How China Became an Innovation Powerhouse

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Commentary

How China Became an Innovation Powerhouse

And what the United States must to do retain its competitiveness.

By Matt Sheehan

Published on Jan 10, 2023

Conventional wisdom often suggests that technological breakthroughs proliferate in an environment of free markets, free speech, and democracy. In short, if you want to innovate, you need to operate like the United States. But over the past twenty years, China has transformed from a technological backwater into an innovation powerhouse.

Today, China directly competes with the United States on key emerging technologies, such as artificial intelligence and quantum computing. And it has managed to accomplish this feat even as its government has tightened controls on markets, speech, and politics.

In this video, I argue that three main factors have turbocharged China’s rise as a technological powerhouse: a large, semi-protected market; ties with researchers and companies around the world; and waves of financial, human, and physical capital invested in promising fields like AI. To keep the United States competitive, Washington should explore certain elements of China’s strategy, including a willingness to experiment with pro-innovation policies and an ability to accept a certain amount of “waste” when catalyzing technological upgrading.

More on China and technology:

See more Carnegie explainer videos.

About the Author

Matt Sheehan

Senior Fellow, Asia Program

Matt Sheehan is a senior fellow at the Carnegie Endowment for International Peace, where his research focuses on global technology issues, with a specialization in China’s artificial intelligence ecosystem.

Recent Work

Article
China Is Worried About AI Companions. Here’s What It’s Doing About Them.
- Scott Singer, Matt Sheehan
Commentary
Have Top Chinese AI Researchers Stayed in the United States?
- Matt Sheehan, Sophie Zhuang

Technology United States China

Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.

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