Unique factors underpin China’s rapid rate of technological development

Innovation is one of main drivers that has helped China achieve rapid growth in the post-pandemic era. During the Covid-19 pandemic, the need to deploy advanced technology became increasingly urgent as many of the traditional methods of production and services failed to perform.

According to a report by the World Economic Forum released in 2020, the pandemic sped up major technological trends, such as online shopping, robot deliveries, cashless payments, remote working and learning, robotics and drones, 3D printing, as well as 5G and information and communication technologies.

With these developments, China now accounts for almost half of the world’s e-commerce transactions and holds almost 30% of the world’s renewable energy patents, according to the China-Britain Business Council.

With this exemplary rate of technological advancement, many observers have been betting that the country could surpass the United States in terms of innovation and become one of the world’s most influential nations.

Now, many might ask how it is possible for China to improve and adopt new technologies so fast. In this article, we will explore some of the main reasons. The first explanation lies in its unique population. China has a huge market base of 1.4 billion people. Of which, around 1 billion are internet users who are acquainted with technology. This creates a vast market where innovation can be tested and adopted.

Moreover, most Chinese people are hyper-adaptive. This is one of the unique characteristics of the nation’s population. According to the Harvard Business Review, China’s huge population has lived through many transformations and, in turn, has developed an astounding propensity for adopting and adapting to new technology at the speed and scale seen no where else in the world.

The article illustrates the point by describing an elderly homeless person in Beijing, who bought an inexpensive smartphone and downloaded a mobile payment application for pedestrians to be able to give him money in a cashless world. This is one of the examples of how most of China’s population are embracing changes rather than resisting them.

The second significant factor that helps the country speed up technological improvement is government support. According to the Harvard Business Review, the Chinese government has been implementing policies that help Chinese firms learn and imitate technology from foreign multinationals in several industries, including air transport, power generation, high-speed rail, information technology, as well as electric vehicles, since 2006.

Moreover, most of the venture capital and funds in the country are from government-related sources. These funds are poured into the target industries such as science and technology, causing them to grow exceptionally fast.

Data from Rhodium Group shows that finance from government-related sources accounted for as much as 60% of all science and technology funds in 2020. As a part of its 2024 plan, the Chinese government will boost its R&D spending by 10% and spend around $1.4 billion on upgrading industries and modernising manufacturing. Lastly, a highly competitive environment has helped China step up its innovation and technology economy. With a huge population comes fierce competition among Chinese firms and critical feedback from users. This forces companies to strive for improvement and fast transformation. Thus, most Chinese firms focus on learning from real-world experiment and prototyping minimum-feasible products in the market to outperform their competitors. Also, in a vast market, a successful product will gain strong momentum to scale and improve at a rapid speed.

All in all, the fast growth of innovation in China stems from its huge, hyper-adaptive population, government support, as well as a highly competitive environment. These factors provide a base where innovation economy can expand rapidly. Nonetheless, whether this ground-breaking speed of technological advancement will help China step up as the world’s leader in terms of technology in the future is yet to be seen.

Sources: https :// tribune. com. pk/ story /2460410/ china-adopts -quality-growth-model https://carnegieendowment.org/chinafinancialmarkets/91161 https://www.cbbc.org/services/our-sector-expertise/tech-innovation https://datareportal.com/reports/digital-2024-china https://hbr.org/2021/05/chinas-new-innovation-advantage https://rhg.com/research/spread-thin-chinas-science-and-technology-spending -in-an-economic-slowdown/ https://www.weforum.org/agenda/2023/06/why -china-innovation-ecosystem-is-unique-amnc-23/