Why Is China Incapable of Innovating Like the West?

Since 2015, the Chinese government has been promoting the slogan 'Made in China 2025,' which refers to Beijing’s goal of transforming China from a producer of cheap goods to a competitive powerhouse of cutting-edge high-tech industry. (Image:  pixabay /  CC0 1.0)
Since 2015, the Chinese government has been promoting the slogan 'Made in China 2025,' which refers to Beijing’s goal of transforming China from a producer of cheap goods to a competitive powerhouse of cutting-edge high-tech industry. (Image: pixabay / CC0 1.0)

The Chinese government has launched the “Made in China 2025” project with the aim of making the country the global hub of cutting-edge technology and gain market dominance in fields ranging from aerospace, biotechnology, alternative energy, and so on. This seemed to have irked the U.S., which sees the policy of the Chinese government in a negative light.

In fact, U.S. Trade Representative Robert Lighthizer is quoted by Bloomberg as saying: “These are things that if China dominates the world, it’s bad for America.” Though the quote might make one think that China is going to be blazing ahead with innovative products in the coming decade, the truth is that it is unlikely to happen. And one of the main reasons for this is its authoritarian government.

The problem posed by the Chinese authoritarian government

In China, much of the innovation that happens occurs through the backing of the government. The people and institutions carrying out new research have to ensure that their venture returns a profit through some kind of discovery or invention that ultimately benefits the government. And this is contradictory to how a free market functions.

According to the Commission on the Theft of American Intellectual Property, the theft of IP costs the U.S. up to $540 billion annually, and China is the one most responsible for it. (Image: pixabay / CC0 1.0)

In China, much of the innovation that happens occurs through the backing of the government. (Image: pixabay / CC0 1.0)

In a free market, the people engaged in research and funding earn monetary and other benefits from the innovative solutions they create. But the Chinese communist mentality insists it is personal greed that encourages individuals to invest time and money to try something new. And since individuality is curbed in Chinese society, people usually do not see any benefit in trying to be innovative.

Another structural problem with the Chinese government is that it is very strict when selecting projects to fund and which to avoid. As such, opportunities that are deemed to be high risk and little to no chance of success are neglected. This again is contradictory to how Western free markets operate.

In a free society, investors tend to bet money on research with even low chances of success in hopes that they end up making lots of profit if it does become successful. But such a system also generates a huge number of failures. In fact, for every Apple and Microsoft, there are literally hundreds of companies that have gone bust.

Everything you do on your phone, while watching TV, while browsing the internet or working in the network at your job, crates a trail of data. (Photo Credit: geralt via Pixabay cc 1.0)

In a free society, investors tend to bet money on research with even low chances of success in hopes that they end up making lots of profit if it does become successful. (Photo Credit: geralt via Pixabay cc 1.0)

As such, innovation in itself comes with the possibility of complete destruction of those who try to embrace it and fail. And the fear of failure will keep the Chinese government from taking too many chances on high-risk research. As a consequence, the Western system of society continues to flourish, while the Chinese authoritarian model ends up creating a society that can only imitate the West, unable to match its innovation.

The psychological impact of a lack of personal freedom

In a research study, it was found that creativity among school children in the U.S. has been dropping over the past three decades. The reason — the decline in children’s freedom. The study highlights a very important link — of that between creativity and freedom. The less personal freedom people have, the less creative they end up becoming. And when China is taken into context, one can see why the country continues to lag behind the West.

The personal freedoms of the Chinese are being crushed and controlled by the government. As a consequence, the people are trained right from birth to keep their thoughts in check. This is clearly what is hampering China from leaping ahead in innovation. And once the Chinese find their voice and move into a system that guarantees personal freedom, one can expect the country to become a center of innovation and excellence, just as it had been for thousands of years.

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