Published: 23:44, February 21, 2024 | Updated: 09:42, February 22, 2024
China’s innovation focus key to its economic resurgence
By Wilson Lee Flores

What are the reasons for optimism about China’s epochal transformation and continuing economic resurgence amid domestic challenges and global uncertainties? The narrative for China’s recovery is one of resilience, reforms, innovation and an unyielding spirit poised to shape the trajectory of the world’s second-largest economy in 2024 and beyond.

Renowned economist Jeffrey Sachs, a Harvard graduate and Columbia University professor, predicts “robust economic growth” for China based on the continuous development of 5G, green energy and core infrastructure.

University of Cambridge-educated William Bratton, head of Asia-Pacific cash equity research at BNP Paribas, told observers on Nov 17 not to omit “the country’s zeal for innovation, and the link between this and sustainable, productivity-led, long-term economic growth. … China is a country which over the last decade has embraced innovation with unprecedented passion. A country which, despite various efforts to slow its progress, has transformed itself from a laggard in innovation and technology to a nation with sophisticated, complex and frequently world-leading innovation capability.”

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Bratton added: “China’s technological prowess has consistently surprised to the upside, whether in terms of electric vehicles, new energy, artificial intelligence, space exploration, or most recently, semiconductors. … China’s innovation focus is a critical component of its strategy to sustain its economic trajectory and escape the ‘middle-income trap’, the notion that countries unable to develop higher-value activities inevitably become stuck at a lower income level than more productive peers.”

The following are some of the factors sustaining China’s economic resurgence:

Technocratic and science-guided leadership: China’s political leadership, led by President Xi Jinping, a chemical engineering graduate of Tsinghua University, and other technocrats, epitomizes a fusion of scientific acumen and wise political stewardship. Their tenacity, strong political will and science-guided pragmatic approach form a solid foundation for sustained dynamism. This is also the reason China’s foreign policy prefers peace and trade over conflicts and chaos.

Work ethic, creativity, perseverance and entrepreneurial spirit: At the core of China’s economic resilience are the people’s hard work, creativity, Confucian discipline, and love of learning, perseverance, and an innate entrepreneurial spirit.

Geopolitical strategic advantage: China’s strategic location at the crossroads of East Asia, oil-rich Central Asia, and resource-abundant Association of Southeast Asian Nations (ASEAN) allows it to foster regional and global collaborations. Its Belt and Road Initiative further positions China as a hub for trade, connectivity, and cultural exchange.

Technological prowess and sovereignty: Despite external restrictions, China’s 2023 technological breakthroughs like Huawei’s Mate 60 Pro smartphone with a 7-nanometer chip, the successful manufacturing of the C919 aircraft, large-scale cruise ships and its modern satellite technology underscore this nation’s innovation capabilities. The rapid development of indigenous operating systems like HarmonyOS and Euler demonstrates China’s move toward technological sovereignty, breaking away from dependency on foreign technologies and boosting both resilience and self-reliance.

In conclusion, optimism about China’s economic resilience and growth potential in 2024 and beyond emanates not just from technological innovations and industrial prowess but from the very spirit that defines the nation — innovation, determination, opening-up, reforms, and an unwavering commitment to charting new horizons on the global economic stage

Manufacturing prowess: China has high-quality and large-scale manufacturing prowess, as showcased by 2023 achievements like becoming the top global automobile exporter to advancements in storage chip technology.

Energy reforms and environmental stewardship: China’s leadership in photovoltaic energy, nuclear power, and wind power technologies aligns with global shifts toward sustainable energy solutions. Its commitment to green technologies is economically strategic and environmentally responsible.

Huge growth potential in per capita income: Though China has made many socioeconomic gains in recent decades, its per capita income is still far from advanced economies and with so much room for substantial, long-term growth.

China’s continuous reforms and creative destruction: Those who assert that China is repeating Japan’s experience of “lost decades” overlook a crucial distinction. The Chinese cultural heritage is steeped in a perpetual dialectic characterized by ongoing debates, sustained reforms, and historical revolutions spanning centuries. This tradition has ingrained a spirit of continuous adaptation and innovation within the Chinese entrepreneurial ethos, promoting a climate of healthy creative destruction and dynamic competition. In contrast, Japan exhibits a traditionalist ethos evident in its possession of the world’s oldest continuous hereditary monarchy and a collection of some of the world’s most ancient family businesses.

The world’s biggest free trade zone linked by modern transport: A European logistics industry executive told me years ago that doing business in China is “a dream” because it is like “the world’s biggest free trade zone” with each province as huge as a European country, but no customs barriers between provincial borders. He also cited China’s vast network of modern transport like highways and trains, which facilitates economic dynamism.

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Revolutionary Sun Yat-sen’s dream of modern railways a century ago is now a reality: China had the world’s largest train network as of November, with a total operation mileage of railway network exceeding 155,500 kilometers, including 43,700 kilometers of high-speed railways.

The spirit of unyielding determination: Containment efforts by some foreign politicians are helping to forge unyielding determination within the Chinese people. These challenges instill vigilance, self-reliance and determination, fortifying China against complacency.

In conclusion, optimism about China’s economic resilience and growth potential in 2024 and beyond emanates not just from technological innovations and industrial prowess but from the very spirit that defines the nation — innovation, determination, opening-up, reforms, and an unwavering commitment to charting new horizons on the global economic stage.

The author is an award-winning writer, a columnist of the Philippine Star newspaper, an economic and politics analyst, and a real estate entrepreneur.

The views do not necessarily reflect those of China Daily.