• Research
  • Emissary
  • About
  • Experts
Carnegie Global logoCarnegie lettermark logo
DemocracyIran
  • Donate
{
  "authors": [
    "Matt Sheehan"
  ],
  "type": "commentary",
  "centerAffiliationAll": "dc",
  "centers": [
    "Carnegie Endowment for International Peace"
  ],
  "collections": [
    "Dynamic Technology Risks in Asia",
    "China and the World"
  ],
  "englishNewsletterAll": "asia",
  "nonEnglishNewsletterAll": "",
  "primaryCenter": "Carnegie Endowment for International Peace",
  "programAffiliation": "AP",
  "programs": [
    "Asia"
  ],
  "projects": [],
  "regions": [
    "United States",
    "China"
  ],
  "topics": [
    "Technology"
  ]
}

Source: Getty

Commentary

How China Became an Innovation Powerhouse

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

Link Copied
By Matt Sheehan
Published on Jan 10, 2023
Program mobile hero image

Program

Asia

The Asia Program in Washington studies disruptive security, governance, and technological risks that threaten peace, growth, and opportunity in the Asia-Pacific region, including a focus on China, Japan, and the Korean peninsula.

Learn More

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:

  • What China’s Algorithm Registry Reveals About AI Governance
  • How Food Delivery Workers Shaped Chinese Algorithm Regulations
  • Biden’s Unprecedented Semiconductor Bet

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

  • Commentary
    Trump’s AI Order Won’t Stymie U.S. Competition with China

      Matt Sheehan

  • Article
    China Is Worried About AI Companions. Here’s What It’s Doing About Them.

      Scott Singer, Matt Sheehan

Matt Sheehan
Senior Fellow, Asia Program
Matt Sheehan
TechnologyUnited StatesChina

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.

More Work from Carnegie Endowment for International Peace

  • Person pointing and shouting while holding a protest sign against the Ebola facility
    Commentary
    Emissary
    The Bigger Problem with the U.S.-Kenya Ebola Deal

    Washington’s transactional foreign policy is making it indistinguishable from Beijing’s, with consequential implications for African agency.

      Jane Munga

  • Commentary
    Diwan
    Board Up Donald Trump’s Failed Board of Peace

    What is behind Marco Rubio’s announcement that the body is now an international nongovernmental organization?

      • Zaha Hassan

      Zaha Hassan

  • US President Donald Trump delivers remarks to the United Nations General Assembly at the UN headquarters in New York City on September 23, 2025.
    Paper
    Retreat, Rebel, Replace, or Reform? Making Sense of Multilateralism Under Trump 2.0

    The conventional narrative of the second Trump administration simply repudiating multilateralism is incomplete. The record to date is far more mixed and varies across issue areas and institutions.

      Gustavo Romero, Stewart Patrick

  • Europe trade economy container supply chains
    Paper
    From Trade Dependence to Geopolitical Leverage: The EU in an Era of Weaponized Interdependence

    As geopolitical rivalry weaponizes global supply chains, the EU’s true vulnerability lies in emerging-risk imports. For these goods, suppliers are growing more concentrated, substitution more difficult, and political risk is looming.

      Sinan Ülgen

  • Photo of flames behind palm trees in a residential neighborhood in Altadena, California.
    Article
    Reimagining Disaster Response in the Age of Chaotic Austerity

    It’s the early days of a new architecture for disaster recovery. Now is the time to build a better, more adaptive funding ecosystem.

      • Sarah Labowitz
      • Photo of Katie Mears.

      Sarah Labowitz, Katie Mears

Get more news and analysis from
Carnegie Endowment for International Peace
Carnegie global logo, stacked
1779 Massachusetts Avenue NWWashington, DC, 20036-2103Phone: 202 483 7600
  • Research
  • Emissary
  • About
  • Experts
  • Donate
  • Programs
  • Events
  • Blogs
  • Podcasts
  • Contact
  • Annual Reports
  • Careers
  • Privacy
  • For Media
  • Government Resources
Get more news and analysis from
Carnegie Endowment for International Peace
© 2026 Carnegie Endowment for International Peace. All rights reserved.