Pillar 2: Technology and Innovation

The ability to create and commercialize technology products must be a core focus for China’s growth in the next 25 years. The good news is that China is well on its way to this goal.

A recent KMPG report on the fastest growing technology hubs (chasing Silicon Valley) in the world listed Shanghai as No. 2, followed by New York. Again, this is something that would have been unlikely a short time ago. This in itself is proof that the miracle isn’t over, it’s just changing shape. Here again we are seeing the pattern of moving beyond following trends and technologies to real innovation and originality.

This is especially apparent in e-commerce. In many ways China is two to three years ahead of the West and other markets when it comes to e-commerce services, experience and technology.

Alibaba, for instance, is setting the global standard for online marketplace experiences through Tmall and Taobao and is already deploying advanced cloud computing, augmented reality, virtual reality and O2O (online to offline) technology that is redefining retail. JD.com has set a gold standard for supply chain and retail direct to online consumer models. China is also far more advanced in mobile payments than the West. China is investing heavily in tech research and development, and will soon be a major player in manufacturing advanced, hi-tech, high valueadded products for sale around the globe. low-end export and infrastructure investment to advanced, tech-driven, high valueadded production.

A good analogy is: China is the world leader in making chopsticks and socks. They would buy the machines needed to make these products from Germany and Japan. Now, China wants to make the machines and sell them on to new low-cost production countries. We are also seeing China, through companies like Huawei, exporting advanced technologies to markets around the world.