a combination of profit-seeking and government proclamations, in a major effort it is right now building its own innovation economy. The evidence is increasingly clear at the astounding pace Beijing has been pouring money into venture capital.

How China Is On Its Way Of Becoming the Largest Innovation Economy Pic 4 2According to a number of data sources including China Money Network, Pitchbook and Crunchbase, China is driving ahead of Silicon Valley and the rest of the US on venture capital dollars invested in start-ups. Crunchbase’s analysis also shows a whopping four-fold growth in the number of venture capital rounds completed in the last quarter in China, compared to the same quarter last year. China’s venture capital fundraising nearly doubled between 2015 and 2017, and to a large extent driven by the fruition of China’s internet universe and mounting government efforts. Of the $154 billion worth of funds invested in 2017, 40% came from Asian (primarily Chinese) venture capital. Want to know about America’s share? Only 4% higher at 44%.

In an attempt to drive growth in key tech sectors and access intellectual property, China’s venture capital scene is witnessing a never-seen-before boom. Regardless of a looming trade war and restrictions imposed by the Chinese government on capital outflow, China-based venture funds and corporate investments continue to pump vast new sums into everything from global biotech start-ups, robotics to artificial intelligence equipped robotics.

Venturing on Energy Sector more than Ever

How China Is On Its Way Of Becoming the Largest Innovation Economy Pic 5China has been a pioneer in the energy sector. A recent report by the U.S. based Institute for Energy Economics and Financial Analysis states that China is, by far, one of the leading forces in global clean energy development. The report also details that, due to the rising importance of low-carbon projects in the country, Chinese firms and investors are increasingly looking abroad for opportunities.

In recent years, in a bid to counter growing air pollution, China has moved away from its dependency on coal, while enthusiastically embracing renewable energy. It is now a world leader in solar innovation, with 60,000 photovoltaic and other related inventions to its name! Plus, it is on its way to becoming the largest electric carmaker in the world with home-grown start-ups prepping up to compete with the likes of Tesla.

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