China's Innovation Growth Strategy

Although the Chinese have caught up to the U.S. in low-value manufacturing, they still lag behind the United States in high-value manufacturing, technology and home-grown management expertise. This however is changing. China is walking the thin line of acting as a consumer of manufacturing and technical expertise, while leveraging this consumption to develop its next generation of innovators and entrepreneurs.


Last year when China authorized its first solar energy plant, it required at least 80% of the equipment to be made domestically. On the other hand, the Chinese government is highly willing to welcome companies like Applied Materials that are building large research and development facilities; so welcoming, that Applied Materials CTO Mark Pinto is now located there.

If China continues to successfully maintain its strategy of balancing consumption and development of technical and manufacturing expertise, it eventually will lead the United States in both low and high-value manufacturing, and one day will rival the United States as a global innovator. As the wave of Chinese innovation builds, it would not be surprising to see an IPO market revival start in Asia.