In Tech, China Marches Forward

   Why can’t China innovate? That was the question the authors of a 2014 Harvard Business Review article set out to answer. In a country often perceived as “a land of rule-bound rote learners, efforts to leap ahead in innovation were ultimately limited by the country’s rigid hierarchies and limits on intellectual freedom, the authors concluded.

   Skepticism about China’s innovative prowess is not new. For many, China remains the land of bootleg DVDs, knock-off iPhones, and second-rate appliances. Successful companies like Alibaba, Baidu and Tencent are often dismissed as “fast followers”—ruthlessly efficient at imitating Western counterparts but ultimately barren of their own creative spark.

   These stereotypes are now being shattered.

   Live in Beijing and Shanghai for a couple of weeks and it becomes apparent how Chinese companies have seized the lead in mobile technology. After starting as an imitator of messaging apps like WhatsApp, Tencent’s WeChat app has leaped ahead. It pushed the boundaries of social networks, enhancing the social media experience with its early introduction of features like video messaging. But more than a social media app, it is a completely digital platform. WeChat added e-payment functionality before companies like Facebook thought to do so and now allows users to do everything from hailing a taxi to paying the utility bill to accessing government services. In 2016, WeChat hit 768 million daily active users. Its robust growth has propelled its parent company Tencent to become the most valuable publicly-listed company in Asia.

   In artificial intelligence, while Google and Microsoft continue to captivate the public imagination with the incredible feats like Google software AlphaGo’s victory over Go grandmaster Lee Sedol, Chinese AI researchers are making their presence felt in a big way. At AI conferences, Chinese researchers have nearly caught up with their American colleagues in terms of the number of papers published. In its strategic plan for AI research, the Obama administration observed that China has overtaken the U.S. in publications regarding deep learning, a state-of-the-art approach that builds multi-layered modules of artificial neuron networks and that has achieved impressive results.

   In 2014, Chinese tech giant Baidu also pulled off a major coup, hiring Andrew Ng—one of the leaders of the burgeoning field – away from Google, where he led the Google Brain project. “I thought the best place to advance the AI mission is at Baidu,” Ng was reported to say when asked why he decided to take on the chief scientist role at Google’s Chinese counterpart.

   Ng led the rapid expansion of Baidu’s AI team, allowing Baidu to not only develop search capabilities that rival those of Google but to also move into new business areas like autonomous driving. While Ng recently decided to leave Baidu to pursue new projects, he leaves the 1,300-strong team and its pipeline of promising technologies in the hands of rising stars who are well-positioned to further Baidu’s remarkable rise.

   China’s rise as a leader in innovation is fueled by the convergence of three forces: government investment, the emergence of a cohort of tech-savvy millennials, and a fierce work ethic.

   The Chinese government made innovation a top priority in its Thirteenth Five-Year Plan. The plan, released in 2016, emphasized funding and support for technological innovation projects and called for the establishment of innovation parks in cities like Beijing and Shenzhen to attract leading researchers.

   State-backed venture capital firms in China have helped jump-start the startup scene, and the establishment of a $30 billion fund in the Southern tech hub Shenzhen generated a flurry of excitement. Increased funding for technological research has also spurred the expansion of research departments in Chinese universities.

   The influx of government spending into technological projects also coincides with the emergence of a generation of avid tech users and skilled programmers. The six hundred million internet users in China constitute the largest single market of tech users in the world, providing local companies with a powerful incentive to innovate.

   As computer science gains popularity, elite universities like Tsinghua are graduating formidable numbers of young coders and engineers who leap at the opportunity to work at some of the nation’s hottest firms. In fact, worried that their children will be left behind, parents are sending their kids for coding lessons, starting from pre-school.

   China’s doubters argue that the country’s high-pressure, exam-centric education system incentivizes rote-learning over creative thinking, limiting the innovative ability of Chinese software developers. This line of reasoning overlooks the fact that much of engineering involves rigorous problem solving, and on this front, the Chinese education system fares better than many Western ones, at least according to measures like the Program for International Student Assessment (PISA).

   Besides, even if the average Chinese student may be conditioned to be less creative than his American peers, top Chinese students have demonstrated that they can hold their own in solving novel, challenging problems that require “leaps of insight.” At the 2016 International Olympiad in Informatics – the Youth Olympics of Computer Science – Chinese students swept both first and second place, with the Chinese delegation ranking first in the world.

   While it is true that the Chinese tend to be less entrepreneurial and more risk-averse, what they lack in inspiration they make up with perspiration. The sheer number of start-ups and the intensity of competition in China mean that companies are forced to execute projects remarkably quickly. This culture of rapid adaptation to provide users with a flawless experience underpins the success of apps like WeChat and Alipay.

   China still has formidable challenges to overcome as it seeks to transform into the world leader in innovation. Part of the success of homegrown tech giants stems from the protectionist advantages they have been given over to foreign players, notably in the form of restrictions on foreign companies. Besides, even as Tencent has perfected its WeChat app to cater to the idiosyncrasies of Chinese customers, it has struggled to make headway in foreign markets where competitors have already established a strong network.

   Still, China’s appeal is clear. More and more U.S. firms are moving to start R&D centers in China to draw on talent from the country and support their growing Chinese operations. Last October, Apple CEO Tim Cook made a surprise visit to Shenzhen to announce the opening of its second R&D center in China, as Apple seeks to fend off the fierce challenge from Chinese companies like Huawei and ZTE. From Beijing to Shanghai to Shenzhen, city governments are vying to emulate the success of Silicon Valley and position themselves as the destination of choice for global companies and foreign talent.

   For long periods in its history, China was a cradle of innovation. It was the Chinese who invented gunpowder, the compass, and paper, shaping our understanding of and interaction with the world. Now, as China rediscovers its innovative spark, it is set to shake things up once again.

Lionel Chentian Jin is a senior at Yale College. Contact him at chentian.jin@yale.edu.

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