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"By saying this stuff, Biden is not preparing American firms, or really preparing America, for the threat of Chinese innovation," Rein said. And the country has been perfecting its ability to execute complex production and manufacturing plans for decades. "Chinese companies are now focused on innovation because they recognize there is so much profit to be made," Rein said.Īmerican firms should be on notice. The government is, in some sectors, still much too controlling.īut Rein sees the current innovation drive as a sea change. And the country must work to overcome related problems, including a lack of intellectual property protections. Of course, in absolute terms, China is not going to replace the United States as the world's top innovator anytime soon. The McKinsey researchers said they found innovation "every day in areas such as renewable energy, consumer electronics, instant messaging, and mobile gaming, both at domestic players and at multinationals with significant research and product-development presences." When McKinsey analysts examined China's economic trajectory in 2011, the country's innovation credentials "seemed like yesterday's question." "Biden is playing to an outdated idea of China," said Shaun Rein, author of the forthcoming book "The End of Copycat China." "He is underestimating the rise of innovation in China." Related: Meet 4 kings of Alibaba's online retail empire The business model that led Alibaba to retail domination. The computer chips made by Fuzhou Rockchip Electronics. It's an industry leader with nearly limitless ambition. It's a leading proponent of 5G technology, and it is starting to make cell phones, too.īiotech firm B.G.I.: This company sequences more DNA than any other institution on earth - more than Harvard, more than the National Institutes of Health. Huawei employs more than 70,000 R&D employees. Network maker Huawei: The networks built to carry all that smartphone data? Huawei, a telecom equipment supplier, is second globally only to Ericsson ( ERIC). Its messaging app, WeChat, has more features than many of its Western competitors and is sweeping markets from Asia to Africa. Tencent has a bigger market cap than Cisco ( CSCO) or Hewlett-Packard ( HPQ), more users than Twitter ( TWTR) and more sales than Facebook ( FB). Tech company Tencent: This firm owns a web of mobile, telecom and online retail businesses that rank among the largest in the world. Its founder is frequently compared to Steve Jobs. It pumps out an updated operating system once a week. Smartphone maker Xiaomi: Founded just four years ago in Beijing, this company is now valued at more than $10 billion and sells just as many phones in China as Apple ( AAPL).
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