Abstract
For years, China’s economy was known mainly for low-cost contract manufacturing and imitation of foreign goods. This chapter explores the strides that have been made in building innovation capacity. The chapter draws on sources ranging from research by others to the author’s original work to paint an all-around picture of how the world’s largest nation is moving up the value chain. Key factors include major investments in research, education, and infrastructure, along with policy reforms that have opened up the economy to free-market forces. Chinese firms benefit from a very large, fast-growing domestic market, which creates demand for innovative goods while allowing for experimentation. Perceived impediments to innovation in China include a Confucian-based social culture and education systems focused on rote learning and test-taking, but various observers point out that such factors may not inhibit innovation as much as is commonly believed.
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- 1.
See for example Swanson (2015).
- 2.
Needham (1954).
- 3.
Brook and Blue (1999).
- 4.
Zhang and Zhou (2015).
- 5.
Schumpeter (1934), pp. 65–69 and ff.
- 6.
In the 2017 tabulation, China (excluding Hong Kong) ranked 22nd in overall GII score and Hong Kong, measured separately, ranked 16th. See Global Innovation Index (2017).
- 7.
Trading Economics (2017).
- 8.
World Bank (2017).
- 9.
Chow (2011).
- 10.
Randau and Medinskaya (2015), p. 3.
- 11.
The Economist (2017a).
- 12.
See for example OECD (2004).
- 13.
Yip and McKern (2016).
- 14.
Wang and Miao (2016).
- 15.
Hellström (2016).
- 16.
Ibid.
- 17.
Zhang and Zhou (2015).
- 18.
Yip and McKern (2016), p. 1.
- 19.
State Council, People’s Republic of China (2016a).
- 20.
Zhang and Zhou (2015), p. 22.
- 21.
Author’s interview with professor Charles Chang, Deputy Dean and Professor at Fudan University’s Fanhai International School of Finance (Chang 2017).
- 22.
Yip and McKern (2016).
- 23.
Ibid.
- 24.
Yip and McKern (2016).
- 25.
Ibid.
- 26.
Ibid.
- 27.
Author’s interview with Charles Chang, Deputy Dean and Professor at Fudan University's Fanhai International School of Finance (2017).
- 28.
The Economist (2017b).
- 29.
China’s Belt and Road Initiative aims to create greatly enhanced modern versions of the Silk Road and maritime trade networks of olden times. The Initiative calls for infrastructure projects including ports, railroads, highways, and electric power systems reaching far beyond China itself: About 68 countries are involved, with China to provide financing, expertise and materials as needed. As of 2015, over US$160 billion of projects were planned or in construction, with total investment estimated to grow to US$ 4–8 trillion. See for example State Council, People’s Republic of China (2016b).
- 30.
Author’s interview with Charles Chang (2017).
- 31.
Campbell (2013).
- 32.
Zhang and Zhou (2015).
- 33.
Zhang and Sonobe (2011).
- 34.
Campbell (2013).
- 35.
Zhang and Zhou (2015).
- 36.
Campbell (2013).
- 37.
Bai and Li (2011).
- 38.
Wu (2016).
- 39.
Ibid.
- 40.
Zhang and Zhou (2015), p. 25.
- 41.
Kelion (2016).
- 42.
Jamrisko and Wei (2017).
- 43.
Strategy& (2017)
- 44.
Global Innovation Index (2017).
- 45.
Soo (2017).
- 46.
Ibid.
- 47.
Chen and Chan (2016).
- 48.
Ng (2001).
- 49.
Zhang and Zhou (2015).
- 50.
Ibid, p. 77.
- 51.
Ibid, p. 78.
- 52.
Hofstede and Bond (1988).
- 53.
Zhang and Zhou (2015), p. 98.
- 54.
Ibid, p. 99.
- 55.
Ibid, p. 97.
- 56.
Ibid, p. 97.
- 57.
Yip and McKern (2016).
- 58.
Schuman (2017).
- 59.
Interview with Bruce McKern, 15 July 2017.
- 60.
Merali (2012).
- 61.
Interview with Bruce McKern (2017).
- 62.
Ibid.
- 63.
Interview with Bruce McKern (2017).
- 64.
Tsui et al (2004).
- 65.
The Conversation (2017).
- 66.
Ibid.
- 67.
Reuters (2015).
- 68.
Ong (2015).
- 69.
Fan et al (2017).
- 70.
Stapleton (2017).
- 71.
Allison (2017).
- 72.
Stapleton (2017).
- 73.
Zhao (2014a).
- 74.
Vining (2017).
- 75.
Zhao (2014b).
- 76.
OECD (2014).
- 77.
OECD (2016a).
- 78.
Jackson (2015).
- 79.
Tian (2016).
- 80.
Ibid.
- 81.
Li et al (2003).
- 82.
Ibid.
- 83.
State Council, People’s Republic of China (2017).
- 84.
Export.gov (2017).
- 85.
State Council, People’s Republic of China (2017).
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Steiber, A. (2018). China: An Innovation Country?. In: Management in the Digital Age. SpringerBriefs in Business. Springer, Cham. https://doi.org/10.1007/978-3-319-67489-6_5
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