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Foreign Policy: It's Official: China Is Becoming a New Innovation Powerhouse

Author: David Wertime
February 7, 2014

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"First, the United States is, and remains, the technology center of the world, with an unmatched amount of researchers and R&D money and the kind of cultural hard-wiring that continues to produce breathtaking discoveries. Second, China is catching up."

In his recent State of the Union address, U.S. President Barack Obama argued that "the nation that goes all-in on innovation today will own the global economy tomorrow" and that China isn't exactly "standing on the sidelines." A new U.S. federal report shows just how hard Beijing is working to get into the game.

Now that three-plus decades of China's so-called one-child policy has helped create what the International Money Fund calls a "sharp decline" in the pool of extra (read: cheap) labor, Beijing is urgently looking for ways of designing its own products rather than manufacturing someone else's. Put another way, it wants to shift from making iPhones to inventing them. A recent report by a respected U.S. federal agency -- which shows Chinese high-tech output nearing that of the United States, China committing an increasingly large portion of its wealth to R&D, and a huge jump in the number of Chinese graduates with engineering degrees -- suggests it may soon have that chance.

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