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Opinion | The secret to China’s economic success? A willingness to learn
- While foreign firms might arrive in China with a slight technological advantage, it is usually short-lived, given how fast Chinese companies learn
- This base-level dynamism has been strengthened by the government’s investment in the internet, communication, transport and logistics over past 20 years
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Over the past 20 years, a number of thriving technology companies have emerged in China. This has invited much speculation about the country’s scientific and technological prowess, and about its ability to innovate.
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Some argue that China is already nipping at America’s heels in these domains, and has become a world leader in some sectors. Others believe that China is not quite as far along as it may appear, and the government’s regulatory clampdown on tech companies will impede its continued progress. Which is it?
Those who doubt China’s progress emphasise the country’s reliance on Western technology, pointing out that its home-grown tech companies still do not compete with their American counterparts globally. But optimists note that those companies continue their rapid international expansion, a reflection of China’s exceptional capacity for learning.
The latter camp has a point. China’s capacity for learning is the secret to the country’s economic success, and says much more about China’s prospects than where the country stands technologically. After all, technological innovation is less an input than an output of entrepreneur-led economic development. It is by building thriving businesses that entrepreneurs gain opportunities to develop new technologies and applications.
True, China has faced growing external challenges in recent years, including clampdowns on technology sharing by developed economies. Furthermore, the Chinese government’s efforts to maintain internal economic order and mitigate financial risks, such as through increased regulation of tech companies, have been controversial in the market. And some foreign manufacturing firms have reportedly withdrawn from China.
But the economy has not ground to a halt. On the contrary, the entrepreneurial impulse driving China’s development remains strong. It helps that the country has a huge internal market of 1.4 billion people connected by well-developed transport systems, advanced communication networks, and flexible and efficient supply chains.
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