The recently opened high-speed rail route between Beijing and Shanghai, said to be the longest and the fastest in the world, has drawn attention to innovation in China. The popular myth is that Chinese companies largely remain in the bottom pit of the global supply chain that affords them scant resources for groundbreaking research and development. The often-cited example is the US$6 value of an Apple's US$300 iPhone that can be attributed to Chinese parts manufacturers.
Yet China appeared recently to have soared to the upper echelons of technological innovation with a slew of eye-catching achievements. Besides the world's fastest train, China has produced the fastest super-computer. Most of the world's alternative-energy technology and manufacturing capabilities, including wind and solar power, and lithium batteries, are the products of Chinese companies. China's J-20 stealth fighter, the only military combat jet of similar calibre to America's F-22 fighter, took to the air recently.
Is China shedding its image as a third-world nation in terms of innovation? The experiences of three industry sectors - cars, telecoms and high-speed rail - may offer some answers.
A recent book about Chinese innovation by Yinglan Tan identified a Chinese model called 'recombinative innovation'. As explained by Haier chief executive Zhang Ruimin , this means 'the combining of ideas and technologies in novel ways rather than developing products from scratch'.
My study of the telecoms industry confirms this. Huawei, for example, leverages on existing technology, even from its rivals. Huawei founder Ren Zhengfei once said that a technological development that contained more than 30 per cent of new elements was not innovation but 'waste'. His R&D strategy stresses an evolutionary, rather than revolutionary, approach.
